|
New York: Occidental Petroleum, the fourth-largest US oil company by market value, said second-quarter profit rose 63 per cent as crude prices climbed above $140 a barrel for the first time and production increased.
Net income jumped to $2.3 billion, or $2.78 a share, from $1.41 billion, or $1.68, a year earlier, the Los Angeles-based company said today in a statement. Per-share profit was 10 cents above the average of 16 analyst estimates compiled by Bloomberg.
Profit from oil and gas sales more than doubled to $3.81 billion as a 5.4 per cent production increase helped Occidental capitalise on soaring commodity prices. The company increased its capital-spending budget by 21 per cent to expand drilling in the US, Argentina, Colombia and Libya.
"They certainly have the capacity to increase production from domestic assets," said Jim Byrne, an analyst at BMO Capital Markets in Calgary who rates Occidental shares "outperform" and doesn't own any. "It's a quite substantial capital-spending increase that seems prudent, given where oil prices have been."
Occidental rose $1.12, or 1.6 per cent, to $73.34 in New York Stock Exchange composite trading. The stock, which has eleven buy and seven hold ratings from analysts, jumped 23 per cent in the second quarter.
Occidental's second-quarter output rose to the equivalent of 588,000 barrels of oil a day, led by increases from the Dolphin project in Qatar and US wells. Revenue jumped 61 per cent to $7.12 billion.
The company lost about 13,000 barrels of daily production under production-sharing contracts that give host governments a bigger share of output when prices rise. Each $5 increase in the price of oil shaves 1,500 barrels from daily output, Occidental said.
The company estimated its wells will pump the equivalent of 610,000 barrels a day during this year's second half, lifting full-year production to about 604,000 barrels a day, down from a previous forecast of 620,000 to 630,000 barrels.
Oil and gas production will rise to the equivalent of 650,000 barrels of crude a day next year and 705,000 barrels in 2010, chief financial officer Stephen Chazen said.
|
