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    Impairments Push US Oxy to $8.4bn Loss in Q2


Natural gas production sharply higher on Anadarko acquisition

by: Dale Lunan

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Natural Gas & LNG News, Americas, Daily Digest, Corporate, Financials, News By Country, United States

Impairments Push US Oxy to $8.4bn Loss in Q2

After-tax impairment charges totalling $6.6bn pushed US independent Occidental Petroleum to a net loss of $8.4bn in Q2 2020, the company announced August 10 after market close. Net earnings in the second quarter a year ago were $635mn.

On an adjusted basis, the company reported a loss of $1.6bn against adjusted earnings of $792mn a year ago.

The impairment charges were largely related to Oxy’s oil and gas operations, where the pre-tax loss on continuing operations reached $7.7bn. That included pre-tax impairment charges of $4.3bn on unproved onshore acreage in the US, $1.2bn for proved domestic onshore and Gulf of Mexico assets, and $900mn on international assets.

After tax, the impairment charge on continuing operations in the second quarter was $5.2bn, alongside a $1.4bn impairment on discontinued operations.

Domestic US natural gas production was essentially unchanged from Q1 2020, at 1.7bn ft3/day, but substantially higher than Q2 2019 gas production of 419mn ft3/day. The increase largely reflected new production from the DJ Basin in Colorado. This was acquired as part of Oxy’s $55bn acquisition of Anadarko Petroleum, which was completed in August 2019 and was partly financed by Warren Buffett's Berkshire Hathaway vehicle, at a high cost to Oxy.

Middle East and Africa gas production was slightly higher year-over-year, at 564mn ft3/day versus 528mn ft3/day.