The Permian Basin, where Occidental Petroleum Corp. just bought Shell Oil Co. and BP Amoco Plc's Altura Energy joint venture, is a primary element of plans for the Los Angeles oil and chemical company. "We will continue to be a consolidator in the basin," Oxy president Dale Laurance told fellow Independent Petroleum Association of America members at a midyear meeting. "Altura didn't have the funding to bring more oil and gas out of this basin," said Laurance, who also is chairman and chief executive officer of Occidental Oil and Gas Corp. He indicated that there are about 50 projects the Altura staff already has that the new owner is looking at pursuing. "[The Altura employees] are all pumped up about proving the old owners wrong about selling them. We're going to help them prove that point," Laurance maintained. Oxy's mantra is "grow in profit, not in size," Laurance said. "We needed to do a massive restructuring of our E&P company to get to where we needed to go." Every asset was looked at, and without emotion. "We would swap, sell or trade any single property that didn't fit that [financial-return focus]...We were everywhere and doing everything." The company was in more than a dozen countries. Today, it has narrowed its pursuits to four U.S. areas (Elk Hills, New Mexico, and the Hugoton and Permian basins), Colombia and Yemen. Nearly 90% of its assets are in these six regions. In the Gulf of Mexico, it is selling its properties on the continental shelf. In the deepwater Gulf, the company is a nonoperating explorer, such as in Horn Mountain Field with Houston-based Vastar Resources Inc., which has a two-thirds interest. "I don't see us being a big operator in the Gulf unless we get exquisitely lucky," Laurance said. Oxy has divested itself of overseas assets in Argentina, Malaysia, Bangladesh, The Netherlands, Peru, the Philippines and Venezuela, and domestically in East Texas and elsewhere. In Canada, it has sold its interest in Calgary-based Canadian Occidental Petroleum Ltd. "We're not anything like the company we were three years ago," Laurance said. At that time, 35% of its assets were E&P, with pipelines and chemicals representing the remaining 65%. Now, Oxy's asset mix is 75% E&P and 25% chemicals. "Today we're an E&P business. We have a nice little chemical business that throws off some cash flow," Laurance said. As time goes on, Oxy will increasingly be an E&P business. Production is 488,000 barrels of oil equivalent per day currently, versus 395,000 pre-reorganization. Of the current production, about 61% is domestic. That compares with 41% prior to the company's restructuring. -Nissa Darbonne
Recommended Reading
BP’s Kate Thomson Promoted to CFO, Joins Board
2024-02-05 - Before becoming BP’s interim CFO in September 2023, Kate Thomson served as senior vice president of finance for production and operations.
Magnolia Oil & Gas Hikes Quarterly Cash Dividend by 13%
2024-02-05 - Magnolia’s dividend will rise 13% to $0.13 per share, the company said.
TPG Adds Lebovitz as Head of Infrastructure for Climate Investing Platform
2024-02-07 - TPG Rise Climate was launched in 2021 to make investments across asset classes in climate solutions globally.
Air Products Sees $15B Hydrogen, Energy Transition Project Backlog
2024-02-07 - Pennsylvania-headquartered Air Products has eight hydrogen projects underway and is targeting an IRR of more than 10%.
HighPeak Energy Authorizes First Share Buyback Since Founding
2024-02-06 - Along with a $75 million share repurchase program, Midland Basin operator HighPeak Energy’s board also increased its quarterly dividend.