Occidental posts third-quarter net loss of $3.8 billion

Nov. 9, 2020
Occidental posted a net loss attributable to common stockholders for third-quarter 2020 of $3.8 billion, and an adjusted loss attributable to common stockholders of $783 million.

Occidental Petroleum Corp. posted a net loss attributable to common stockholders for third-quarter 2020 of $3.8 billion, and an adjusted loss attributable to common stockholders of $783 million. Third quarter after-tax items affecting comparability included a write-down of $2.4 billion related to Occidental's equity investment in Western Midstream Partners LP (WES) and $700 million of losses associated with the divestitures of onshore Colombia and mineral and surface acreage in Wyoming, Colorado, and Utah (OGJ Online, Aug. 19, 2020; Oct. 1, 2020).

Capital expenditure for the quarter, excluding discontinued Ghana operations, was $200 million. 

Oil and Gas
Oil and gas pre-tax loss on continuing operations for third-quarter 2020 was $1.1 billion, compared to a pre-tax loss of $7.7 billion for second-quarter 2020 (OGJ Online, Aug. 10, 2020). The third quarter results included pre-tax losses of $795 million associated with the announced divestitures of onshore Colombia and mineral and surface acreage in Wyoming, Colorado, and Utah. Excluding items affecting comparability, third quarter oil and gas results improved over the second quarter due to higher commodity prices, partially offset by lower volumes.

Despite a disruptive domestic Gulf of Mexico storm season, total average daily global production of 1.237 MMboe/d for the quarter exceeded the midpoint of guidance by 12,000 boe/d. Permian resources exceeded the high end of guidance by 3% with production of 420,000 boe/d. International average daily production volumes of 277,000 boe/d came in at the high end of guidance.

OxyChem
Chemical pre-tax income of $178 million for the quarter exceeded guidance by 23%. Compared to prior quarter income of $108 million, the improvement in third quarter income resulted primarily from improved realized caustic soda and PVC prices, along with higher chlorovinyl sales volumes.

Midstream and Marketing
Midstream and marketing pre-tax loss for third- 2020 was $2.8 billion, compared to a loss of $7 million for second-quarter 2020. Excluding items affecting comparability, which included the write-down of Occidental's equity-method investment in WES, midstream and marketing pre-tax third quarter results did not materially change from the second quarter. Excluding WES equity income, midstream and marketing pre-tax loss for third-quarter 2020 was $143 million. 

Guidance
The full-year 2020 capital program is projected at $2.4-2.6 billion. The company expects fourth-quarter 2020 capital spend of $500-700 million. Total production of 1.105-1.155 MMboe/d (excluding 33,000 boe/d of production associated with Colombia onshore asset sale) is expected for the upcoming quarter, with 360,000-380,000 boe/d expected to come from Permian resources. Two additional rigs will be added in New Mexico and another two in Texas Delaware for seven total Permian rigs by yearend.