Occidental Petroleum Corp. on May 10 surpassed Wall Street expectations by reporting a smaller first-quarter loss than a year ago, boosted by earnings from chemicals and oil exports.

The company benefited from a rebound in oil prices, up about 23% during the first quarter, as fuel demand recovered after being decimated last year by lockdowns to curb the spread of COVID-19.

The Houston-based oil and gas producer reported an adjusted loss of $136 million, or 15 cents per share, for the March quarter, compared with a loss of $467 million, or 52 cents per share, in the first quarter of 2020.

Analysts had expected a loss of 33 cents per share, according to Refinitiv.

Improved operating results in chemicals and marketing were overshadowed by costs relating to a dispute over Ecuador’s seizure of an Occidental oil field in 2006. Occidental, which plans to appeal, recorded a $403 million after-tax loss contingency to cover an arbitration judgment against it.

Occidental has struggled to pay down debt amassed in its $38 billion acquisition of Anadarko Petroleum in 2019. It has sharply cut spending on production and put several assets on the market to generate cash.

“Occidental is well positioned to continue to use excess cash flows, coupled with asset sales proceeds, to reduce debt,” CEO Vicki Hollub said.

Its oil and gas business lost $62 million for the quarter compared with a pre-tax gain of $179 million the year before.

Chemicals posted income of $251 million, down from $186 million the year prior. Stronger pricing was partially offset by storm interruptions and cost rises, the company said.

Midstream and marketing income was $282 million, compared with last year’s $1.3 billion loss on impairment charges. The business handles its crude oil exports.

The company will hold a call with analysts on May 11.

Editor’s note: This story was updated at 4:30 a.m. CT May 11.

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