Occidental Petroleum’s Net Income Falls 49%

Occidental Petroleum Corp. said profit fell 49% in the second quarter as gas prices tumbled.

Shares of the Los Angeles-based oil and natural gas company fell $1.27, or 5%, the biggest drop in 20 months, to $23.63 on the New York Stock Exchange.

Occidental said net income declined to $240 million, or 63 cents a share, from $473 million, or $1.26, a year earlier, as revenue declined 18% to $3.14 billion.

The results were a penny better than the average estimate of analysts polled by Thomson First Call.

The price Occidental got for its U.S. gas fell 66%, to $2.92 per thousand cubic feet, driving profit from oil and gas production down 48% to $421 million, the company said.

Gas had surged in the second quarter of 2001 as electricity prices more than doubled.

The average price of gas in California, where Occidental produces more than half its output, fell 68%, according to Bloomberg Energy Service statistics. Oil on the Nymex dropped 6.1% from a year earlier.

Nymex oil fell 4.4% on Monday on a report that Nigeria may leave the Organization of the Petroleum Exporting Countries and boost production.

Occidental said it increased oil and gas production by 14% in the quarter, keeping it on target for a 5% increase in 2002. Capital spending rose 5.5% to $326 million.

Profit in the chemical unit fell 43% to $33 million, including a $4-million loss from its 30% stake in Equistar Chemicals, which is being sold to Lyondell Chemical Co.

Occidental said it expected a gain of at least $100 million from the sale, which is expected to close at the end of August. It had posted $240 million in expenses in the fourth quarter from the sale.

After the transaction, Occidental would own 21% of Lyondell, which now owns 41% of Equistar.