Jan 30 (Reuters) - Occidental Petroleum Corp, the fourth-largest U.S. oil and gas company, posted a better-than-expected quarterly profit after selling more crude than it produced.
More efficient drilling and higher domestic crude prices also helped Occidental to increase its profit in the fourth quarter, despite a decline in production from its Middle Eastern fields and severe winter weather in the United States.
Occidental, which is looking to sell a minority stake in its Middle East business, said realized U.S. crude prices rose 8 percent in the quarter ended Dec. 31, helping the company to a net profit of $1.64 billion.
At $2.04 per share, earnings were significantly higher than the 42 cents per share earned a year earlier, when the company wrote down the value of gas properties in the U.S. midcontinent by $1.1 billion.
Even excluding the one-time gain and an after-tax charge of $395 million related to the impairment of some domestic oil and gas assets, Occidental earned $1.72 per share in the quarter ended Dec. 31. Net sales were flat at $6.17 billion.
Analysts on average had expected earnings of $1.67 per share on revenue of about $5.79 billion, according to Thomson Reuters I/B/E/S.
"Occidental sold more than it produced," said Raymond James analyst Pavel Molchanov. "It took volumes out of inventory, and that's why it beat estimates."
Los Angeles-based Occidental said output in the fourth quarter fell to 750,000 barrels of oil equivalent per day (boe/d) from 779,000 boe/d a year earlier.
But sales volumes exceeded production due to the timing of shipments from the company's international operations, mainly in Iraq.
Occidental said in October that it planned to sell a minority stake in its Middle East and North African operations, as well as announcing strategic alternatives for some assets in the U.S. Rocky Mountain region, which have lower returns.
In the fourth quarter, Occidental also recorded a $665 million after-tax gain from the sale of part of its stake in the general partner of pipeline company Plains All American Pipeline LP.
The company's realized price for U.S. crude in the fourth quarter rose to $94.52 per barrel, while worldwide crude gained 3 percent to $99.27 per barrel and domestic gas prices jumped 8 percent.
Occidental's shares closed at $87.82 on the New York Stock Exchange on Wednesday.
Copyright 2017 Thomson Reuters. Click for Restrictions.
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