U.S. Oil and Gas Producers Occidental Petroleum Corp and Devon Energy Corp blew past Wall Street’s profit expectations on Tuesday, as easing travel curbs and rising vaccinations boosted fuel demand and crude prices. Occidental Petroleum shares rose nearly 2% to $26.95 in extended trade, while Devon Energy Corp climbed 1.9% to $26.70.
After a crushing 2020, oil prices have rebounded to multi-year highs and are now trading at over $70 a barrel, thanks to output curbs by the OPEC+ and a pick-up in economic activity. Devon Energy Corp also announced a fixed-plus-variable dividend of 49 cents per share, 44% higher than last quarter’s payout, underscoring the energy industry’s focus on shareholder returns and overspending to expand production.
Peers Diamondback Energy Inc increased its annual dividend by 12.5% to $1.80 per share, and Pioneer Natural Resources Co declared an inaugural variable dividend of $1.51 per share on Monday. Occidental said its total production from continuing operations rose to 1.2 million barrels of oil equivalent per day, 7.7% higher sequentially.
The company’s average price for worldwide crude oil rose to $60.05 per barrel from $55.65 barrel in the prior quarter. The Oil and Gas Producers adjusted profit attributable to common stockholders stood at $311 million, or 32 cents per share, for the three months ended June 30. Analysts had estimated 3 cents per share. Devon Energy Corp posted core earnings of 60 cents per share, beating an estimate of 52 cents per share. Occidental’s worldwide net realized oil price was just over $60 in Q2 2021, up to $4.40 sequentially and nearly $25 above Q2 2020. Gas prices also showed tremendous year-over-year increases, as one might expect.