Occidental Petroleum Projects Steady Production for 2024, to Cut Two Permian Basin Rigs Occidental Petroleum Reveals Plans for Steady 2024 Production

Written By Michael Gary Scott
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Occidental Petroleum (NYSE:OXY) experienced a 0.2% increase in its stock price post-market on Wednesday following the announcement of better than expected Q4 adjusted earnings and revenues. The company also disclosed its intention to reduce spending on U.S. shale operations in a bid to enhance cash flow and reduce debt.

In the fourth quarter, production increased by approximately 7,000 barrels of oil equivalent per day (boe/day) compared to the same period the previous year, reaching 1.234 million boe/day. This exceeded the midpoint of the company’s guidance by 8,000 boe/day. However, the average realized price for oil dropped by about 2% year-over-year to $78.85 per barrel. Production from the Permian Basin in Q4 experienced a 4.1% year-over-year increase, reaching 588,000 boe/day.

Occidental (OXY) announced its intention to reduce capital spending in shale and exploration by approximately $320 million this year. Additionally, the company will idle two rigs in the Permian Basin, citing “efficiency and moderating activity.” Meanwhile, it plans to increase capital expenditure in the Gulf of Mexico, chemicals, and the enhanced oil recovery business.

The company anticipates a production level of 1.25 million boe/day for the fiscal year 2024, which is 1.3% higher than its Q4 2023 output. It also projects planned capital spending of around $6.5 billion, lower than the estimated $7 billion by analysts. However, the projection does not include the expected output of approximately 170,000 boe/day from the pending regulatory approvals for the recent acquisition of shale producer CrownRock.

The additional cash flow generated from the slowdown in operations will support the repayment of debt associated with the $10.8 billion CrownRock acquisition.

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