Conoco makes shareholders sweet $5 billion as profits soar According to Reuters

© Reuters. FILE PHOTO: The logo of ConocoPhillips is displayed on a screen on the floor at the New York Stock Exchange (NYSE) in New York, U.S., January 13, 2020. REUTERS / Brendan McDermid

(Reuters) – ConocoPhillips (NYSE:) on Thursday raised its shareholder payout target to 50% after America’s largest independent oil producer beat Wall Street earnings estimates on rising energy prices. .

Oil and gas prices have skyrocketed with Western sanctions on major producer Russia to limit energy supplies as demand recovers from pandemic lows. Crude oil is trading around 25% higher since the start of the year and has also benefited from strong prices as a result.

Shares fell a fraction, to $91.03, in early trading but are up about 26% so far.

Conoco said while inflation is raising costs, the year’s capital expenditure budget will be cut by about 1% due to output disruptions in Libya, and while inflation is increasing its costs, the budget Investment spending of the year will still be about 7.8 billion USD.

Executives must discuss the outcome in a conference call later today.

Houston, Texas-based ConocoPhillips said the average price received for a barrel of oil and gas rose 77 percent from a year earlier to $88.57. The company did not insure any of its oil and gas sales to take full advantage of higher market prices, it said.

Output of 1.69 million barrels of oil and gas per day (mboed) is in line with Wall Street estimates. The company forecasts production for the current quarter will be between 1.71 million and 1.76 mboed.

ConocoPhillips plans to return $15 billion to shareholders this year through dividends and share buybacks, joining Chevron Corp (NYSE:) and others in increasing payouts after years of pressuring manufacturers to curb spending and boost profits.

The company kept its spending forecast unchanged, having slightly downgraded its full-year production outlook due to instability in Libya. It expects production to average 1.74 mboed for the year.

The company’s second-quarter adjusted earnings were $3.91 per share, beating Wall Street estimates of $3.80 per share, according to Refintiv IBES data.

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