Shale producer Occidental beats quarterly profit estimates

The war in Iran weighed heavily on the?global?operations of Occidental Petroleum, a producer of shale oil.

After the U.S./Israeli war on Iran, oil prices were volatile in the first quarter. This was due to disruptions in supply routes and damage in key energy infrastructure.

Occidental’s average global production during the January-March period was 1,42 million barrels equivalent per day (mmboepd), compared to 1.39 mmboepd a previous year.

The price realized for each barrel of oil produced fell 1.6%, to $69.91.

James West, a Melius Research analyst, said that the lower realizations "were likely a timing problem."

Exxon Mobil, Chevron and other large rivals reported lower first-quarter earnings due to accounting mismatches resulting from timing effects related to derivatives.

Financial derivatives are used by most oil producers to hedge their sales of crude, natural gas, and refined products. This helps to reduce the risk of price fluctuations during the shipping time between the United States, Asia, and other countries.

The value of the physical shipments will not be reflected in your earnings until after the transaction has been completed.

After extreme volatility in March, the conflict in the Middle East caused oil prices to spike up by more than 94%.

Occidental lowered their annual production forecast to 1,41-1,46 mmboepd compared to?their prior expectations of 1.42-1,48 mmboepd. They cited lower output 'across all regions except the Rockies area in the United States.

It expects to produce between 1.39-1.43 million mmboepd in the current quarter.

According to LSEG, the Houston-based 'company' posted an adjusted profit of $1.06 for the three months ending March 31 compared to expectations of 58c. Reporting by Vallari Srivastava, Bengaluru. Editing by Sriraj Kulluvila

(source: Reuters)