Occidental Petroleum Corp. has updated its production and capital expenditure forecasts for 2024 following the completion of its $10.8 billion acquisition of CrownRock LP earlier this month.
Increased Production and Capital Spending
Occidental Petroleum has announced a 5% increase in its production forecast for the year, aiming for approximately 1.32 million barrels of oil equivalent per day (MMboed) in 2024.
This boost in production is primarily attributed to the addition of assets from the Permian Basin. Additionally, the company plans to raise its capital spending by around 6%, setting the new budget at $6.9 billion.
Expansion in the Permian Basin
The acquisition of CrownRock LP significantly enhances Occidental’s presence in the Midland portion of the Permian Basin by approximately 25%.
Furthermore, it quadruples the company’s production from the eastern segment of the basin.
This strategic deal positions Occidental to unlock future drilling opportunities by aligning its new acreage with its existing sites, thus streamlining its operational capabilities.
Financial Performance and Market Reaction
In the second quarter, Occidental Petroleum reported earnings of $1.03 per share, surpassing the median analyst estimate of 78 cents per share.
This positive performance was driven by increased production from the Permian Basin and the Gulf of Mexico, coupled with stronger-than-expected midstream earnings. Despite a 2.1% surge in share prices during extended trading hours, the shares later experienced a decline.