Occidental Petroleum reported a net profit of $3.6 billion for the second quarter of the year, down from $4.7 billion for the first quarter, boasting the highest quarterly free cash flow.
The adjusted income attributable to shareholders, however, was higher in the second quarter than the first, at $3.2 billion versus $2.1 billion for the first quarter.
“Oxy completed another quarter with strong operational and financial performance across all of our businesses. We generated $4.2 billion of free cash flow before working capital in the second quarter, our highest quarterly free cash flow to date. We also achieved a significant milestone as we surpassed our near-term debt reduction goal and activated our share repurchase program,” chief executive Vicki Hollub said in the company’s second-quarter press release.
During the same quarter, the company repaid $4.8 billion in debt and bought back some $1.1 billion worth of shares by the end of July this year.
Like other oil companies, Oxy has been reaping the rewards of higher oil prices and a guarded approach to production growth. All across the U.S. shale patch—and in Big Oil’s world, of course—companies are reporting record cash flows and reducing debt and repurchasing shares. One Scotiabank analyst even called the cash flow situation in shale oil “phenomenal”.
Of course, oil prices have been instrumental in this phenomenal cash flow performance, enhancing other financial metrics as well. Oxy reported pre-tax profit from continuing operations of $4.1 billion for the second quarter of the year, which was up from $2.9 billion in the first quarter. The company noted, however, that while prices for oil and gas had both increased during the period, so had lease operating expenses.
Warren Buffett’s Berkshire Hathaway has recently been raising its stake in Oxy, reaching nearly 20 percent in total, sparking rumors that it may be eyeing an acquisition.
Source: Oilprice.com
