FILE PHOTO: A 3D printed natural gas pipeline is placed in front of displayed Chevron logo in this illustration taken February 8, 2022. REUTERS/Dado Ruvic/Illustration
March 1, 2022
(Reuters) -Chevron Corp on Tuesday raised its share buyback and forecast for operating cash flow through 2026, benefiting from cost cuts and a recent surge in energy prices.
The second-largest U.S. oil producer now expects to buy back between $5 billion and $10 billion of its shares every year, compared with its previous target of between $3 billion and $5 billion.
Major oil companies are responding to a jump in profits this year from higher oil and gas prices by giving back more cash to shareholders, many of whom have been frustrated by years of low returns.
So far, most shale operators have signaled they plan to put capital returns above output growth, even as U.S. oil prices crossed $100 per barrel earlier this week.
“We’re aiming to grow cash flow and return more of it to shareholders, leveraging our strengths to deliver lower carbon energy to a growing world,” Chevron Chief Executive Mike Wirth said in a statement.
Chevron also maintained its prior forecast for annual upstream spending at between $15 billion and $17 billion through 2026 and is expecting to cut operating expenses per barrel by more than 10% from last year’s levels.
The company’s shares rose 1.7% to $146.49 in premarket trading.
Chevron, which on Monday announced a $3 billion purchase of biodiesel maker Renewable Energy Group Inc, also reaffirmed its targets for lowering carbon intensity of its operations and growing new energy businesses.
(Reporting by Shariq Khan; Editing by Krishna Chandra Eluri and Anil D’Silva)