By Sabrina Valle and Seher Dareen
(Reuters) -Occidental Petroleum on Wednesday beat Wall Street estimates for second-quarter profit by 34%, in the first results since it closed the $12 billion acquisition of Permian-based producer CrownRock last week.
The Houston-based oil and gas firm benefited from higher oil production in Colorado and a rise in crude prices. Its worldwide realized crude oil prices stood at $79.89 per barrel, up 5% from a year earlier.
Shares of the company were 1.1% higher in trading after the bell.
Occidental (NYSE:OXY)'s quarterly production increased to 1.26 million barrels of oil equivalent per day (boepd), above analysts' estimate of 1.24 million boepd.
Output in the U.S. Permian basin and in the Gulf of Mexico was at the higher end of the company's guidance.
The company posted adjusted profit of $1.03 per share for the quarter ended June 30, compared with analysts' average estimate of 77 cents per share, according to LSEG data.
Occidental updated its production target this year to about 1.315 million barrels of oil and gas per day, from about 1.250 million boepd, to incorporate CrownRock's assets.
Third-quarter production is expected to increase about 140,000 boepd to 1.390 million boepd, it said.
The acquisition of CrownRock bolstered Occidental's position in the Permian basin. However, it also raised Occidental's long-term debt to about $28 billion - a significant amount, particularly for a company that has spent years cleaning its balance sheet after its costly acquisition of Anadarko in 2019.
Occidental kept unaltered its plans to use cash generated through the acquisition and up to $6 billion in asset sales through 2026 to pay down debt.
It estimates $970 million in asset sales this year. Occidental reaffirmed its plan to repay $4.5 billion in near-term debt by August 2025.
The pre-tax income of its chemical division fell by 32% from a year ago to $296 million in the second quarter, due to lower prices.
Occidental increased its 2024 capital spending guidance by $400 million, bringing it to $6.9 billion.