Unocal earnings drop despite higher production
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Alaska operations contributed $17 million in profits
Allen Baker PNA Contributing Writer
Unocal Corp. earnings dipped 46 percent for the third quarter to $102 million as prices weakened and the company poured more money into its infrastructure. The company made $190 million a year ago.
But the company, based in El Segundo, Calif., boosted capital spending significantly in the quarter. Unocal put $437 million into exploration and other improvements in its operations, compared with $314 million spent in that area a year earlier.
And production volumes were up. Worldwide production averaged 506,000 barrels of oil equivalent daily, up 8 percent from 470,000 a year earlier.
The figure was down from the second quarter’s 516,000 barrels daily. And the net result for the third period was nowhere near the second quarter’s $247 million in after-tax profits.
The decline came as petroleum prices dropped sharply. Unocal’s average price for liquids was $22.37 per barrel, down from $27.45 a year ago. Natural gas brought $2.85 per thousand cubic feet, down from $3.60 in the year-ago quarter and $4.62 in the second quarter of this year.
Revenues from continuing operations were $1.58 billion in the quarter, down 37 percent from the 2000 period. Reduced crude oil trading made up part of the difference, with the lower prices also contributing.
Unocal’s Alaska operations contributed $17 million in profits, down from $22 million in the year-ago quarter, which included operations at the Nikiski fertilizer plant sold to Agrium Inc. in September 2000.
Alaska gas production down Alaska’s liquids production held fairly steady at 26,000 barrels daily. The figure was 25,000 a year ago and 24,000 in the second quarter.
Gas production slid, however, to 83 million cubic feet a day from 93 million in the second quarter and 128 million a year ago. Unocal did get a price increase on the gas, however, receiving $1.57 per thousand cubic feet instead of the $1.20 of other recent quarters.
The company predicts profits will continue to slide in the fourth quarter, with an estimate of 25 to 35 cents per share, compared with the third quarter’s 52 cents before adjustments.
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