Occidental Petroleum Corp. reported a net loss attributable to common stockholders for this year’s third quarter of $912 million and adjusted income attributable to common stockholders of $93 million.
Third-quarter pretax items affecting comparability include Anadarko Petroleum Corp. merger-related transaction costs and debt financing fees of $969 million, oil and gas impairment charges of $325 million, and a gain on sale of $111 million related to Oxy’s sale of its interests in Plains All American Pipeline LP and Plains GP Holdings LP (OGJ Online, Aug. 8, 2019).
The company is making “significant progress” with the integration of Anadarko, said Vicki Hollub, Oxy president and chief executive officer. The company is delivering “outstanding operational results” and remains committed to deleveraging and returning excess free cash flow to shareholders, she said.
In the quarter, the company repaid $4.9 billion of debt, including all 2020 debt maturities and returned $600 million to shareholders.
Oil and gas pretax income for the third quarter was $221 million compared with $726 million for the prior quarter. Third-quarter results include a $285 million write-off of unproved US leases in areas where Oxy no longer plans to pursue exploration activities and a $40 million impairment charge related to the early termination of the Idd El Shargi South Dome contract in Qatar. Results also include a mark-to-market gain of $75 million on crude oil hedges. Excluding impairment charges and the mark-to-market gain, the decrease in third quarter income reflects lower realized crude oil prices.
Total average production volume for the quarter was 1.16 million boe/d, which included legacy Anadarko continuing operations of 377,000 boe/d and discontinued Africa operations of 41,000 boe/d. Production decreased for legacy Oxy operations, which produced 737,000 boe for the quarter compared with average production of 741,000 boe/d for this year’s second quarter. Legacy Oxy Permian Resources average production volume of 300,000 boe/d exceeded third-quarter guidance, up 4% on a sequential quarter basis and 33% year-over-year because of improved well performance and development activity. International average production volume was slightly below third quarter guidance at 279,000 boe/d because of maintenance activities in the Middle East.
OxyChem pretax income for the third quarter was $207 million compared with $208 million for this year’s second quarter, despite vinyl margins coming under pressure from increased ethylene costs as a result of industry-wide ethylene cracker downtime. Higher ethylene costs were offset by stronger sales and production across most product lines.
Marketing and other midstream pretax income for the quarter was $266 million compared with $331 million for the year’s second quarter. Third quarter pretax income includes a pretax gain on sale of Plains for $111 million. Excluding the gain on sale, the decrease in third-quarter pretax income reflected lower marketing results due to a narrowing of the Midland-to-Gulf Coast spread.
As a result of acquiring Anadarko, Oxy added a WES Midstream operating segment, which includes the operations of Western Midstream Partners LP (WES), for the third quarter. WES Midstream pretax income for the quarter was $134 million and income attributable to noncontrolling interests was $42 million.