On Thursday, Occidental Petroleum Corporation reported its second quarter earnings and discussed the following topics in its earnings conference call. Take a look.
Permian Basin Production
Leo Mariani – RBC Capital Markets : Guys, just a quick question on your Permian basin production, looked like it was down a tiny bit in the second quarter just wanted to see if there is anything unusual in terms of interruptions or maybe just timing of completions there?
Stephen I. Chazen – President and CEO : Bill can answer that. Bill?
William E. Albrecht – VP; President, Americas, Oxy Oil and Gas : Leo, really it’s all around gas plants we had several significant gas plant turnarounds in the quarter as well as some third-party gas plant outages. We think most of these turnarounds are behind us for the rest of the year, but it was all attributable strictly to gas plants, both third-party and company operated.
Leo Mariani – RBC Capital Markets : You guys talked about going from 75 to 70 rigs and really deemphasizing NGLs and gas and adding some crude rigs can you just give us little bit more color in terms of where the rigs are going to be dropped and where you are going to add some on the crude side and as you reshuffle?
William E. Albrecht – VP; President, Americas, Oxy Oil and Gas : Not really but we talked about reducing our account in the Williston last quarter – in the Williston last quarter. That’s continuing there are some quite rigs nationally that we have that are less than the bottom eighth of efficiency, and so we’re basically releasing those rigs. We expect that with a higher concentration of better quality rigs and crews that we’ll do better in the quarter, and I expect that we’ll drill as many wells in the back half of the year as we did in the first half of the year with the fewer rigs. But the shift is – we’re not quite through shifting yet.
Leo Mariani – RBC Capital Markets : In terms of acquisitions, you guys talked about doing $1 billion kind of in the first half of the year, you guys there still continue to be very active on the acquisition side in the second half, and is there any type of certain area that you guys have focused on at all in there?
James M. Lienert – EVP and CFO : It looks pretty slow here in the third quarter, and we have very little if anything in the hopper in the third quarter, so I don’t expect to see much in the third quarter. There’s a fair bid ask spread, I think, right now between what we would be willing to pay and what somebody would be willing to accept, so we’re not in any hurry, we don’t really need to do anything. You shouldn’t expect to see any large scale M&A from us.
California Exploration
Arjun Murti – Goldman Sachs : Thanks. Steve, you did mention some bolt-on acreage acquisitions in the Williston, can you just talk about where your position is now? I know, you dropped some rigs, and I think, you’ve been less enthusiastic but where are you acreage-wise now in the Williston?
Stephen I. Chazen – President and CEO : I think we’re north of 300,000 acres.
Arjun Murti – Goldman Sachs : And with bolt-on…
Stephen I. Chazen – President and CEO : I don’t know exactly, because they never tell me this stuff.
Arjun Murti – Goldman Sachs : That’s great. So, given the update on California exploration, there’s something you highlighted a couple years ago, I know, there’s some small stuff and some bigger stuff, but where is that program now?
Stephen I. Chazen – President and CEO : It’s actually doing pretty well. We have, as you know, some moderate successes in some oil and we’ve got some things that are working. We’re a little bit off the mainstream, off the main plan that we had as far as where they are located. There is still some acreage to be acquired that other people have thought I just don’t want to go into the details. But I think it’s doing pretty well and we’re doing – we have some nice adds and a few million barrels a year, maybe 10 million, 12 million barrel adds.
Arjun Murti – Goldman Sachs : Then just lastly, I know you’ve started increasing the drilling in some of the Permian unconventional stuff. Any comments on how that’s going?
Stephen I. Chazen – President and CEO : Obviously, gassy NGL stuff while it’s maybe interesting at some point, not really exciting right now and a lot of these plays are towards the Mexico and people call them liquids-rich; I call them gas-rich. So, they are just not that exciting right now, but the oil stuff is doing pretty well and really we’re doing just fine and I can’t give – there is another area where there is some poor-performing rigs and crews that we’re going to upgrade the quality of that. So, my focus, as I said in the back half of the year, I think the production (wage) will be fine, maybe even more than fine in the back half of the year. So, I think we’ve got a pretty good sized backlog. But I’m really focused on improving the efficiency of the rigs and generating high – lowering the operating costs.
Arjun Murti – Goldman Sachs : That’s great and looking forward to seeing a new CFO at some point here. Congrats on that. Thank you.
Stephen I. Chazen – President and CEO : Thank you, Arjun. We should be pleased to hear that.
