Key Takeaways:
The Italian oil major raised its production outlook and expanded shareholder returns after second-quarter earnings surged on higher output and elevated crude prices tied to the Middle East conflict.
Eni lifted its full-year production growth target to about 5 percent and increased its planned 2026 share buyback to €3.4 billion after second-quarter adjusted net profit more than doubled to €2.3 billion, driven by 11 percent underlying production growth and higher oil realizations amid the Middle East conflict.
"Eni's integrated model is delivering across the board, with upstream volumes growing at the fastest pace in years while our transition businesses are becoming self-sustaining," Claudio Descalzi, chief executive officer of Eni, said in the earnings statement.
Adjusted EBIT more than doubled year over year to €5.38 billion, with the upstream division contributing €4.77 billion. Cash flow before working capital reached €4.47 billion, comfortably covering €1.84 billion in capital spending and €1.35 billion returned to shareholders through dividends and buybacks during the quarter. The company reaffirmed its planned dividend of €1.10 per share and said an extraordinary payout could be considered later this year if refining margins remain well above budget assumptions.
The improved cash generation gives Eni firepower to simultaneously invest in new oil and gas projects — including final investment decisions for developments offshore Ivory Coast, Angola and Cyprus — while expanding its transition businesses and entering critical minerals, a balancing act that few European majors have managed at this scale.
Underlying hydrocarbon production rose 11 percent year over year to 1.79 million barrels of oil equivalent per day in the second quarter, excluding price effects, pushing Eni to raise its full-year growth forecast to roughly 5 percent from a prior range of 3 percent to 4 percent. The increase marks the strongest production expansion among European oil majors this reporting season, according to company filings.
The elevated crude price environment — Brent averaged above $80 a barrel in the second quarter as the Middle East conflict disrupted supply routes — provided a tailwind that amplified the volume-driven gains. Eni's upstream adjusted EBIT of €4.77 billion reflected both higher output and continued cost discipline, the company said.
Strategically, Eni continued reshaping its portfolio during the quarter. It established the Searah joint venture with Petronas, creating a regional platform spanning Indonesia and Malaysia that will develop major gas discoveries in the Kutei Basin. The company also approved final investment decisions for the Baleine Phase 3 development offshore Ivory Coast, the Greater PAJ project offshore Angola and the Cronos gas project offshore Cyprus.
On the transition front, Eni entered the critical minerals sector through investments in graphite and lithium projects in Canada and Chile, signed an agreement with Mercuria to create a global commodities trading joint venture, and advanced plans to partially deconsolidate renewable energy business Plenitude while retaining a 65 percent stake. Enilive and Plenitude together generated €1.1 billion in adjusted EBITDA during the first half of the year.
The last time Eni raised its buyback program midyear was in 2023, when it increased the repurchase plan to €2.2 billion after a similar period of strong cash generation. The current €3.4 billion program — up from a previously revised €2.8 billion — represents roughly 4 percent of the company's market capitalization, based on recent trading levels.
This article is for informational purposes only and does not constitute investment advice.
