Saudi Arabian state oil producer Aramco beat forecasts on Nov. 1 with a 39% jump in third-quarter net income and reported record free cash flows, joining rivals in benefiting from higher prices and robust demand.
Aramco's net income rose to $42.4 billion for the three months to Sept. 30 from $30.4 billion a year earlier, it said in a regulatory filing. That was just above the median forecast of $41.7 billion from 16 analysts.
"Aramco's strong earnings and record free cash flow in the third quarter reinforce our proven ability to generate significant value through our low cost, lower-carbon intensity upstream production and strategically integrated upstream and downstream businesses," CEO Amin Nasser said.
The company's free cash flow rose to $45 billion from $28.7 billion a year-earlier. It declared a dividend of $18.8 billion in the third quarter, meeting its own target, which will be paid in the fourth quarter.
"Given this lengthy period with elevated crude prices, which feed into solid cash flow performances as well as deleveraging of Aramco’s balance sheet, we are of the view that dividends will ultimately be increased," said Yousef Husseini, associate director for equity research at EFG Hermes.
Aramco joins oil majors Exxon Mobil Corp., Chevron and BP that have reported strong or record breaking results recently, benefiting from surging crude and natural gas prices that have boosted inflation around the world and led to fresh calls to further tax the sector.
"While global crude prices during this period were affected by continued economic uncertainty, our long-term view is that oil demand will continue to grow for the rest of the decade given the world's need for more affordable and reliable energy," Nasser said.
Aramco's reported net income, while higher year on year, was slightly lower than its record second quarter.
Net income was also partially offset by increased production royalties, resulting from stronger crude oil prices and higher sales volume.
Royalties and other taxes more than doubled year-on-year in the third quarter to $24.3 billion, from $10.48 billion last year.
Recommended Reading
E&Ps Pivot from the Pricey Permian
2025-02-01 - SM Energy, Ovintiv and Devon Energy were rumored to be hunting for Permian M&A—but they ultimately inked deals in cheaper basins. Experts say it’s a trend to watch as producers shrug off high Permian prices for runway in the Williston, Eagle Ford, the Uinta and the Montney.
Tamboran, Falcon JV Plan Beetaloo Development Area of Up to 4.5MM Acres
2025-01-24 - A joint venture in the Beetalo Basin between Tamboran Resources Corp. and Falcon Oil & Gas could expand a strategic development spanning 4.52 million acres, Falcon said.
Blackstone Buys NatGas Plant in ‘Data Center Valley’ for $1B
2025-01-24 - Ares Management’s Potomac Energy Center, sited in Virginia near more than 130 data centers, is expected to see “significant further growth,” Blackstone Energy Transition Partners said.
Huddleston: Haynesville E&P Aethon Ready for LNG, AI and Even an IPO
2025-01-22 - Gordon Huddleston, president and partner of Aethon Energy, talks about well costs in the western Haynesville, prepping for LNG and AI power demand and the company’s readiness for an IPO— if the conditions are right.
Devon, BPX to End Legacy Eagle Ford JV After 15 Years
2025-02-18 - The move to dissolve the Devon-BPX joint venture ends a 15-year drilling partnership originally structured by Petrohawk and GeoSouthern, early trailblazers in the Eagle Ford Shale.
Comments
Add new comment
This conversation is moderated according to Hart Energy community rules. Please read the rules before joining the discussion. If you’re experiencing any technical problems, please contact our customer care team.