(Bloomberg) -- ConocoPhillips resumed its share buyback program as this year's rally in crude prices puts the oil industry on a better financial footing to return more cash to investors.
The U.S. company is buying back stock at an annualized rate of $1.5 billion, it said Tuesday in a statement. That's an increase of 50% compared with the pace of repurchases in the fourth quarter, the point at which the program was suspended in the wake of Conoco's acquisition of rival producer Concho Resources Inc. The shares rose 1.5% in pre-market trading in New York.
Combined with its dividend, Conoco said the buybacks reflect its target of returning in excess of 30% of cash from operations to shareholders each year. The company also said that, despite a better outlook for oil prices, it doesn't plan to increase operating capital spending.
“It's still early in the new year, but commodity prices have strengthened such that our dividend alone may not be sufficient to meet our return of capital commitment,” Chief Executive Officer Ryan Lance said in the statement. “We will monitor the environment closely and retain the discretion to adjust our share repurchase program, as appropriate.”
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