Eni Raises Buyback Plan for 2024 to $2.2 Billion

Eni Raises Buyback Plan for 2024 to $2.2 Billion
The new plan is below last year's $2.4 billion final repurchase package, as net profit for the first nine months of 2024 fell 48 percent year-on-year.
Image by Alexei Belozersky via iStock

Eni SpA has further increased its projected share redemption spending this year from EUR 1.6 billion ($1.7 billion) to EUR 2 billion ($2.2 billion), which is over 80 percent higher than the original plan.

The new plan is below last year’s EUR 2.2 billion ($2.4 billion) final repurchase package — completed March 2024 according to Eni — as net profit for the first nine months of 2024 fell 48 percent year-on-year. The new plan is also well below the limit of EUR 3.5 billion ($3.8 billion) specified by the company when it announced the 2024 plan on April 24.

Eni has bought about 62.8 million shares for EUR 896.9 million ($967.6 million) as of October 18 under the 2024 plan, according to the company’s investor webpage.

For the third quarter, Eni reported EUR 522 million ($563.2 million) in net profit attributable to shareholders, down 73 percent compared to the same three-month period 2023 as lower realized prices offset higher oil and gas production. Per share, that is EUR 0.16 ($0.17).

Eni produced 1.7 million barrels of oil equivalent a day (MMboed) in the July–September period, up two percent year-over-year. Liquid output averaged 775,000 barrels per day while natural gas totaled 4.6 billion cubic feet per day.

“The increase was driven by the Neptune acquisition (about 120 kboe/d) and continuing production ramp-ups at the Baleine project in Côte d'Ivoire and the Coral project in Mozambique as well as higher volumes in Indonesia and Libya”, Eni said in its quarterly report. “Those additions were partly offset by mature fields decline and divestments”.

On January 31, 2024, Eni announced the completion of a transaction that saw Neptune Energy Group Ltd.’s assets in Norway go to Eni’s majority-owned Var Energi ASA and the remaining ones except those in Germany to Eni.

However, third-quarter production saw a three percent sequential decline “due to the impact of maintenance on a larger North Sea base, hurricane effects in the GoM [Gulf of Mexico], divestments and lower activity in Libya”.

Eni’s average realized price for liquids stood at $73.88 per boe while gas’ realizations averaged $7.34 per thousand cubic feet.

“Liquids price realizations trended broadly in line with benchmarks”, Eni said. “Natural gas price realizations reflected the price exposure of the production portfolio, where about 32 percent of volumes is indexed to the price of crude oil, higher than the share of production linked to European hub pricing (18 percent). The remainder of E&P [exploration and production] produced gas volumes is sold at fixed prices”.

In the power segment, Eni grew its installed generation capacity from renewable energy by 24 percent year-on-year to 3.1 gigawatts in the third quarter.

Eni posted EUR 3.4 billion ($3.7 billion) in adjusted earnings before interests and taxes, down 14 percent compared to the 2023 third quarter.

Cash flow from operations (CFFO) before changes in working capital at replacement cost totaled EUR 2.9 billion ($3.1 billion), down 14 percent year-on-year. Free cash flow stood at EUR 1.1 billion ($1.2 billion).

Eni had current assets of EUR 41.6 billion ($44.9 billion) as of the end of the third quarter while its current liabilities stood at EUR 32.8 billion ($35.4 billion).

Eni said it expects full-year hydrocarbon production to average around 1.7 MMboed assuming an average Brent price of $83 per barrel.

On October 3 Eni announced the completion of the merger of its upstream oil and gas business in the United Kingdom with Ithaca Energy PLC. Basing on the figures of the merger parties in 2023, the companies expect the resulting entity to produce over 100,000 boed.

“Accounting for a revised Brent scenario of 83 $/bbl (as well as other variables (weaker USD, SERM, etc.) the management is now expecting the FY Group proforma adjusted EBIT and the adjusted CFFO before working capital at €14 bln [15.1 billion] and €13.5 bln [$14.6 billion], respectively”, Eni said.

To contact the author, email jov.onsat@rigzone.com


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