Occidental Swings to Loss, Posts Big Write-Down on Commodities Slump

By Tess Stynes 

Occidental Petroleum Corp. swung to a fourth-quarter loss as lower commodities prices offset production growth and led to a big asset write-down.

The company pegged its 2015 capital spending budget at $5.8 billion, down by a third from 2014 levels, the latest in a growing list of oil-and-gas companies to curb investment plans amid a recent slump in crude prices

"Although we have a large inventory of opportunities as well as the financial capacity to spend more capital, we think it is imprudent to accelerate some of these opportunities in the current low product price environment, " Chief Executive Stephen I. Chazen said. "We are focused on reducing our costs, which includes renegotiating our supplier contracts that are not reflective of weaker oil prices."

Occidental plans to "focus on our core assets in the Permian Basin and parts of the Middle East, Mr. Chazen. "We have minimized our development activities in the Williston Basin, domestic gas properties, Bahrain, and the Joslyn oil sands project."

Overall, Occidental reported a loss of $3.41 billion, or $4.41 a share, compared with a year-earlier profit of $1.64 billion, or $2.04 a share, a year earlier. The latest period included net charges of about $4 billion related to the sharp decline in oil and natural-gas liquids prices. Excluding items, per-share earnings were 72 cents, compared with $1.46 a year earlier. Segment net sales decreased 15% to $4.31 billion.

Analysts polled by Thomson Reuters expected per-share profit of 68 cents and revenue of $4.31 billion.

In December, Occidental completed the spin-off of its California oil and gas exploration unit into a separate company, now called California Resources Corp.

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