Oil and natural gas producer Occidental Petroleum Corp reported better-than-expected quarterly results on Thursday as its Texas shale assets boosted total production even as crude oil prices slumped. The company, which also operates pipelines and produces chemicals, plans deep spending cuts thanks to the lower oil prices, while pumping more oil and natural gas this year in a sign of improving well economics. Occidental will slash its 2015 capital budget by 33 percent to $5.8 billion, and ramp up output by 6 percent to 10 percent.
Acreage in the Permian basin will get the bulk of the company’s attention this year, with less focus on North Dakota Bakken shale and holdings in Bahrain, Chief Executive Stephen Chazen said in a statement. Oil output jumped 42 percent in its Permian business, he said.
“We think it is imprudent to accelerate some of these opportunities in the current low product price environment,” he said. The company reported a fourth-quarter net loss of $3.41 billion, or $4.41 per share. It earned an income of $1.6 billion, or $2.04 a share, in the fourth quarter of 2013. The fourth-quarter 2014 results included a spinoff of units last month to form California Resources Corp, making year-ago comparisons difficult. Excluding those deals, Occidental said it earned $560 million, or 72 cents per share, in the fourth quarter, compared to $1.2 billion, or $1.46 a share, a year earlier.
By that measure, analysts had expected earnings of 68 cents per share, according to Thomson Reuters I/B/E/S. Quarterly production grew 4 percent to 616,000 barrels of oil equivalent. Earnings in the chemicals unit rose 25 percent, thanks to higher polyvinyl chloride margins, and earnings in the pipeline business rose 59 percent on higher volumes. Shares of Occidental rose 2.5 percent in premarket trading.