(Reuters) - Occidental Petroleum Corp (OXY.N) shares rose more than 2 percent on Tuesday as the fourth-largest U.S. oil company spelled out some of the early results of its cost-cutting efforts.
“With regards to the reduction in our cash operating costs, we are running well ahead of plan,” said one slide accompanying a presentation by Chief Executive Stephen Chazen on Tuesday. “This should be noticeable in our 4Q12 results and become very visible in 1Q13.”
Chazen began talking aggressively about costs in October alongside the company’s third-quarter results.
According to the slide for the Goldman Sachs Global Energy Conference, Oxy would achieve $300 million in cash operating cost cuts this year and up to $450 million in actual savings compared with 2012. Savings stem from reductions in uneconomic down-hole maintenance and the cost of surface operations, among other things.
Chazen also laid out a goal to reduce U.S. drilling costs by 15 percent in 2013 compared with last year and the slide said it was already about half-way there. The average number of U.S. rigs deployed would fall to 55 this year from 64 last year, although production of oil would continue to increase, it said.
Occidental shares were up 2.5 percent at $81.90 in midday trading on the New York Stock Exchange.
Reporting by Braden Reddall in San Francisco. Editing by Andre Grenon