Occidental Petroleum Corp (NYSE:OXY) stock rose 2.67% (As on November 8, 11:18:43 AM UTC-4, Source: Google Finance) after the company beat analysts’ third-quarter profit estimates on strong U.S. oil production, but its results were well below a year ago due to lower energy prices and weaker chemical and pipeline results. Occidental sold its oil for an average $80.70 per barrel in the third quarter, down from $83.64 per barrel from a year earlier, but up 10% from the second quarter. It bought back $342 million of Berkshire Hathaway’s preferred shares, bringing redemptions this year to 15% of the initial $10 billion investment by Warren Buffett’s firm that was used by Occidental to fund its acquisition of Anadarko Petroleum in 2019. The payments came as Berkshire last month bought about $246 million in Occidental stock, raising its stake to 25.8%.
Further, the U.S. oil and gas producer pumped 1.22 million barrels of oil and gas per day (mboed), well above the 1.19 mboed midpoint of its August forecast. Results were helped by asset sales that generated $142 million in pre-tax proceeds. Its chemical and midstream unit earnings fell compared to a year ago. Midstream swung to a loss of $130 million from a $104 million profit. Its chemicals business profit fell to $373 million from $580 million a year ago.
Separately, the company said investment firm BlackRock agreed to invest $550 million in a proposed direct air capture carbon project in Texas.
OXY in the third quarter of FY 23 has reported the adjusted earnings per share of $1.18, beating the analysts’ estimates for the adjusted earnings per share of 84 cents, according to LSEG. Adjusted earnings fell by more than half to $1.13 billion compared to the same quarter last year. Occidental’s total production for the quarter rose to 1.22 million barrels of oil equivalent per day (boepd) compared with 1.18 million boepd a year earlier, on higher production at the Rockies and the Gulf of Mexico.
Additionally, the company has increased the quarterly dividend to $0.18 per share in 2023.
On the other hand, BlackRock is set to invest $550mn into the world’s biggest direct air capture project, which is being developed by Occidental Petroleum, in a sign of growing investor confidence in the nascent technology. The companies said that they would form a joint venture to develop Stratos, a project under construction in west Texas that aims to extract carbon emissions from the atmosphere