Houston-based Occidental Petroleum said Monday in its quarterly financial report it plans to operate only 1 drilling rig in Permian Basin for the remainder of 2020 with plans to drill 12 to 20 wells compared to 118 wells during the first six months of 2020. Bloomberg said Oxy’s announcement illustrates “the scale of the shale industry’s pullback and the company’s debt woes.” And in a strategic shift, according to Bloomberg, Oxy will look for joint ventures in its core acreage in Permian to save capital costs.
Oxy’s oil production in 2020Q2 declined about 9 percent, and its fullyear production guidance was lowered about 4 percent with annual capital budget lowered to $2.5 billion. For 2020Q2 Oxy’s total production volume of 1.406 million boed (exceeded midpoint of guidance by 36,000 boed) was boosted by output from Permian Basin, which produced 465,000 boed to exceed highend of guidance by 5 percent.