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Occidental Petroleum (Oxy) has something to both cheer and cry about this week after a 70% drop in second quarter profits was followed with the announcement that the company had made a “significant” discovery of oil and gas reserves in Kern County, California.
The California-based oil producer said profits had dropped from a US$2.3 billion in the second quarter of 2008 to $682 million for the same period this year.
The drop in both price and demand for hydrocarbons also played a part as sales also fell from $7.11 billion to $3.69 billion.
In regards to the discovery Oxy believes there are between 150 million and 250 million gross barrels of oil equivalent (BOE) reserves within the outlined area where it has drilled six wells to date to delineate the discovery.
Occidental’s interest in the discovery area is approximately 80%. Approximately two-thirds of the discovery is believed to be natural gas.
“We believe this to be the largest new oil and gas discovery made in California in more than 35 years,” Dr. Ray R. Irani, Oxy’s chairman and CEO said.
