In a statement Occidental Petroleum Corp, said, its second quarter loss has ballooned to $8.35 on lower energy prices and write-downs; it has been trying to reduce its debt load midst a the Wuhan coronavirus pandemic which has slashed the demand for crude oil and has hammered down oil prices.
Occidental had borrowed heavily to finance its $38 billion acquisition of Anadarko Petroleum. It has now written-down the value of its oil and gas properties by $6.6 billion, much like its peers such as Total, BP and Chevron. The oil industry expects energy prices to remain low for years to come.
Occidental’s oil and gas production fell by 13% during the second, compared to the same period last year, to 1.16 million barrels of oil and gas per day, said the company.
In the Permian region, where it became the largest operator through the Anadarko purchase, shale output is likely to drop by 37% in 2020, said the oil giant.
With the news reaching the market, Occidental’s shares fell by nearly 6% in late trading after having risen by $1.03 at $16.48. So far, its stock is down by 61% this year.
The company has slashed jobs, trimmed its dividends, and reduced spending plans. It has also sold of assets to shore up its finances. It expects to receive $2 billion or more in asset sales, said the company in a presentation.
Among the assets sale is a package of land and minerals in Wyoming and Colorado. Occidental hopes to close the deal during the fourth quarter.
During the quarter, it reported a net loss of $8.35 billion, equivalent to $9.12 per share, compared with earnings of $635 million, equivalent to 84 cents per share, a year earlier.
Excluding one-off items, it reported a loss of $1.76 per share, compared with analysts’ average estimates of $1.68, according to Refinitiv IBES.