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"Race To The Bottom" In Oil Continues: ENI (Europe's "Chevron") Halts Buyback, Raises Production, Slashes Capex
Oil prices legged lower in the last few minutes as Italy's largest energy company ENI has made a series of rather major announcements (following Chevron's decision in January). The company plans to sell EUR8bn in assets, slash capex by 17%, and suspends buybacks. But perhaps most worryingly for the oil-patch, ENI plans to increase production 3.5% each year until 2018 as the race to the bottom in energy markets continues.
- *ENI PLANS TO SELL $8BLN IN ASSETS OVER NEXT 4 YEARS
- *ENI WILL CUT CAPEX OVER NEXT 4 YEARS BY TOTAL OF 17%
- *ENI SAYS NEW PROJECTS AVERAGE BREAKEVEN AT $45/BBL (BRENT)
- *ENI SEES E&P PRODUCTION INCREASING 3.5% A YR IN 2015-2018
The buy-back plan is suspended. It will assess its reactivation when the strategic progress and the market scenario allow.
It appears the presentation was leaked early, which tumbled the shares and was halted... when it re-opened it was down over 6%...
And crude oil prices also began tyo fall as the production raise was leaked...
As Reuters reports,
Italy’s Eni cut its dividend and suspended a share buyback programme on Friday as part of moves to offset the slump in oil prices and fund growth in its core business of looking for oil and gas.
In the first major business plan of CEO Claudio Descalzi, Italy's biggest listed company said it would pay a 2015 dividend of 0.8 euros per share compared to the 1.12 euros per share it paid on 2014 results.
The state-controlled oil major said it would cut investments by 17 percent in the 2015-2018 period to around 48 billion euros ($50 billion) and sell assets worth 8 billion euros. At 1437 GMT Eni shares were down more than 6 percent.
The slump in oil prices since June is testing the ability of listed oil companies to support cash flows and has sparked a rush to cut costs across the sector.
Many big oil firms have announced cuts of 10 to 15 percent to their spending budgets and some have suspended share buybacks or revived dividend payment via company stock, known as scrip shares.
Eni, which is shifting its focus increasingly to upstream exploration and production activity, said it was targeting annual output growth of 3.5 percent, up from the 3 percent growth in its previous 2014-2017 plan.
ENI is currently Italy's largest industrial company with a market capitalization
The Italian government owns a 30.303% golden share in the company, 3.934% held through the state Treasury and 26.369% held through the Cassa Depositi e Prestiti.
Another 2.012% of the shares are held by People's Bank of China
And just as European stock valuations were getting absolutely idiotic.
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oil going to $30
There should be a decimal point in front of the 3.
Oil at $3 is bullish for miners! /sarc
halting buybacks is a bigger flag than most think. buybacks have been the foundation for the lies built on the "recovery". if they cant do that, well i am not sure what else they can do. corporate bond issuance? im sure the fed will buy trillions, right?
they can prop up stocks with nailguns and Nirp...
Hollow points, soft points or full metal jacket. Decisions, decisions, suicide is so complicated....
Then we will probably see the dollar index at 120 and gold at $900.
and not to mention a hard recession (as exports and capex collapse)
Yes, but think of all the assets you can buy overseas! oh wait
Everything can be counted now.
Simply "assign a number" (serialization)and even infinity can be conquered.
Once a "numbering system" is assigned to all things...everything can be counted and therefore "counts."
If this is a living thing it will give off a "signature" in effect "counting itself." (Heat, smell, touch, taste, etc)...
Now...not only can I construct a reality based PURELY on mathematics (rendering) I can also "confirm identity" (that my mathematical description matches what in fact is real)...if I have a "motion detector"....
BANG!
your dead.
Human race=pointless.
Because oil will be cheap?
<$10/barrel in <20 years.
Could be. And about 2 mllion barrels per day produced in the entire world.
Every dollar has a serial number.
If what is produced and then consumed gets big enough those values may fall thus causing those numbers to be capable of very precise measurement.
