By Sabrina Valle and Sourasis Bose
(Reuters) -U.S. oil producer Occidental Petroleum (NYSE:OXY) on Wednesday beat estimates for fourth-quarter profit, delivering its best quarterly output in three years and trimming spending.
U.S. oil and gas production has been on the rise, with companies cutting costs and boosting drilling efficiency in longer horizontal wells to keep up with demands for high returns from oil stock investors.
Earlier this month, Occidental increased its quarterly dividend payments by 22%, to 22 cents per share. It projected capital expenditures of about $4.9 billion in 2024, just below $5 billion last year.
"We are continuing to focus on delivering long-term value for our shareholders," Chief Executive Vicki Hollub said in a statement.
The Houston, Texas-based company projected a marginal increase in oil and gas production this year to 1.25 million barrels of oil equivalent per day (boepd). It expects an increase in productivity in the U.S. Permian basin and the Rocky mountains, with a slight volume decline from the Gulf of Mexico.
The estimates do not include the approximately 170,000 boepd in expected production coming from the $12 billion acquisition of shale producer CrownRock, which is pending regulatory approvals.
The producer reported fourth-quarter production of 1.234 million boepd, 7,000 boepd above the year-earlier quarter.
The uptick in production helped offset a decline in prices. Its average realized price for oil decreased by about 2% from the prior quarter to $78.85 per barrel.
The company also suffered from higher lease operating expenses in its oil business and higher costs of raw materials for its chemical business.
Its production from the Permian basin, spread across Texas and New Mexico, rose 4.1% to 588,000 boepd during the fourth quarter. Occidental forecast first-quarter production in the range of 1.16 to 1.20 million boepd.
It kept its budget for the low carbon business at $600 million. Occidental is using its oil business to fund a plan to build dozens of plants in the U.S. able to capture carbon emissions from air and bury them underground.
Occidental reported adjusted earnings of 74 cents per share for the quarter ended Dec. 31, compared with analysts' estimates of 71 cents per share, according to LSEG data.