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Occidental Petroleum reports 46% profit gain in first quarter

April 28, 2011 |  8:11 am

Occidental Petroleum of Westwood rode a wave of higher oil prices and increased production in the first quarter to boost its profit to $1.55 billion compared with a year ago, a gain of nearly 46%.

Sales for the nation's No. 4 oil company also rose sharply, by more than 24%, to $5.73 billion from $4.62 billion a year ago. Its earnings per share came out at $1.90, compared with $1.31 a share a year ago. The $1.90 included 0.18 cents per share from discontinued operations.

Analysts said that Occidental, which is considered one of the world's best-run oil giants, benefited from sharply higher oil prices. The company said in a statement that its realized price for worldwide crude oil was $92.14 per barrel for the first quarter of 2011, compared with $74.09 per barrel for the first quarter of 2010.

"It’s a rising tide that lifts all ships. Their only negative was a loss of production in Libya related to the unrest there. The company is in very good shape. Occidental has a very strong balance sheet. This was one of Occidental’s best quarters since the second quarter of 2008," said Fadel Gheit, senior energy analyst for Oppenheimer and Co., who added that analysts had been expecting Occidental to hit $1.79 a share in earnings.

Occidental's chemical business also showed a strong improvement from higher exports, with the profit in that segment rising to $219 million from just $30 million a year ago.

Despite the loss of production in Libya, the company managed to end up with an increase in daily oil and gas production of 730,000 barrels a day in the quarter, compared with 701,000 barrels a day in the first quarter of 2010. Occidental said the increase in U.S. natural-gas production came from its recently finalized acquisitions in south Texas. The company said it also gained oil production in Iraq and in Oman.

Gheit said the company's newest acquisitions, including holdings in the Bakken oil field in the north central U.S., would result in considerable payoffs.

"Their holdings in the Bakken Field and the assets they obtained from Shell in the Permian Basin in Texas will definitely help their production going forward," Gheit said.

In other oil-industry news, ExxonMobil, the world's biggest oil conglomerate, announced earnings of $10.65 billion in the first quarter, or $2.14 a share. That compared with $6.3 billion, or 1.33 per share, a year ago. Exxon Mobil's sales grew 26% to $114 billion.

-- Ronald D. White