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Occidental posts $8 billion loss, outlines oil production cuts

The logo for Occidental Petroleum is displayed on a screen on the floor at the NYSE in New York

(Reuters) – Occidental Petroleum Corp on Monday posted a $8.35 billion second-quarter loss on lower energy prices and write-downs as the U.S. oil producer has been trying to reduce debt amid a pandemic that has sapped fuel demand and prices. Occidental, which borrowed heavily to finance last year’s $38 billion purchase of rival Anadarko Petroleum, cut the value of its oil and gas properties by $6.6 billion, joining BP, Chevron and Total in massive write-downs as the industry now expects energy prices to stay low for years.

Its oil and gas production will fall 13% this quarter over last, and another 5% in the fourth quarter, to 1.16 million barrels of oil and gas per day, the company said. In the Permian, where it became the largest operator through the Anadarko purchase, shale output will drop 37% this year, it said.

Shares fell nearly 6% in late trading after rising $1.03 at $16.48. The stock is down 61% so far this year.

The average price Occidental received for crude oil plummeted about 61% to $23.17 per barrel in the second quarter as oil prices crashed. It has cut jobs, slashed its dividend, reduced spending plans and sold assets to shore up its finances.

It expects to receive $2 billion or more in asset sales, according to the presentation.

Among the assets Occidental is trying to sell is a package of land and minerals in Wyoming and Colorado. The company has said that it hopes to close that sale in the fourth quarter.

Its net loss was $8.35 billion, or $9.12 per share, in the quarter, compared with earnings of $635 million, or 84 cents per share, a year earlier.

Excluding one-time items, the company lost $1.76 per share, compared with analysts’ average estimates of $1.68, according to Refinitiv IBES.

(Reporting by Jennifer Hiller in Houston and Arathy S Nair in Bengaluru; Editing by Sriraj Kalluvila, David Gregorio and Aurora Ellis)

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