DOW JONES NEWSWIRES HOUSTON -(Dow Jones)- Occidental Petroleum Corp. (OXY) said Wednesday it is raising its 2012 capital spending by 10% to $8.3 billion, as it ramps up spending in the highly profitable U.S. oil patch. About $500 million of the approximately $800 million increase will be invested in U.S. resources, which reached a production record in the fourth quarter, said President and Chief Executive Stephen Chazen during a conference call with investors. The increase could help U.S. oil and gas production grow by 8% to 10% in 2012, he added. Chazen also said the company, which raised its dividend in 2011, is expected to disclose "a further dividend increase" after its board of directors meets in the second week of February. Occidental, though, is cutting back on its pure natural-gas drilling due to "horrible" prices for natural gas, which is trading below $2.50 per million British thermal units, said Chazen. Most of the company's natural-gas production, however, is associated with very profitable oil output and is impossible to pare down, Chazen said. The current natural-gas price is "not sustainable," Chazen said, adding that sustainability will come from an eventual rebound of the U.S. economy or a big drop in production costs. The current price is "significantly below any replacement cost," he said. -By Angel Gonzalez, Dow Jones Newswires; 713-547-9214;angel.gonzalez@dowjones.com
