Bourse Europe Est

Eni is one of the leading integrated energy companies in the world operating in the oil and gas, power generation, petrochemicals, engineering and construction industries. Eni is present in 73 countries and is Italy’s largest company by market capitalisation.

Full year dividend proposal: €1.25 per share, up13,6% (includes interim dividend of €0.60 per share paid in October 2006) 
Adjusted net profit: down 1.7% to €2.35 billion for the fourth quarter and up 12.5% to €10.41 billion for 2006 
Net profit: down 27.8% to €1.52 billion for the fourth quarter and up 4.9% to €9.22 billion for 2006 
Cash Flow: €1.78 billion for the fourth quarter and €17 billion for 2006 
Total shareholder return(a): 14.8% in 2006 
Oil and natural gas production was stable in the quarter; up 2% year on year 
Gas sales in Europe were down 1.5% in the quarter; up 4% year on year 

San Donato Milanese, February 23, 2007– Eni, the international oil and gas company today announces its group results for the fourth quarter and for 2006 (unaudited).
Paolo Scaroni, Chief Executive Officer, commented:
“Full year 2006 results were a record, driven by continued improvements in performance and consistent execution of our strategy, in a broadly favourable trading environment. I am particularly pleased that the total shareholder return came in at an excellent 14.8%, one of the highest among our peers. Our disciplined approach to growth is the cornerstone of delivering superior results that generate attractive long term returns for our shareholders.”
Financial highlights
Fourth quarter 
Adjusted net profit was €2.35 billion, slightly down from a year ago (down 1.7%). Adjusted operating profit of €4.78 billion decreased 3.1% from a year ago, due to the negative impact of the 8.5% appreciation of the euro versus the dollar, higher exploratory expenses, and a weak refining performance. On the positive side, the Gas & Power and Petrochemical divisions posted better operating results. 
Net borrowings increased by €2.91 billion in the quarter to €6.75 billion, as cash needs for capital expenditure of €2.94 billion, the payment of an interim dividend of €2.21 billion and the repurchase of 4.33 million of own shares at a cost of €105 million exceeded net cash generated by operating activities1 of €1.78 billion and a reduction in net borrowings as a result of exchange rate differences. 
Full Year
Revenues were up 16.8% to €86.1 billion. 
Adjusted net profit was €10.41 billion, up 12.5% from a year ago. This reflects a better operating performance (up 16.7% to €20.49 billion), partly offset by a higher Group tax rate on an adjusted basis, up 2.7 percentage points (from 46% to 48.7%). 
Net cash generated by operating activities totalled €17 billion allocated as follows: €7.83 billion to capital expenditure and €5.85 billion to shareholder distribution in terms of dividends and share repurchase. The balance combined with the positive impact of exchange rate differences contributed to a €3.71 billion reduction in net borrowings. 
Repurchase of own shares: a total of 53.13 million of own shares were purchased at a cost of €1,241 million. Since the inception of the share repurchase programme, a total of 335 million of own shares were repurchased at a cost of €5,512 million, reducing by approximately 8% the number of shares outstanding and boosting 2006 earnings per share by the same amount. 
At year-end, the ratio of net borrowings to shareholders’ equity including minorities decreased to 0.16 from 0.27 at year-end 2005.
Return on average capital employed (ROACE)2 calculated on an adjusted basis for the twelve-month period ending December 31, 2006 was 22.7% (20.5% in 2005).

2006 Dividend

The Board of Directors intends to submit to the Annual Shareholders’ Meeting the proposal of distributing a cash dividend of €1.25 per share3 for 2006, up13.6% as compared to 2005 (€1.10 per share). Included in this annual payment is €0.60 per share which was distributed as interim dividend in October 2006. The balance of €0.65 per share is payable on June 21, 2007 to shareholders on the register on June 18, 2007.

(1) See disclaimer below.
(2) Non-GAAP financial measures disclosed throughout this press release are accompanied by explanatory notes and tables to help investors to gain a full understanding of said measures in line with guidance provided for by CESR recommendation No. 2005-178b. See pages 28 and 29 for leverage, net borrowings and ROACE, respectively.
(3) Dividends do not entitle to a tax credit and, depending on the receiver, are subject to a withholding tax on distribution or are partially cumulated to the receiver’s taxable income