The company stated core income for the third quarter of 2015 of $24 million or $0.03 per diluted share. Reported income was a loss of $3.42 per diluted share for the quarter, including $2.6 billion after tax charges, reflecting the sharp decline in the oil and gas futures price curves, as well as projects that management determined it would cease to pursue. Operating cash flow for the quarter was $1 billion, with total cash on the balance sheet at quarter-end of $4.3 billion.
In announcing the results, Stephen I. Chazen, president and CEO, said, “Our third-quarter daily production increased to 689,000 boe from last year’s 595,000 boe, an increase of 16%. Permian Resources and the startup of Al Hosn drove nearly all of the 94,000 boe per day year-over-year growth. We have made a strategic decision to exit the Williston Basin, and will continue to evaluate and minimize our involvement in non-core operations in the Middle East and North Africa. This will result in improved operating cash flow, lower future capital commitments, lower G&A costs, and better overall financial returns for our remaining asset base.
“Although oil and NGL prices declined sequentially in the third quarter, our operating cash flow increased to $1 billion from $800 million in the second quarter of 2015. We reduced our capital spending another $300 million to $1.2 billion in the third quarter compared to $1.5 billion in the second quarter. Permian Resources continues to represent over 50% of total oil and gas spending. We continue to achieve drilling efficiencies and reduce unit operating costs. Wolfcamp well costs in the Delaware Basin are down over 40% and our Permian Resources unit operating costs are down 18% from a year ago.”
Cowen & Co. analysts view the move positively, noting that a shift in focus to core operations in the Permian and Al Hosn will yield drilling efficiencies and reduced operating costs that will be viewed positively by investors in a depressed commodity environment. “OXY continues to show the value of managing a portfolio divesting non-core Williston Basin assets improving cash flow while reducing future capital commitments,” the analysts continued.