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Occidental Provides Update on Capital Spending and Cost Reductions

Gasoil News - Published on Wed, 01 Apr 2020

Image Source: Occidental Petroleum
Occidental Petroleum Corporation announced a further reduction in 2020 capital spending to between $2.7 billion and $2.9 billion from its original 2020 guidance of $5.2 billion to $5.4 billion, a midpoint reduction of 47 percent. At current commodity prices, 2020 annual production from continuing operations is expected to be 1,275,000 to 1,305,000 BOEPD, a reduction of 6 percent compared to prior guidance of 1,360,000 to 1,390,000 BOEPD.

The Company also announced it will reduce 2020 operating and corporate costs by at least $600 million compared to the original 2020 plan, including significant salary reductions for executive leadership. These cost reductions are in addition to previously announced operating and overhead synergies of $1.1 billion that are expected to be fully realized in 2020. The combination of synergy realizations and additional cost reductions is expected to reduce SG&A, Other Operating Expense, and Exploration Overhead to approximately $500 million on a future quarterly run-rate basis. Operating cost reductions are expected to lower 2020 domestic operating costs to approximately $7.00 per BOE.

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Posted By : Yogender Pancholi on Wed, 01 Apr 2020
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