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Gas industry

Occidental Petroleum Aims to Boost Earnings, Reduce Debt Amid Volatile Chemical Sector

Strategic Insights

— 1 min read

As the global chemical industry faces volatility, Occidental Petroleum Corp. is taking proactive steps to boost its oil and gas earnings and strengthen its balance sheet. The company aims to increase earnings from oil and gas operations to $225 million to $250 million this year, which should double to $500 million in 1997. To achieve this, Occidental plans to focus on enhanced oil recovery projects, strategic acquisitions, and cost cuts, while also targeting debt reduction by $1 billion by the end of next year.

Key Takeaways:

  • Occidental Petroleum aims to triple its oil and gas earnings to $225 million to $250 million this year, which should double to $500 million in 1997.
  • The company plans to reduce debt by $1 billion by the end of next year to alleviate high-interest payments and retain more profits.
  • Occidental will focus on enhanced oil recovery projects, strategic acquisitions, and cost cuts to improve oil and gas earnings.
  • The company's natural gas transmission and marketing unit, MidCon Corp., has been a stable source of earnings and cash flow.
  • Occidental expects to reduce net debt by at least $800 million by the end of this year.
  • The company may exceed its $1 billion debt-reduction goal and has already eliminated almost $2 billion in contingent liabilities at a cost of $300 million in litigation settlements and operating lease buyouts.
  • J. Roger Hirl, chief executive of Occidental Chemicals Corp., has expressed confidence that his unit will continue to be a key driver of the company's earnings.
  • The company expects a big rise in demand for some chemicals chains at the end of 1996, which should help boost earnings.

Statistics:

  • Occidental Petroleum's oil and gas earnings are expected to triple to $225 million to $250 million this year.
  • The company aims to reduce debt by $1 billion by the end of next year.
  • Net debt will be down by at least $800 million by the end of this year.
  • Occidental has already eliminated almost $2 billion in contingent liabilities at a cost of $300 million in litigation settlements and operating lease buyouts.
  • The company's natural gas transmission and marketing unit, MidCon Corp., has generated stable earnings and cash flow.

Sources:

  • [1] Occidental Petroleum Corp. (untimed)
  • [2] Dean Witter Reynolds Inc. (untimed)
  • [3] New York Times (untimed)
  • [4] Occidental Petroleum Corp. (untimed)

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