News: Shale producers see deep freeze hitting thousands of barrels of output.
(Reuters) – Permian-focused shale producers Diamondback Energy Inc, Cimarex Energy Co and Occidental Petroleum Corp announced Monday that their first quarter oil production would be hit by a recent winter storm that wrecked electricity for millions in Texas.
While natural gas producers have benefited from a freezing operation that forced wells to close, shale oil drills are on the losing side of the trade as frozen pipes and power disruptions are likely to slow any recovery in production.
Diamondback said the winter storm will cut total production worth four to five days from the current quarter’s earnings and drop its stocks 5.4% after the bell.
Occidental forecast Perm production of 450,000 to 460,000 barrels of oil equivalent per day (Boepd) for the first quarter, including a 25,000 Boepd hit due to downtime related to the storm.
The smaller rival Cimarex expects a decrease in production volume of up to 7% in the first quarter.
Diamondback’s adjusted earnings of 82 cents per share for the fourth quarter beat analysts’ average estimates by one cent, according to IBES data from Refinitiv, as commodity prices rebounded above pre-pandemic levels on vaccine hopes.
Reporting by Shariq Khan in Bengaluru; Adaptation by Maju Samuel
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