(Reuters) -ConocoPhillips on Wednesday raised its share buyback plans by $1 billion and forecast higher savings from its deal to buy Permian basin-focused Concho Resources.
The top U.S. independent producer’s outlook comes as prices for globally-traded Brent crude trades around $75, 45% higher than at the start of the year, as economies recover from a pandemic-driven slump.
Meanwhile, the increase in its planned share repurchases for the year is line with the company’s push to meet its promise of returning 30% of cash from operations to shareholders via buybacks and dividends.
The raise would bring total planned distributions for the year to about $6 billion, ConocoPhillips said. It had resumed its share repurchase program of $1.5 billion annually in March.
The company, which bought Concho for about $10 billion in January, said it expects to save about $1 billion annually from the deal, compared with its previous forecast of $750 million.
ConocoPhillips also cut its 2021 capital expenditures by $200 million from its prior forecast of $5.5 billion and said it expects adjusted operating costs to be $100 million lower at $6.1 billion, citing “stronger-than-projected business execution.”
The company said it expects capital expenditure to average about $7 billion annually for the next 10 years, with about 3% compounded annual production growth.
It hopes to return more than $65 billion to shareholders from 2022 to 2031, with the amount fully funded from cash from operations.
ConocoPhillips had posted a $2.7 billion loss last year, joining global oil majors such as BP, Chevron and Exxon Mobil in posting multi-billion dollar annual losses on pandemic-related price declines and assets writedowns.
Reporting by Arathy S Nair in Bengaluru; Editing by Saumyadeb Chakrabarty and Arun Koyyur
