Occidental Profit Up 36% on Spike in Gas Prices

Occidental Petroleum Corp. said Thursday that its second-quarter profit rose 36% on higher gas prices, particularly in California.

The oil and natural gas explorer said profit from operations rose to $466 million, or $1.25 a share, from $343 million, or 93 cents, a year earlier, as revenue rose 20% to $3.85 billion.

The results far exceeded the $1.04-a-share average estimate of analysts polled by First Call/Thomson Financial.

“Strong energy prices, particularly in California’s natural gas market, resulted in outstanding earnings and cash flow,” Chairman Ray Irani said. “The chemical segment returned to profitability in the second quarter after experiencing losses for the previous two quarters.”

Westwood-based Occidental said profit in its oil and gas business jumped 43% to $799 million. Profit in the chemicals segment fell 62% to $58 million. Lower prices for its products and the higher cost of feed stocks and energy such as natural gas hurt earnings, Occidental said.

Occidental said it paid $244 million in debt during the quarter, bringing total debt to $5.9 billion, or 51% of capitalization.

In the latest quarter, a gain of $7 million from the sale of properties in the Gulf of Mexico made net income $473 million, or $1.26 a share. A year ago, a $300-million gain from the sale of Canadian assets and a $79-million charge to write down the value of chemical businesses made net income $564 million, or $1.53.

Occidental shares rose 42 cents to close at $26.07 on the New York Stock Exchange.