Occidental Petroleum reported Q1 2011 results, daily oil and gas production volumes averaged 730,000 boepd, up 4% over Q1 2010 production of 701,000 boepd. This is primarily due to domestic gas and NGL production and Middle East/North Africa. The domestic gas increase was from the new acquisition in South Texas, which closed in the first quarter of 2011. The Middle East/North Africa increase included new production from Iraq and higher volumes from the Mukhaizna field in Oman.
The company’s sales volume (728,000 boepd), which is higher than initial guidance of 725,000 boepd differ from production volumes due to the timings of liftings principally caused by Iraq where liftings are expected later half of 2011. The company’s Iraq production was lower by about 9,000 boepd due to less than planned spending levels as we are in the startup phases of operations. Inclement weather, mainly in Texas, caused an additional reduction of about 7,000 boepd.
These reductions were offset by less-than-expected production loss from the Elk Hills maintenance shutdown and operational enhancements, providing higher-than-expected production in Colombia, Yemen and Qatar as well as the new assets resulting in production of 730,000 boepd.
The production guidance we gave you in last quarter's conference call of 740,000 to 750,000 BOE a day was at an $85 average price assumption. The actual first-quarter oil price reduced our production volumes by about 10,000 BOE per day including 1000 BOE a day at THUMS and Long Beach in California.
Expected 2Q 2011 exploration expense to be about $85 mm for seismic and drilling operations.
Domestic volumes are expected to increase to about 425 mboepd, compared with 1Q 2011 production of 404 mboepd
During 2Q11, the company will make a payment of about $500 million in connection with the signing of the Shah Field Development Project
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