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Spanish oil major Repsol on Thursday reported an over twofold surge in its fourth-quarter adjusted earnings, driven by high oil and gas prices.

However, the company announced a large increase in this year’s capital spending, which sent its shares down more than 3% during Thursday’s session.

Repsol’s adjusted net income went up to EUR 2.01 billion in the fourth quarter from EUR 872 million in the year-ago period. The median analyst estimate had pointed to net profit of EUR 1.75 billion.

Full-year 2022 net income rose to EUR 4.25 billion from EUR 2.5 billion in 2021.

Yet, Repsol said it would increase capital spending to over EUR 5 billion in 2023 from EUR 4.18 billion last year.

As of 10:51 GMT on Thursday the shares of Repsol (REP) were losing 3.10% (EUR 0.475) to trade at EUR 14.865 in Madrid, while extending the loss from the prior session.

“I think the weakness today is driven by the 2023 capex guidance,” Biraj Borkhataria, an analyst at RBC Capital Markets, was quoted as saying by Reuters.

“Repsol plans to spend more than 5 billion euros in organic investments. This is quite a step up and investors will need clarity on where exactly this is going in order to have confidence in Repsol’s plans,” the analyst added.

Meanwhile, Repsol said it intended to increase its cash dividend by 11% to EUR 0.70 per share and to repurchase 35 million additional shares (or 2.64% of its capital).

In 2022, the oil company utilized its larger cash flow to bolster capital investment by 40%, to cut its net debt by 60% to EUR 2.26 billion and to ensure higher remuneration for its shareholders.

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