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Thursday, October 19, 2006

Big Oil's Last Good Report? (OXY)(XOM)(CVX)(COP)

Occidental Petroleum posted strong earnings, with net income excluding charges and gains up 16% to $1.16 billion. Revenue rose 17% to $4.52 billion.

OXY said its results were based on a realized oil price of $60.52 a barrel in the most recent quarter compared to $55.97 in the same quarter a year ago. That opens the floor to questions.

Like many large companies in the oil and gas business, OXY's stock price has had a good run. Two years ago, it traded for $28.25. Its shares now trade above $46. Over the same period, its share price has even outperformed Exxon, Chevron, and Conoco. But, before concerns about falling oil prices hit the market over recent weeks, OXY's stock had hit $54.

That's $60.52. There's the number. It should be about the same for all of the big oils. Today the price per barrel is above $59. And, there is debate about whether it hits $50 before its rises back above $70.

The answer to that unanswerable question will determine whether the oil guys get to watch their stock prices rise back to their summer 2006 highs.

Douglas A. McIntyre can be reached at He does not own securities in companies that he writes about.

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