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Western Oil & Gas (OXY.US) reported higher-than-expected Q2 earnings, raising its full-year oil and gas production target.

AInvestWednesday, Aug 7, 2024 7:41 pm ET
1min read

Western Oil (OXY.US) announced its second-quarter earnings beat Wall Street expectations on Wednesday, marking the first earnings report since its acquisition of Centennial in May for $12 billion.

The company reported adjusted earnings of $1.03 per share for the quarter ended June 30, above the average analyst estimate of 77 cents a share.

The oil and gas company benefited from increased production in Colorado and rising oil prices. Its global realized oil price was $79.89 per barrel, up 5% year-over-year.

Production for the quarter increased to 1.26 million barrels of oil equivalent per day, above the 1.24 million barrels of oil equivalent per day expected by analysts. Production in the Anadarko Basin and the Gulf of Mexico were both at the high end of the company's guidance range.

However, its chemical segment saw a 32% decline in pre-tax earnings from the second quarter of 2022 to $296 million due to lower prices.

Looking ahead, Western Oil raised its oil and gas production target for the year to about 1.315 million barrels of oil equivalent per day, including assets from Centennial. Production is expected to increase by about 140,000 barrels of oil equivalent per day in the third quarter to 1.39 million barrels of oil equivalent per day.

The stock rose about 1% after hours.

The acquisition of Centennial solidified Western Oil's position in the Anadarko Basin. However, the deal also pushed Western Oil's long-term debt to about $28 billion, a significant amount, especially for a company that spent years cleaning up its balance sheet after paying a high price for Anadarko in 2019.

Western Oil reiterated its plan to use cash from the acquisition and the sale of up to $6 billion in assets to pay down debt before 2026. The company expects to sell $97 million of assets this year and reiterated its plan to pay off $450 million in short-term debt by August 2025.

Western Oil also increased its capital spending guidance for 2024 by $400 million to $6.9 billion.

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