Occidental Petroleum Corporation expects its oil and gas production in the Gulf of Mexico for the second to have been lower than previously guided due to curtailments, while lower oil prices reduced realizations from sales.
Ahead of the full Q2 earnings release on August 7, Oxy said in an SEC filing on Monday that its oil and gas output from the Gulf of Mexico – or as many oil firms are now calling it the Gulf of America – is estimated at around 125,000 barrels of oil equivalent per day (boepd).
“Occidental’s Gulf of America assets experienced production curtailments due to third-party constraints, extended facility maintenance, and schedule-related delays,” the company said in a summary of factors management believes will impact the second-quarter results.
Due to these production curtailments, Occidental’s sales volumes for the second quarter in the Gulf of Mexico are estimated to be 125,000 boepd.
That’s down from the previous guidance of 126,000-134,000 boepd production for the second quarter.
Oxy, however, affirmed that total company production is expected to remain within the guidance range for the quarter.
Occidental has guided for full-year production to average approximately 1.42 million boe for 2025.
Apart from lower Gulf of Mexico production, Oxy’s second-quarter earnings preview flagged lower oil realizations, with realizations expected at $63.76 a barrel in the second quarter, down from $71.01 per barrel in the first quarter.
For the first quarter, Occidental reported stronger-than-expected earnings, driven by higher commodity prices and improved operational efficiency.
Oxy is not the only oil company to have flagged weaker earnings due to the drop in prices.
The lower oil and gas prices are expected to dent the second-quarter earnings at BP, despite higher output and stronger refining margins, the UK-based supermajor said last week. BP joined Shell and ExxonMobil, who have also warned the market that weaker oil and gas prices during the second quarter would affect the Q2 financial results.
By Charles Kennedy for Oilprice.com
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