ConocoPhillips Lifts Planned 2021 Share Repurchases by $1 Billion
June 30 2021 - 9:18AM
Dow Jones News
By Robb M. Stewart
ConocoPhillips boosted its planned share buybacks in 2021 by $1
billion in the expectation of greater savings and benefits from its
recently-completed takeover of shale rival Concho Resources
Inc.
Ahead of a market update Wednesday in which the energy company
said it would affirm its commitment to a disciplined,
returns-focused strategy, it said the increase in planned share
repurchases would bring total planned distributions for the year to
about $6 billion, or 7% of ConocoPhillips's current market
capitalization.
The company in March resumed share buybacks at an annualized
level of $1.5 billion, a 50% increase on repurchases underway in
the final quarter of 2020 when the program was suspended due to the
Concho acquisition. ConocoPhillips closed the $9.7 billion
acquisition of Concho in mid-January, greatly expanding its
footprint in the Permian Basin of Texas and New Mexico, the hottest
oil field in the U.S.
ConocoPhillips said it was raising anticipated Concho
transaction-related synergies and savings to $1 billion annually.
At the same time, it said it would reduce capital spending in 2021
and adjusted operating cost guidance by $200 million and $100
million, due to "stronger-than-expected business execution."
Capital expenditure is expected to average about $7 billion
annually, resulting in roughly 3% compounded annual production
growth at an average reinvestment rate of about 50%, it said.
ConocoPhillips said its return on capital employed is projected
to grow 1 to 2 percentage points annually, with balance sheet
strength further improving throughout 2022-2031 plan period.
Write to Robb M. Stewart at robb.stewart@wsj.com
(END) Dow Jones Newswires
June 30, 2021 09:04 ET (13:04 GMT)
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