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Higher crude oil production helped Occidental Petroleum book a profit increase for the third quarter of the year, beating analyst expectations.
The company reported adjusted net income attributable to shareholders of $1.1 billion, or $1.18 per share. Analysts had expected a figure below $1 per share.
Pre-tax profits from oil and gas operations rose to $2 billion in the third quarter, from $1.1 billion in the second quarter, the company also said.
"Our teams continued their outstanding performance across all three of our business segments resulting in our strongest earnings and cash flow from operations to date this year," chief executive Vicki Hollub said.
Hollub went on to report that Oxy had completed some 60% of its planned stock repurchase program and had retired more than 15% of its preferred stock. That stock was issued to Berkshire Hathaway, which financed Occidental’s acquisition of Anadarko a few years ago.
While income from upstream activities rose, profits at Oxy’s chemicals and midstream business declined, with the latter swinging into a loss.
In terms of production, Occidental reported an average daily production rate of 1.22 million barrels of oil equivalent, which was significantly higher than its projected third-quarter production rate of 1.19 million boed.
Like other oil producers, Oxy benefited from higher average oil prices in the third quarter. Even so, the company said two months ago it had no immediate plans for boosting production.
Speaking on Bloomberg Television in September, Occidental CEO Vicki Hollub said, “Only in a market where we see balance would we increase our oil production – and even then it would be at a moderate pace.”
Even if oil prices topped $100 per barrel, Hollub told Bloomberg, they would not likely be sustainable long enough to lead to demand destruction.
Prices have meanwhile declined, with worry about the prospects of oil demand outweighing any supply tightness concern among traders.
By Charles Kennedy for Oilprice.com
Charles is a writer for Oilprice.com