Fueled by its efforts to ramp up oil production in California and the Permian Basin, Occidental Petroleum grew its domestic crude output by 1.4 percent sequentially.
However, the integrated oil and gas company’s total hydrocarbon production came in at 745,000 barrels of oil equivalent per day, down 0.6 percent from the fourth quarter and 2.3 percent year over year.
This decline reflected a calculated decision to scale back gas-focused drilling in California and field and port disruptions in Yemen and Libya.
Results should improve over the next 12 months. The New Johnsonville chlor-alkali plant comes online in March, the BridgeTex Pipeline serving the Permian Basin starts operations in the third quarter, and the Al Hosn gas project in the United Arab Emirates ramps up toward year-end.
Management also provided an update on the company’s ongoing restructuring efforts:
What will Occidental Petroleum do with the proceeds from all this wheeling and dealing? CEO Steve Chiazen indicated that the firm will complete its current 26.5 million stock buyback program and repurchase another 40 million to 50 million shares.
Management also emphasized that the cash flow generate from its growth projects expected to come onstream this year should offset any lost in the spinoff of its California business.
More important, Occidental Petroleum’s extensive asset base in the Permian Basin provides ample opportunity to drive production growth in coming years.