This is not an ESTIMATE either...but an actual number..."how many serialized paper thingy's in fact are in existence and circulating."
When it comes to dollars those numbers can in fact be shockingly small...making CREDIT very valuable.
Gold of course is of near infinite monetary value because there is such a small amount of it.
However since there is no way to guarantee the supply...
OT: My accountant said, I got some good news, and some bad news....good news is I can assure you your tax refund was not stolen!
Bad news is you aint getting one, and in fact owe some more mutherfuckin money! C'mon nickel gas!
https://www.dmr.nd.gov/oilgas/directorscut/directorscut-2015-03-12.pdf
always some interesting statistics on the Bakken
Most interesting. Big question: how different is Bakken from Eagle Ford/Permian, et. al.?
......the big difference ? The Bakken is 1600 miles from most of the refineries and you can read that as $12 a barrel less up here due to Buffets railroad;
The BNSF....given their proclivity for going off track and burning , around here that stands for BETTER NOT START a FAMILY.
Shouldn't bad news be good?
Sure, they "plan." But I'll take the under on whether ENI executes the "plan."
The dollarpetro must have been supporting oil.
Bitcoin is going up against other currencies.
Jed Clampett timed it right ... now it would be Bakersfield Hillbillies ...
Cut share buy backs. How dare they set this bad example. Look for more oil and gas. Why? It's already too cheap to make an outrageous profit. Because they are looking long term. Who does that anymore. We have to maximize the year-end bonus pool by any means possible.
Vlad said whomever's Western Unioning him 50 cents at a time, it's not funny.
this the same plan the parent Chevron announced. ramping up production, that phrase should get everyone's attention. of course crude can be stored, and with Russia acting funny, controllling the NG pipeline and such [the American neocons love to frighten the europeans into consent, and more importantly into electing hard right wing candidates. if you dont like socialist Europe you must be a neocon] and the election 2016 in America is shaping up as a battle of the neocons, neocon lite, is Hillary. capitalist localorie neocon is Kerry. [this is why Romney got out, hes not a member of the club] Bush et all are full blown drooling snarling neocons [or at least their operatives will be] Putin is off calculating a way to keep the bastards out, but both parties are NC so good luck with that Vlad. maybe China will pull the dollar peg, maybe they can feed some fires other places, like Africa. the neocons have no strategy for ISIS, or terrorism, they like regime change for its own sake. [hence the arab spring has been a real neocon bonanza, and bibi can actually walk onto the floor of the US congress stand behind an AIPAC sign, and ask for support, and much of it will get kicked back] if there is a war you should be buying the oil companies on the dip, because with crude this cheap, production ramping up, the dogs of war are getting ready. the MIC needs lots of the stuff
Hang on, I'm still trying to translate from Italiano. If it doesn't say "dolce", buon" "ciao" or "gniocchis", I need all the help I can get.
I'm curious how many petrodollars ENI makles for Italy's banks, and what the connection is with ECB.
Website: www.eni.com
http://www.eni.com/it_IT/attachments/media/comunicati-stampa/2015/03/Eni...
http://translate.google.com/translate?hl=en&sl=it&u=http://www.eni.com/i...
didnt read all that, but really, both US Chevron and ENI will stop spending money on stock buybacks, and increase production, somebody is bullish on the economy. the US is going full export model, while eastern europe may become a new manufacturing center (to replace China i suppose) this is what the battle for Ukraine is all about. maybe Cheneys NATO push was smarter than we thought. but then he has the CIA giving him the benefit of those long term studies. ah the Balkans, what a wonderful region.. first order of business is to settle the muslim problem, that includes Syria and Turkey. second order to divide up the cold war spoils. give Putin his share. Iran is a nonplayer. you can hear the wheels turning
Let me see if I have this straight...
ENI is going to cut CAPEX, sell assets AND raise production 3.5%/yr?
I guess the only quesion left is why didn't these geniuses produce more while spending less last year? Okay, one follow up question; or the year before that?