Occidental Petroleum Corp. will cut an additional $1.2 billion from operating and corporate expenses, reducing its full-year capital budget to $2.4-2.6 billion, down from two reductions in March, and down 50% from original 2020 guidance (OGJ Online, Mar. 10, 2020; Mar. 25, 2020).
The reductions were reported as part of the company’s first quarter results.
The company reported a net loss attributable to common stockholders for this year’s first quarter of $2.2 billion, compared to net income attributable to common stockholders of $631 million in the year prior period.
Adjusted loss attributable to common stockholders was $467 million. First quarter pre-tax items affecting comparability included $1.4 billion of goodwill impairment charges and equity investment losses mainly related to an equity investment in Western Midstream Partners LP (WES), $670 million mark-to-market loss on interest rate swaps, $580 million of impairment and related charges on domestic and international oil and gas properties, and $150 million of Anadarko acquisition-related transaction costs, partially offset by $1.0 billion of mark-to-market gains on crude oil hedges.
Oil and gas pre-tax income for the first quarter was $179 million, compared to $921 million for the fourth quarter of 2019.
Total average production volume of 1.416 MMboe/d for the first quarter exceeded the midpoint of guidance by 31,000 boe/d. Total US average production 1.175 MMboe/d included Permian resources production of 474,000 boe/d. International average daily production volumes of 241,000 boe/d came in at the high end of guidance. In light of the market disruption caused by COVID-19, full-year 2020 guidance has been withdrawn, the company said.
OxyChem Chemical pre-tax income for the first quarter of $186 million exceeded guidance by $36 million. Compared to prior quarter income of $119 million, the increase in first quarter income was primarily due to stronger chlor-alkali sales volumes and favorable feedstock costs, primarily ethylene and natural gas, partially offset by lower realized caustic soda pricing.
Midstream and marketing pre-tax loss for the first quarter was $1.3 billion, compared to a loss of $769 million for the fourth quarter of 2019. First quarter pre-tax loss included $1.4 billion of impairment charges on the goodwill related to Occidental's equity investment in WES and equity losses from WES's impairments of its goodwill.