Occidental Petroleum Corp. (OXY) - Get Report shares slumped lower Tuesday after the oil group posted a larger-than-expected second quarter loss and booked a $6.6 billion writedown on its oil and gas assets.
Occidental said its adjust net loss for the three months ending in June was pegged at $1.76 per share, just outside the Street consensus forecast of $1.70 per share and its third consecutive quarter in the red. Group revenues, Occidental said, fell 32.6% from last to $2.98 billion, well shy of analysts' $3.8 billion estimate.
Looking into the final half of the year, Occidental said it sees a 37% slump in production from the Permian Basin, where last year's $38 billion purchase of Anadarko Petroleum makes in the region's biggest shale producer, as well as a current-quarter slide of 13% in traditional oil and gas production. Occidental also followed larger rival Chevron Corp. (CVX) - Get Report in slashing the value of its oil and gas properties by $6.6 billion.
“We continue to make progress on our debt structure and have significantly exceeded our cost savings targets while delivering operational excellence across our business,” said CEO Vicki Hollub. “These decisive financial and operational actions reflect our leadership as a low-cost operator, positioning us for success when market conditions improve.”
Occidental shares were marked 1.9% lower in pre-market trading Tuesday to indicate an opening bell price of $16.17 each, a move that would extend the stock's year-to-date decline to around 60.8%.
Last week, Chevron posted a wider-than-expected second quarter loss and warned the commodity demand won't return to pre-pandemic levels until at least the end of the year.
West Texas Intermediate crude prices averaged $40.84 per barrel over the three months ending in June, down 29% from the same period last year.
Prices were also hit by the biggest single-day decline on record, which took crude prices to -$37.63 per barrel in mid-April, as a lack of physical storage space wreaked havoc on global crude markets just as futures contracts for the month were set to expire.