Occidentals Net Falls 19% on Lower Oil, Gas Prices

Occidentals Net Falls 19% on Lower Oil, Gas Prices

Occidental Petroleum Corp., the fourth-largest U.S. oil company, said fourth-quarter profit fell 19 percent on lower oil and natural gas prices.

Net income fell to $928 million, or $1.09 a share, from $1.15 billion, or $1.40, a year earlier, Los Angeles-based Occidental said in a statement today. The company was expected to earn $1.04 a share, the average estimate from four analysts surveyed by Bloomberg. Sales fell 1 percent to $4.14 billion.

Fourth-quarter oil and gas production from continuing operations rose 13 percent to the equivalent of 616,000 barrels of oil a day, led by gains from acquisitions, the company said.

The production figures exclude output from Ecuador, which was equivalent to 43,000 barrels of oil a day in the fourth quarter of 2005.

Occidental reclassified its Ecuadorian output as discontinued operations after the South American country’s government seized the company’s assets last May. Chief Executive Officer Ray Irani is seeking damages of more than $1 billion from the Ecuadorian government for the seizure.

The company said it was paid an average of $51.18 a barrel for its oil in the fourth quarter, a drop of 1.3 percent from a year earlier. Its gas fetched an average of $5.64 per thousand cubic feet, a decline of 43 percent.

Gas futures traded on the New York Mercantile Exchange plunged 44 percent last year as mild weather swelled U.S. inventories of the heating and power-plant fuel. Gas accounts for about 20 percent of Occidental’s production. Oil prices were little changed last year.

One-Time Items

The fourth-quarter results included gains of $89 million for litigation settlements and $57 million from the sale of 10 million shares in Lyondell Chemical Co., Occidental said. Also included were costs of $20 million for the purchase of debt on the open market and $40 million from changes in compensation programs.

The statement was released before the start of regular trading on U.S. stock markets. Occidental’s shares rose $1.11, or 2.5 percent, to $46.20 yesterday in New York Stock Exchange composite trading.

Exxon Mobil Corp., Chevron Corp. and ConocoPhillips are the three largest U.S. oil companies by market value.

Source: www.bloomberg.com

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