PRODUCTION GROWING, DIVIDEND CONFIRMED
PIAZZA AFFARI PROMOTES ENI AFTER A FIREY YEAR
It has been a difficult year for theEni, marked by the collapse in crude oil prices, by the difficult separation from Saipem and the chemical dossier. But in the end, he says the to Claudio Descalzi, the six-legged dog has emerged leaner and less indebted, well positioned to weather a market downturn.” "Eni, increasingly focused on Oil & Gas - he continues - is now organized to compete in a market with low energy prices".
The numbers confirm the optimism of the manager's will.
1 - La daily production was higher than estimates with a growth of 14% in the fourth quarter with a plateau of 1,88 million barrels per day (the highest in the last 5 years) and 10% in 2015, against the initial target of 5%. to 1,76 million. The new resources added during the year amount to 1,4 billion barrels (against 0,5 billion of the initial target), at a unit cost of 0,7 dollars, also thanks to the discovery of the Zohr supergiant offshore Egypt. Descalzi ensured that the company of the six-legged dog this year will maintain "the production levels of 2015, excluding one-off contributions".
2 – The deconsolidation of Saipem, which brought net revenues of 4,8 billion to Eni's coffers, combined with the results of the expenditure rationalization plan, made it possible to achieve the target of a debt, albeit rising by 3,18 billion, well below expectations to 16,86 billion.
3 – The strategy to counter the effects of weak oil proved effective: investments were cut by 17%, but this year the capex reduction will be 20% "These actions will have an overall limited impact on short and medium-term production growth plans", specified the CEO, recalling that in the scenario of 50 dollars a barrel, technical investments will be financed 100% with operating cash flow. While the operating costs per barrel, continued Descalzi, "are expected to decrease by 11% compared to 2015".
4 – Last but not least, the group has kept its promises regarding the dividend: 0,80 euro (half already distributed with the advance coupon for September) with a dividend yield of 6,7%.
These data explain the reaction, mysterious at first sight, of the MY BAG. How is it possible that the financial markets reward a balance sheet that closes with a net loss of 8,82 billion with a sharp rise? In the fourth quarter of 2015 alone, the one that saw the sharpest drop in oil prices, Eni recorded a loss of 8,46 billion (which decreases to 0,20 billion if we consider the adjusted net result on a standalone basis halo)? It is possible, given the coupon, the upswing in finances and the credibility of the company business plan, based on the integral transformation into an oil & gas company (for which a share in Verdalis will be sold when possible).
Last but not least, the reputation it enjoys counts the six-legged dog which announced today that it has successfully drilled a new well in the Nile Delta, after yesterday receiving approval from the government of Mozambique for the development plan for the Coral discovery, offshore territorial waters. Libya is also doing better. Descalzi spoke of "positive progress". "The plants - he added - have not been touched, colleagues continue to work".
The market believes in it, as demonstrated by the blessing of analysts. The first report was published by Société Générale: Buy recommendation, target price at 15 euros. Ubs and Goldman Sachs also confirmed the Buy recommendation and the target price of 15,50 euros, appreciating the very positive data on the upstream. More generous Bernstein: Outperform rating, target price of 17,50 euros.
