Ten key considerations for oil & gas 2025 planning

As we enter the 2025 corporate planning season, oil and gas firms are faced with significant choices. What represents the right balance between investment and rewarding shareholders? And how much capital should be allocated to low-carbon activities versus to traditional hydrocarbons? 

Wood Mackenzie has created a new Corporate Strategic Planner (subscription required) to help oil and gas companies, advisors and shareholders anticipate and navigate key themes for the 2025 planning and capital allocation cycle.

Fill out the form at the top of the page to download all ten key considerations from our Corporate Strategy & Analytics Service (CSAS)  report, or continue reading for a preview of the first three. 

1. Balance sheet strength

Balance sheet strength will be key for oil and gas firms to manage future shocks. We expect that companies with gearing higher than 35% will prioritise deleveraging to build resilience to future price shocks. More players will reduce gearing to less than 20% to manage energy transition risks while supporting base dividends and investment through future downturns. 

2. High-grading

Oil and gas companies will continue to sell non-core, less advantaged assets to drive portfolio improvement. The proceeds from offloading assets can potentially be used to offset higher reinvestment rates. 

3. Disciplined reinvestment rates

To ensure disciplined investment and adequate shareholder returns, reinvestment rates will average 50-60% of operating cash flow (OCF). However, re-investment rates vary widely between companies and peer groups. Players with reinvestment rates well below this range will have more scope to increase their spending.  

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Stay informed ahead of the 2025 corporate planning season. Continue reading our 'Ten key considerations for oil & gas 2025 planning' by filling out the form at the top of the page.