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Home / Business / Random Posts $ 6.6 billion fee after oil price crash

Random Posts $ 6.6 billion fee after oil price crash



(Bloomberg) – Occidental Petroleum Corp. reported a $ 6.6 billion write-off in the second quarter, equivalent to more than 40% of its market value, as the fall in energy prices took its toll on U.S. barley oil producers.

More than two-thirds of the devaluation was to account for the lower value of its land area at sea, with the remainder in the Gulf of Mexico and beyond, the Houston-based company said in a statement Monday. Shares fell 3.6% to 17:02 in post-market trading in New York.

The Occidental is not only getting major damage after the Covid-19 pandemic’s crushed oil demand worldwide in the second quarter, but its writing is one of the largest compared to its size. Although the charges do not affect cash flows, they increase certain leverage ratios, potentially increasing borrowing costs for oil producers.

Excluding listed properties, Occidental made an adjusted loss of $ 1.76 a share, worse than the $ 1.68 average estimated by analysts in a Bloomberg study. Production entered the high end of the Western direction, with the equivalent of 1.41 million barrels of oil per day, boosted by production from the Permian Basin of Texas and New Mexico.

Almost every major oil and gas company has received or warned of large property holdings after energy markets collapsed in the second quarter, eroding the value of their reserves. With uncertainty about when or if oil demand will be fully recovered and wild costs cut, the industry is effectively saying that large chunks of its oil on land can never be produced economically.

The loss adds further pressure on Occidental, which is struggling with a $ 40 billion debt burden following its premature acquisition of Anadarko Petroleum Corp last year. The company is currently considering selling assets to repay the debt and expects to receive about $ 2 billion from sales in the near term, she said in a presentation on her website.

To cope with falling oil prices in the second quarter, Occidental has been in full swing, cutting its capital budget by more than half to $ 2.5 billion for the year. That’s under the $ 2.9 billion a year it needs to keep production ahead.

The company said it plans to operate only one oregano in the Perm Basin for the rest of the year and none in the Rocky Mountains, a stark contrast to the growth plans envisaged when it overtakes Chevron to buy cross-rival Anadarko last year.

(Profit updates in paragraph 4)

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