Westwood-based Occidental Petroleum's second-quarter profits… (Kevork Djansezian / Associated…)
Crude prices fell by more than 29% between late February and late June, and that was enough to ensure that the oil companies would see lower second-quarter profits compared with 2011. But in an economy that is still struggling to gain momentum, the industry is still posting numbers that many other businesses would love to have.
Occidental Petroleum, for example, posted a second-quarter net profit of $1.3 billion, or $1.64 a share, the company announced in a statement. That was a decline of 27.7% compared with the $1.8 billion, or $2.23 a share, the company earned a year earlier. Sales fell to less than $5.8 billion from just under $6.2 billion in the second quarter of 2011, a drop of 6.5%.
For the first six months of 2012, Occidental had a net-profit decline to $2.9 billion, or $3.55 a share, from $3.4 billion or $4.13 a share in 2011.
Occidental improved in other ways. The nation's fourth-largest oil company and its biggest producer of domestic crude managed a second consecutive quarter of record oil production, averaging 766,000 barrels a day compared with 715,000 in the same quarter in 2011. It was also Occidental's seventh straight quarter of record domestic oil production.
Analysts said that the plunge in oil prices, which have regained some ground in recent weeks, would mean that some oil companies would have to borrow money or sell assets to meet their 2012 marks for capital spending. But they added that Occidental was one of the few that wouldn't have to resort to such actions.
That seemed apparent from the numbers. Stephen I. Chazen, the Westwood-based company's president and chief executive, said Occidental generated a second-quarter cash flow of $6 billion and invested $5.1 billion in capital expenditures.
"Occidental is a very disciplined company," said Fadel Gheit, senior energy analyst for Oppenheimer and Co. "They do not spend what they don't have and they live within their means."
Occidental said its average oil price for worldwide crude production was $99.34 per barrel for the second quarter of 2012, compared with $103.12 per barrel for the second quarter of 2011.
On paper, Exxon Mobil, the nation's biggest oil company, looked like it had a profit gain of 49% to $15.9 billion in the second quarter, compared to 2011. But a large part of that--$7.5 billion--came from asset sales. Without those, Exxon Mobil would have seen a net decline in second quarter profits of 22%, to $8.4 billion or $1.80 a share.
On Wednesday, Conoco Phillips led off earnings week for the major U.S. oil companies by announcing a second-quarter profit decline of 33% to $2.30 billion, or $1.80 a share.
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