Occidental Meets Production Target - Analyst Blog

Occidental Petroleum Corporation (OXY) along with Korea Gas Corporation has attained and sustained a 10% increase in oil production at the Zubair field, near Basra, in southern Iraq.

In January 2010, Occidental Petroleumalong with Eni, Korea Gas Corporation and Missan Oil Company signed a technical service contract with the government of Iraq to develop the Zubair Field. Occidental has a 23.44% stake in the project.

Initial production from the Zubair field was 183,000 barrels of oil a day when the consortium started field operations in the first quarter of 2010. It has now crossed 200,000 barrels of oil per day. The consortium is also gaining $2 per barrel on incremental oil production along with contract cost recovery.

The consortium now intends to spur production to 1.2 million barrels of oil a day from the Zubair field. This will be an increase of about 1 million barrels of oil per day.  The consortium expects to attain this goal over the nest six years and then maintain it for another seven years.

In the third quarter of 2010, daily oil and gas production volumes of Occidental Petroleum averaged 751,000 barrels of oil equivalent, compared with 705,000 barrels of oil equivalent in the third quarter of 2009, up 6.5%.

During third-quarter 2010, Occidental Petroleum reported operating earnings of $1.47 per share surpassing the Zacks Consensus Estimate as well as year-ago results.  

Net earnings of El DuPont de Nemours & Company (DD), one of the direct competitors of Occidental Petroleum, plunged 11% year over year to 40 cents in the third quarter due to a patent expiration in its Pharmaceutical business. However, results beat the Zack Consensus Estimate.

Exxon Mobil Corporation (XOM), also competing with Occidental Petroleum, posted earnings of $1.44 per share in the most recent quarter, beating the Zacks Consensus Estimate as well as the year-ago figure, driven by higher commodity price realizations, improved refinery margins and solid chemical contributions.

For Occidental, the Zacks Consensus Estimate for fourth-quarter 2010 is $1.50 per share. For full years 2010 and 2011, the Zacks Consensus Estimates are, respectively, $5.58 and $6.93.

We maintain our Neutral recommendation on OccidentalPetroleum.

Based in Los Angeles, California, Occidental Petroleum along with its subsidiaries operates as an oil and gas exploration and production company. Occidental has operations in the United States, Middle East/North Africa and Latin America.

 
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