Occidental Petroleum reported earnings results for the second quarter that were below analyst expectations, joining the ranks of oil producers feeling the effect of lower prices.
The net earnings came in at $605 million for the quarter, with pre-tax profits from oil and gas at $1.1 billion, versus $1.6 billion a year earlier. The pre-tax figure was affected by writedowns on assets in the Powder River Basin that Oxy said had decided not to invest in further.
During the reporting period, the company’s realized price for crude oil marked a 32% decline to an average of $73.59.
At the same time, Oxy’s production was marginally higher than planned during the second quarter, at 1.218 million barrels of oil equivalent daily. As a result, the company raised its full-year production guidance to 1.210 million barrels of oil equivalent daily.
In a further update, Occidental said it had bought back some $425 million worth of common shares, bringing its year-to-date repurchase total to 40% of the planned $3 billion. It is also buying back preferred stock, with the amount bought back in the second quarter at $522 million, bringing the year-to-date total to 12% of its preferred stock or $1.2 billion.
Earlier this year, Occidental said it would use the extra cash from its record 2022 profits to buy back stock. At the time, the company said that if oil prices remained above $75 per barrel, it could accelerate its buyback program.
While Oxy has been returning cash to shareholders-including Warren Buffett-Buffett has been buying more stock in the company. By late June, Berkshire Hathaway had boosted its holdings in the company to over 25%, fueling speculation about a possible takeover despite Buffett’s denial that he has any plans for that.
“There’s speculation about us buying control, we’re not going to buy control,” Buffett said in May. “We wouldn’t know what to do with it.”
By Charles Kennedy for Oilprice.com
Read More: Occidental Petroleum Falls Short Of Quarterly Profit Expectations