ENI NYSE: E reported sharply higher second-quarter and first-half results, citing upstream production growth, favorable market conditions and stronger contributions from its gas, low-carbon and refining-related businesses.
Chief Executive Officer Claudio Descalzi said second-quarter pro forma EBIT reached €5.4 billion and net income totaled €2.3 billion, with both figures doubling from a year earlier. Cash flow from operations rose more than 60% to €4.5 billion. For the first half, pro forma EBIT increased 40% year over year.
Descalzi said the company’s performance outpaced the increase in Brent crude prices and absorbed what he described as a highly unfavorable foreign-exchange environment. Reported gearing was stable from the prior quarter, while pro forma gearing declined to 10%, the lower end of ENI’s target range.
Production growth and project pipeline
Reported upstream production increased 8% year over year in the first half, or 11% on an underlying basis, according to Descalzi. The company said it offset production losses in the Middle East through project execution and contributions from assets including Agogo in Angola, Amoca in Mexico and Congo LNG Phase Two.
ENI raised its 2026 underlying oil and gas production outlook to more than 5% above the upper end of its previous range. Chief Operating Officer Natural Resources Guido Brusco said the increase reflects stronger contributions from Libya, Mexico and Kazakhstan, as well as the earlier-than-expected consolidation of Searah.
The company also reiterated an expected production growth rate of about 4% annually through 2030. Descalzi said ENI has 54 organic growth projects across at least 13 or 14 countries, with many already sanctioned, under development or advanced through planning stages.
During the first half, ENI sanctioned Baleine Phase Three in Côte d’Ivoire, Geng North in Indonesia and Cronos in Cyprus. Descalzi said the company’s 2023 exploration program added more than 1 billion barrels of resources, supported by discoveries in Angola, Côte d’Ivoire, Libya, Egypt and Indonesia.
The Searah business combination, completed in June, created ENI’s largest satellite platform and established a larger position in the Pacific region, management said. Initial production exceeded 300,000 barrels per day, and the company sees a path toward approximately 800,000 barrels per day by 2030.
Americas expansion and Venezuela negotiations
Management highlighted Argentina and Venezuela as increasingly important components of the company’s upstream portfolio. ENI is finalizing negotiations for contracts covering the Junin 5 and Corocoro assets in Venezuela and has completed a gas export agreement for the Perla field.
Descalzi said the Junin 5 project could be structured similarly to a production-sharing arrangement and could offer relatively rapid investment recovery because of its shallow reservoir and drilling-focused development. Brusco said ENI was prepared to mobilize drilling rigs after a contract is signed.
In Argentina, ENI said its recently consolidated asset contains 25 trillion cubic feet of gas, 500 million barrels of condensate and total gross recoverable resources of about 4.8 billion barrels of oil equivalent. Brusco said production could peak at approximately 550,000 barrels of oil equivalent per day, including liquids and LNG for export.
The company is partnering with YPF and XRG in Argentina through an incorporated venture intended to manage the upstream, midstream and export value chain.
Raised business guidance and capital returns
ENI raised guidance across several businesses. Global Gas & LNG pro forma EBIT is now expected to exceed €1.4 billion, while Plenitude and Enilive’s combined full-year pro forma EBITDA target was increased to €2.6 billion from €2.4 billion.
Descalzi said Global Gas & LNG generated €470 million of pro forma EBIT in the second quarter. He added that the second-half outlook could benefit from pricing conditions and inventory replenishment dynamics. Cristian Signoretto, director of Global Gas and LNG Portfolio, said Europe’s gas market remains “fairly fragile” because of geopolitical conditions and delayed storage replenishment, creating potential upside in volatility and prices.
Enilive generated €375 million of adjusted EBITDA in the second quarter, according to Chief Executive Stefano Ballista. He said biorefining accounted for roughly 35% to 40% of the total and that asset utilization at Chalmette and Gela exceeded 90% during the quarter.
ENI increased its adjusted cash flow from operations guidance to €15 billion under an $85-per-barrel Brent scenario. It expects gross capital expenditures of about €7 billion for the year and reduced expected net capital expenditures to below €5 billion.
The company repurchased €600 million of shares during the quarter and now expects to buy back €3.4 billion of stock in 2026, compared with initial guidance of €1.5 billion. Descalzi said outstanding shares have been reduced by approximately 18% since 2021.
- Potential additional shareholder distributions would be assessed in October and paid during the fourth quarter, management said.
- Chief Transition and Financial Officer Francesco Gattei said an extra dividend could be triggered by full-year pricing conditions, including a Brent average of $90 per barrel, refining margins and European gas prices above specified thresholds.
- Gattei added that a higher-price environment could also support additional repurchases, with a potential ceiling of €4 billion.
Trading partnership, refining and chemicals
ENI also discussed its planned 50-50 trading joint venture with Mercuria. Brusco said the partnership would combine ENI’s industrial assets and supply portfolio with Mercuria’s trading capabilities. Management expects the venture to improve ENI’s long-term return on average capital employed by one to two percentage points.
In refining, management said benchmark margins do not fully reflect ENI’s realized profitability because of higher freight and logistics costs, crude differentials and hedging effects. The company said its realized refining margin could be $2 to $3 per barrel below the nominal benchmark, although it expects strong refinery utilization in the third quarter following first-half turnaround work.
Versalis’ chemical operations narrowed losses, with management attributing progress to restructuring efforts and temporary market tightness. A Versalis representative said the company expects transformation initiatives to generate about €280 million to €300 million of annual improvement, above its prior €250 million target.
About ENI (NYSE:E)
ENI S.p.A. is an integrated energy company headquartered in Rome, Italy, founded in 1953 as a state-established hydrocarbon entity and later transformed into a publicly traded multinational. The firm's activities span the full hydrocarbon value chain and extend into power generation and low‑carbon energy solutions. ENI maintains a long history in exploration and production, engineering and project development, and downstream operations that include refining, petrochemicals and retail fuel distribution.
Core businesses include upstream exploration and production of oil and natural gas, midstream and liquefied natural gas (LNG) handling, and downstream refining and marketing of petroleum products and lubricants.
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