Occidental readies for 2017

摘要

US independent Occidental Petroleum is preparing to ramp up drilling activity this year, after lowering its per-barrel costs by almost 60pc since 2014. The firm is counting on its core acreage in Texas’ Permian basin to drive growth, with $2bn worth of acquisitions in the region under its belt. Occidental has cut its total spend per barrel — calculated by adding capital expenditure (capex), general and administrative costs and operating costs, then dividing by sales — to $27.50/bl, down from $62/bl in 2014, beating a $28.50/bl target. The reduction has given it the confidence to raise capex for this year to $3.3bn-3.8bn, compared with a plan to spend less than $3bn in 2016. It revised up its production growth goal for last year to 7pc, compared with 4-6pc outlined in summer. The spending plans for 2017, which chief executive Vicki Hollub expects to be a “transition year for prices”, position it for stronger growth next year.