(Reuters) - Occidental Petroleum Corp’s quarterly profit beat estimates on Thursday but the company’s shares fell to a near eight-year low as the oil and gas producer forecast lower-than-expected production for the current quarter.
Chesapeake Energy Corp’s shares also fell, after the company posted a bigger-than-expected decline in production, even as it spent more than analysts estimated.
The fall in the companies’ shares came amid a selloff in the broader industry, triggered by a more than 4 percent fall in global oil prices.
Occidental expects full-year capital spending to be toward the high end of $3 billion-$3.6 billion it had forecast earlier in the year, Christopher Stavros, the company’s chief financial officer, said on a post-earning call.
Stavros cited a ramp up in activity in Texas’ Permian Basin - the focus of Occidental’s oil and gas operations. The company plans to deploy 11-13 rigs in the prolific shale field this year.
The company, which recently sold natural gas assets in South Texas to fund Permian drilling, hinted at disposing some non-core acreage in the Permian basin.
“The tail of our portfolio includes Permian Resources acreage that is not strategic to us, but synergistic and valuable to others,” Occidental’s Chief Executive Vicki Hollub said on the call. “This will be done as needed and opportunistically.”
The South Texas sale led to a reduction in Occidental’s 2017 production target.
The company now expects to produce 595,000-615,000 barrels of oil equivalent per day (boe/d) this year, lower than a prior estimate of 625,000-645,000 boe/d.
Occidental forecast current quarter output of 580,000–595,000 boe/d. But the midpoint of that estimate fell short of the 633,000 boe/d analysts were expecting.
The company’s worldwide production declined 11 percent to 584,000 boe/d on average in the first quarter. But higher oil prices during the quarter helped make up for the fall.
The Houston, Texas-based company said it realized $49.04 per barrel of oil in the quarter, up from $29.42, a year earlier.
Occidental’s profit rose 50 percent to $117 million, or 15 cents per share, in the latest quarter.
Excluding an asset impairment charge, Occidental’s profit was 16 cents per share, according to Thomson Reuters I/B/E/S, higher than the analysts’ average estimate of 7 cents.
The company shares fell as much as 3.8 percent to $57.91 on the New York Stock Exchange.
Reporting by Swetha Gopinath in Bengaluru; Editing by Arun Koyyur