Shareholders of U.S and Canadian oil and gas producers continue to benefit from record levels of free cash flow across the upstream sector.
Evaluate Energy’s latest cash flow report shows that 82 North American E&Ps allocated around 27 per cent of all cash used in Q1 to pay dividends or buy back shares. This is a meaningful uptick in total dollar terms and in proportion to other uses of cash.
“Repaying debt was initially a key priority for many North American oil producers as they restored operations impacted by the pandemic,” said Mark Young, report author and senior analyst at Evaluate Energy. “Since the start of Q4 last year, however, this focus has shifted towards shareholder returns via dividend payments and share buybacks.
“Dividend payments and share repurchases saw very slight increases over Q4 spending but rank far higher than anything before then. Q1’s $11 billion on dividends and buybacks is a greater outlay than every quarter in 2020 combined.”
Much like capital spending increases in recent months, these latest increases in shareholder returns are being seen across the industry, with no distinct peer group of companies solely responsible.
“Thirty-four companies, or 41 per cent of our full group of 82, paid dividends to common shareholders in Q1 2022. This is a record for the study period,” said Young. “49 per cent made a net repurchase of shares in Q1 2022, which was also a record.”
For more information on dividends and buybacks for oil, gas and oilsands producers in the U.S. and Canada, download Evaluate Energy’s latest cash flow report.