(Reuters) – Oil and gas producer EOG Resources Inc on Thursday boosted its annual dividend by 10% after its fourth-quarter adjusted profit rose over 60% from the third, helped by a recent recovery in commodity prices.
Easing of COVID-19 related restrictions has sparked optimism among shale producers after they endured a year of destruction in crude prices and demand. U.S. crude rose to $63.53 on Thursday, its highest since May 2019.
Despite the higher commodity prices, EOG forecast this year’s spending to be between $3.7 billion and $4.1 billion and will keep its output flat compared to the fourth-quarter rate of 801,500 barrels of oil-equivalent per day.
EOG’s forecast of keeping production and spending flat or lower matches rivals like Diamondback Energy Inc and Occidental Petroleum Corp and highlights a recurring theme in shale that calls for prioritizing balance sheet cleanups above output growth.
“The 2021 capital plan is consistent with the strategy we have followed over the last year of not growing production in an oversupplied market,” EOG Chief Executive Officer Bill Thomas said in a statement.
EOG said its dividend now stands at an indicated annual rate of $1.65.
The Houston-based company’s adjusted net income was $411 million, or 71 cents per share, for the quarter ended Dec. 31, compared with a profit of $252 million, or 43 cents per share, in the third quarter.
(Reporting by Rithika Krishna in Bengaluru; Editing by Shailesh Kuber)
