Occidental Petroleum (NYSE: OXY) reported Q4 EPS of $0.72, $0.18 worse than the analyst estimate of $0.90. Revenue for the quarter came in at $4.31 billion versus the consensus estimate of $4.37 billion.

“During the fourth quarter, we completed the spin-off of California Resources, sold our interests in the BridgeTex Pipeline and monetized a portion of our investment in Plains GP Holdings, L.P. As a result of these transactions along with our operating cash flows, our year-end 2014 cash balance of $7.8 billion exceeded our debt and our debt to capitalization ratio was 16 percent,” said Stephen I. Chazen, President and Chief Executive Officer.

“Our domestic oil production increased 19,000 barrels per day from the fourth quarter of 2013 supported by a 42-percent growth in oil production from our Permian Resources business. In the United States, proved reserve additions from all sources were 308 million barrels of oil equivalent (BOE), compared to production of 116 million BOE, for a production replacement ratio of 266 percent. Companywide, we had proved reserve additions from all sources of 380 million BOE, compared to production of 218 million BOE, for a production replacement ratio of 174 percent. The success of our 2014 capital program should result in Occidental attaining production growth of 6 to 10 percent for the full year 2015, with the Al Hosn Gas Project expected to average 50,000 BOE per day. Domestic production is expected to be relatively flat on a BOE basis, with gas production expected to decline and oil production to increase around 6 percent.

“Although we have a large inventory of opportunities as well as the financial capacity to spend more capital, we think it is imprudent to accelerate some of these opportunities in the current low product price environment. We are focused on reducing our costs, which includes renegotiating our supplier contracts that are not reflective of weaker oil prices. These efforts should result in a reduction in the cost of executing our capital program, as well as reducing our operating expenses.

“Our capital program will focus on our core assets in the Permian Basin and parts of the Middle East. We have minimized our development activities in the Williston Basin, domestic gas properties, Bahrain, and the Joslyn oil sands project, as these have subpar returns in this current product price environment.

“Occidental expects to reduce its total 2015 capital spending by 33 percent to $5.8 billion from $8.7 billion spent in 2014. Oil and gas capital spending is expected to be approximately $4.5 billion this year. As a result of a thorough portfolio review, we reduced the carrying values of the assets in the areas where we are minimizing development activity, which resulted in an after-tax charge of $5.1 billion.”

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