Occidental’s Earnings Jump 50% in Quarter

High oil prices, coupled with higher production, boosted Occidental Petroleum Corp.’s profit 50% in the first quarter, the company said Friday.

The Westwood company said net income was $487 million, or $1.24 a share, compared with $325 million, or 86 cents, a year earlier.

Revenue rose 8.8% to $2.58 billion from $2.37 billion.

Occidental, the nation’s fourth-largest oil and natural gas producer, said profit from its oil and gas sector rose 3% to $750 million. Oil production rose nearly 7% to 568,000 barrels per day.

Oxy’s strong showing was not surprising to some oil industry watchers considering that, at about $35 a barrel, crude oil is selling at “tremendous multiples of what it costs to find it,” said Tom Kloza, chief analyst at Oil Price Information Service. On Friday, June crude closed down 25 cents to $36.46 a barrel on the New York Mercantile Exchange.

During the first three months of 2003, barrel prices were near $34.

“Oil prices have exceeded even the most bullish estimates,” said Fadel Gheit, senior energy analyst at Oppenheimer & Co., and that has benefited Oxy.

Separately, the company said it signed an agreement extending its presence in the Cano Limon region of Colombia through the life of production, expected to continue until 2018. The region accounts for 6% of Oxy’s worldwide production.

A more significant move could come later this year. On Friday, the United States agreed to relax 18-year-old economic sanctions against Libya, where Occidental once pumped as much as 666,000 barrels a day and still holds contracts for drilling, according to the company.

Libya helped transform the company into “a significant player in the global oil business,” Chief Executive Ray Irani told a conference call of investors.

“We regard our return to Libya as one of our high-priority projects,” he said.

Occidental’s increase in first-quarter profit came despite a 15% boost in capital expenditures to $343 million, a result of increased drilling activity in Colombia and Yemen, as well as an expanded gas product in Qatar.

Occidental’s shares closed at $48.05, down 45 cents, on the New York Stock Exchange.