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Feb 11 (Reuters) - Occidental Corp said on Tuesday it expects to record about $1.7 billion in impairment and other charges in the fourth quarter, related to the sale of its stake in gas pipeline operator Western Midstream Partners LP and costs from its Anadarko Petroleum purchase.
The oil and gas producer said in early January that it would cut its majority stake in pipeline operator Western Midstream to less than 50% in 2020, as it seeks to reduce its debt that ballooned with the Anadarko deal.
Occidental also said last month that it had started laying off workers in a new cost-cutting move after having already dismissed staff “significantly” through voluntary programs.
The company has been selling assets and cutting costs since it outbid Chevron Corp for Anadarko, quadrupling its debt to $40 billion.
Occidental said its fourth-quarter results will include about $1 billion in charges related to the Western Midstream stake sale and $655 million related to severance, integration and other costs stemming from the Anadarko deal.
The charges are expected to be offset partly by a $475 million gain from the formation of a U.S. shale drilling joint venture with Colombia’s state-run oil company Ecopetrol SA and a $84 million gain on derivatives.
Occidental also expects to report production from continuing operations of 1.402 million barrels of oil equivalent per day for the fourth quarter of 2019. (bit.ly/3btH5HT)
The company maintained its annual production growth forecast at 2% for 2020 but reduced the capital budget to between $5.2 billion and $5.4 billion, $100 million below its earlier forecast.
Occidental shares were up about 4% in pre-market trading to $42.10. The stock has declined 31% since Occidental’s interest in Anadarko became known. (Reporting by Shanti S Nair and Shariq Khan in Bengaluru; Editing by Sriraj Kalluvila and Subhranshu Sahu)
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