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Pioneer Natural Resources became the latest oil major to report bumper profits for the third quarter, exceeding analyst expectations.
The result was made possible by stronger oil prices, with Pioneer enjoying an average price per barrel of $94.23 during the reporting period, the company said in a news release. The average price for gas was $7.57 per thousand cubic feet.
The results will help Pioneer implement its plan to return a total of $7.5 billion to shareholders in the form of dividends and stock repurchases.
This strong financial performance by the oil industry earlier this year prompted governments in Europe and the Biden administration to call for—and nearly everywhere approve—windfall taxes.
The basis for the levies was the argument that oil and gas companies were benefiting from a crisis that was hurting everyone else and they had to be forced to contribute to aid measures.
“It’s definitely awkward,” Abhi Rajendran, a research scholar at Columbia University’s Center on Global Energy Policy, told Bloomberg earlier this week in comments on the expected third-quarter performance of Big Oil.
“These companies won’t want to be beating their chest over strong business results that are coming at the expense of consumers and a difficult economic environment.”
Instead of beating their chest, companies seem to be making plans for more cash returns to shareholders.
“To further enhance our top-tier free cash flow generation and return of capital, we have increased the return thresholds for wells to be included in our future development programs, which is expected to improve our program well productivity in 2023 and subsequent years, surpassing 2021 productivity levels,” Pioneer chief executive Scott Sheffield said in the news release on the company’s third-quarter results.
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com