Occidental Petroleum more than doubles its quarterly profit

Occidental Petroleum Corp. said Thursday that it more than doubled its fourth-quarter profit in 2009 compared with the same period a year earlier, helped by higher output.

Analysts said it was a good way to end a year in which full-year net income was less than half of what it was in 2008, when oil soared above $147 a barrel.

Oil production grew by 7% in 2009, and Chief Executive Ray R. Irani predicted that 2010 would be a record year for Oxy. He said production hit 645,000 barrels a day in 2009, the Westwood company’s highest ever, and should grow by a similar amount this year.

“We continue to build our pipeline of exciting opportunities, which gives us confidence that our production increases from continuing operations of about 5% to 8% annually over the last five years will again be an achievable target for the next five years,” Irani said.

The prediction came on the heels of a deal to develop the 4-billion-barrel Zubair oil field in Iraq in a partnership with Italian energy giant Eni and the Korean Gas Corp.

Irani also cited cost-cutting at the company for softening market blows in 2009, a year in which oil prices ranged from around $40 a barrel to more than $80.

“It has an undeniably steady hand in management that has really proven itself over the years,” said James DiGeorgia, editor of investment newsletter Gold & Energy Advisor.

Analysts said Occidental also benefited from being an oil production company that doesn’t do any refining. The refinery industry struggled to make profits in 2009.

For the October-December period, Occidental posted net income of $938 million, or $1.15 a share, versus $443 million, or 55 cents, a year earlier.

For the year, Occidental reported a profit of $2.9 billion, or $3.58 a share, compared with $6.9 billion, or $8.34 a share, in 2008.

Occidental’s adjusted earnings were $1.30 a share, excluding $120 million in after-tax charges, which beat analysts’ expectations of $1.25 a share, according to a Thomson Reuters survey.

Revenue increased 13% to $4.54 billion for the quarter but fell 36% to $15.4 billion for the year.

Occidental’s stock rose $1.07 to $77.50 on Thursday.

“Oil prices were good in the fourth, and Occidental doesn’t have the exposure in the refinery industry that some other big oil companies have,” said Phil Weiss, a senior analyst at Argus Research. “This is their kind of environment.”

ConocoPhillips, for example, posted a fourth-quarter profit of $1.2 billion, but its refinery segment lost $215 million. Valero Energy, the nation’s biggest refiner, said Wednesday that it lost nearly $2 billion in 2009.

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