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 [7]). 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%...
[9]
And crude oil prices also began tyo fall as the production raise was leaked...
[10]
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 [11].
