STORY CONTINUES BELOW THESE SALTWIRE VIDEOSHOUSTON - Top U.S. energy companies last year paid out more of their earnings to shareholders than they invested in new oil and gas fields for the first time, according to a report released on Tuesday.
The returns focus has lifted the energy sector to about 4.5% of the S&P 500's market valuation, a doubling of its weighting since 2020, but well below its 8% average. Combined profits of the group, which includes shale stars such as DiamondBack Energy, Pioneer Natural Resources, and ConocoPhillips, topped $333 billion last year, a third more than the $217 billion in 2014, when U.S. spot oil prices averaged $93 per barrel.
"We expect this will continue even in a high interest rate environment or a high oil price environment," said Bruce On, a principal in EY's strategy and transactions group. One new outlet for the cash is acquisitions, which have risen this year and could continue next, he said.