Occidental Petroleum (OXY.US) reported its highest quarterly profit since 2022 on Wednesday, surpassing Wall Street expectations, driven by rising oil prices and increased output from the U.S. shale producer.
Revenue for the second quarter reached $8.32 billion, a 57.0% increase year-over-year, exceeding estimates by $1.07 billion. Adjusted earnings per share came in at $2.40, beating consensus by $0.55.
The average price of benchmark Brent crude jumped 19.2% year-over-year to $89.62 per barrel, as the Middle East conflict, now in its sixth month, disrupted energy supplies and shipping through the key Strait of Hormuz. For the three months ending June 30, Occidental's realized price for crude oil produced surged over 50% year-over-year to $96.78 per barrel.
Global average production rose 2.4% to 1.43 million barrels of oil equivalent per day, driven mainly by strong U.S. performance. However, Occidental's international assets in Algeria, Oman, Qatar, and the United Arab Emirates saw production fall 12% to 205,000 barrels of oil equivalent per day, as repeated regional conflicts and attacks on energy infrastructure kept this key oil-producing region on edge.
Larger U.S. competitors with higher quarterly output also posted robust second-quarter profits due to the oil price surge. Chevron recorded its highest profit in six years, while Exxon Mobil logged its largest profit in four years.
Oil price gains propel Occidental's profit near 2022 peak
For the current quarter, Occidental expects production of 1.40 million to 1.44 million barrels of oil equivalent per day, with Permian Basin output averaging between 795,000 and 815,000 barrels per day. The company also narrowed its full-year production outlook to 1.42 million to 1.45 million barrels of oil equivalent per day, with international output expected between 220,000 and 224,000 barrels per day. Earlier this year, the company had lowered its production guidance citing the impact of the Iran war on its operations.
In 2025, Occidental's international assets will account for 16.2% of total production. The company's 2025 international oil production is 232,000 barrels of oil equivalent per day. Occidental now expects 2026 capital expenditure of $5.5 billion to $5.9 billion, down from a previous forecast of $6.3 billion to $6.7 billion.
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