Why Occidental Petroleum Corporation (NYSE: OXY) stock is under pressure

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Occidental Petroleum Corporation (NYSE: OXY), an international oil and gas exploration and production company with operations in the United States, Middle East and Latin America, stock fell over 5.3% on 9th August, 2018 (as of 11:56 AM GMT-4; Source: google finance) though the company has beaten earnings estimate for the second quarter. For the second quarter of 2018, the company has reported net profit of $848 million as compared with $507 million delivered in last year’s second quarter. However, the earnings for the second quarter of 2018 were adversely affected due to approximately $90 million due to the timing of crude oil liftings in Oman and the non-cash, mark-to-market impact on crude oil volumes.

OXY in the second quarter of FY 18 has reported the adjusted earnings per share of $1.22, beating the analysts’ estimates for the adjusted earnings per share of $1.21, according to Thomson Reuters. The company had reported the adjusted revenue growth of 14.7 percent to $4.13 billion in the second quarter of FY 18.

During the second quarter, production fell 6 percent to 639,000 barrels of oil equivalent per day. While output jumped in the Permian, it slipped in Oman, dragging down overall output. The company’s average daily production volumes rose from the prior quarter by 14 percent, to 201,000 BOE in the second quarter of 2018, due to improved well performance. International average daily volumes grew by 8,000 BOE in the second quarter of 2018, compared to the first quarter of 2018, due to the successful completion of planned maintenance activities at Al Hosn Gas and Dolphin. The rise in Al Hosn Gas and Dolphin production was partially offset by the decrease in Qatar production for planned maintenance activities in the second quarter of 2018.

Additionally, OXY targets share repurchases at over $2 billion in the next 12 to 18 months and the company has increased the capital budget by $1.1 billion for high-return, short-cycle oil and gas projects.

Meanwhile, Crude oil logistics provider Lotus Midstream, LLC has entered into a definitive agreement to acquire the Centurion pipeline system and a Southeast New Mexico crude oil gathering system from Occidental Petroleum Corporation for an unspecified sum. The transaction is expected to close later in the third quarter of 2018, subject to customary closing conditions. Further, OXY has agreed to sell its Ingleside terminal in Texas, which links Eagle Ford Shale and Permian Basin production to key domestic and international markets, to Moda Midstream for an unspecified sum.

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