Huaxia Energy Network (**hxny3060) learned that recently, Occidental Petroleum (US:OXY) announced its 2023 financial report, and the company achieved a net profit of 46 for the whole yearUS$7.3 billion, a year-on-year decrease of 6465%；Operating income 283US$3.1 billion, a year-on-year decrease of 2185%。
At the beginning of February this year, Warren Buffett, known as the "God of Stocks", increased his position in the company through his Berkshire Hathaway company for three consecutive trading days, buying a total of 4.3 million shares of the company's common stock. After adding positions, Berkshire Hathaway holds a total of about 24.8 billion shares of Occidental Petroleum common stock, valued at approximately $14.1 billion.
However, in just half a month, Buffett was "slapped in the face" by the financial report released by Occidental Petroleum. Could it be that the "stock god" also has a time to look away?
In fact, in the first half of 2023, Occidental Petroleum profits have declined significantly. The main reason is that global oil prices fell by more than 30% during the period, but operating expenses continued to rise. According to the financial report, in the second quarter of last year, Occidental Petroleum's oil and gas revenue fell by 35% year-on-year80%, but operating expenses have risen by 1244%。
In the third quarter, the company's performance continued its downward trend. In the first three quarters of 2023, Occidental Petroleum's net profit decreased by 69% year-on-year25%, and operating income decreased by 25% year-on-year65%。
However, the obvious downward trend in performance still can't stop Buffett's determination to increase his position in Occidental Petroleum, and throughout 2023, Buffett has bought Occidental Petroleum shares a total of 8 times, with a total amount of $2.5 billion. Especially in the case of Occidental Petroleum's poor performance in the third quarter, Buffett continued to be optimistic, and carried out three blessings in October and December last year, with a cumulative investment of 11$3.8 billion to purchase 20.36 million shares.
On February 15 this year, Warren Buffett's Berkshire Hathaway announced its position report for the fourth quarter of last year, which showed that the company even bought 10 million shares of Apple in the fourth quarter, but instead increased its stake in Chevron and Occidental Petroleum.
Founded in 1920, Occidental Petroleum is an American multinational corporation with comprehensive oil monopoly headquarters in Los Angeles. It is mainly engaged in oil and gas, chemical products, coal and agriculture. In 2023, Occidental's global proven reserves increased to 4 billion barrels of equivalent from 3.8 billion barrels of equivalent in 2022. In addition, well productivity at its domestic (U.S.) assets hit an all-time high, beating the midpoint of the initial four-year production forecast of 4. per day30,000 pounds of production.
During the fourth-quarter 2023 earnings conference, Occidental Petroleum said it expects about 60 wells to come online in 2024, potentially adding about 4,000 barrels of new oil per day to production.
In addition, Occidental Petroleum is also one of the low-cost operators of shale oil companies in the United States, and is one of the better shale oil development companies, and at the end of 2023, Occidental Petroleum also announced the acquisition of Crown Rock for $12 billion to expand its control over the largest shale oil field in the United States.
Occidental Petroleum has said the acquisition of Crownrock would give the company access to significant potentially lucrative onshore oil resources in the Permian.
In this regard, Occidental Petroleum CEO Vicky Holub said that by the end of 2025, the oil market will face a shortage because the world will not be able to replenish the current reserves fast enough. Perhaps, betting on the future of the oil market is an important reason why Buffett continues to increase his position in Western Petroleum.
*Please indicate the source, article**: Huaxia Energy Network, **hxny3060).