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Occidental Petroleum profit climbs 29% in 4th quarter

The nation's fourth-largest oil company says net income rose to $1.2 billion from $938 million a year earlier as production increased and oil prices hit two-year highs.

January 27, 2011|By Ronald D. White, Los Angeles Times

Occidental Petroleum Corp., the nation's fourth-largest oil company, said Wednesday that its fourth-quarter profit increased 29% as production increased and oil prices rose to two-year highs.

The Westwood company's net income climbed to $1.2 billion, or $1.49 a share, from $938 million, or $1.15, in the same quarter a year earlier. Excluding special items, Occidental earned $1.3 billion, or $1.58, compared with $1.1 billion, or $1.35, in the fourth quarter of 2009.

Fourth-quarter revenue rose 16% to $5.06 billion.

For the year, net income was $4.5 billion, or $5.56 a share, compared with $2.9 billion, or $3.58, for 2009. Revenue was $19.05 billion, up 29%.

Although earnings exceeded analyst expectations, Occidental shares fell 21 cents to $96.94.

"I think it was a very good result," said Phil Weiss, an energy analyst with Argus Research in New York. "There was some overreaction in the market because some felt their production growth should have been higher, but with these oil contracts in the Middle East, Occidental gets to keep less of the oil as the price rises."

In a conference call with analysts, Occidental Chief Executive Ray R. Irani highlighted prospects for a recently announced deal with Abu Dhabi involving one of the largest natural gas fields in the Middle East.

"Occidental will hold a 40% participating interest in the 30-year contract with Abu Dhabi National Oil Co.," said Irani, who is retiring in May. "This is another important step in the implementation of our growth strategy in the Middle East."

Occidental said oil and gas production in the fourth quarter averaged about 753,000 barrels of oil equivalent compared with 717,000 barrels a year earlier. The increases came primarily in the Middle East and North Africa, the company said, with a smaller increase coming from U.S. production.

Oxy received an average of $79.96 a barrel for its oil in the fourth quarter, the company said, up from $71.74 a barrel a year earlier.

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