Summary
Occidental Petroleum Corporation (OXY) filed an 8-K on July 30, 2013, reporting its financial and operational results for the second quarter and first six months of 2013. The company reported net income of $1.3 billion ($1.64 per diluted share) for the second quarter of 2013, which was flat compared to the same period in 2012. However, core income, excluding non-core items, was slightly lower year-over-year at $1.58 per diluted share. The report highlights significant operational improvements in the Oil and Gas segment, with increased production volumes, particularly in domestic operations (Permian and California), and a substantial reduction in operating costs per barrel. The Chemical segment experienced lower core earnings due to weak economic conditions impacting export volumes and higher feedstock costs, despite a gain from the sale of an investment in Carbocloro. The Midstream, Marketing and Other segment also saw a decrease in earnings, primarily due to lower marketing and trading performance. For the first six months of 2013, net income and core income were down compared to the prior year, largely driven by lower commodity prices and higher DD&A rates in the Oil and Gas segment, although domestic gas prices saw an increase.
Key Highlights
- 1Occidental Petroleum reported net income of $1.3 billion ($1.64 per diluted share) for Q2 2013, matching the prior year's results.
- 2Core income for Q2 2013 was $1.58 per diluted share, slightly below the $1.64 reported in Q2 2012, reflecting the impact of non-core items.
- 3The Oil and Gas segment earnings increased to $2.1 billion in Q2 2013 from $2.0 billion in Q2 2012, driven by higher liquids volumes and significantly lower operating costs.
- 4Domestic operating costs per barrel in the Oil and Gas segment decreased from $17.73 in Q2 2012 to $14.28 in Q2 2013, a substantial improvement.
- 5Daily oil and gas production volumes slightly increased to 772,000 BOE in Q2 2013 from 766,000 BOE in Q2 2012, with domestic production growth in California and the Permian.
- 6Chemical segment core earnings decreased to $144 million in Q2 2013 from $194 million in Q2 2012, impacted by weaker export demand and higher costs.
- 7Capital expenditures decreased to $2.21 billion in Q2 2013 from $2.71 billion in Q2 2012, and Depreciation, Depletion, and Amortization (DD&A) expense increased.