HOUSTON- Exxon Mobil on Wednesday set annual capital spending through 2027 at $20 billion to $25 billion, allocating money to low-carbon projects and extending its previously projected spending rate for two years.

The top U.S. energy producer slashed costs after a historic $22.4 billion loss last year. But an oil-price rebound this year has generated strong profits that let Exxon pay down debt, maintain its dividend and fund a new low-carbon business.

The budgets extend a plan Exxon set last year to spend $16 billion to $19 billion this year and between $20 billion and $25 billion to 2025.

Wall Street has been waiting for Exxon to outline a short list of projects it will pursue and detail those it has decided to eliminate. What could be an approximately 55% increase over this year's capital budget could disappoint investors hoping for less spending and higher shareholder returns.

Exxon's higher spending "is designed to create shareholder value," Chief Executive Darren Woods said in a statement. The wide annual range allows for the "flexibility to respond to future policy changes and technology advances associated with the energy transition,” he said.

"With little change in the spending ranges we see the update as largely neutral for shares," Tudor, Pickering, Holt equity analyst Matt Murphy said in a note.

The budget was approved by a board that includes three new members elected in the spring by investors demanding the company cut spending, boost returns and better address climate concerns.

Ahead of Exxon's disclosure, oil analyst Paul Sankey said he was worried it would continue spending at the $20 billion to $25 billion annual rate. "Less capex is more cash return," Sankey wrote on Tuesday, saying past spending on production growth "led to falling upstream returns."

Exxon sought to allay fears of overspending. It can now sustain its dividend program with oil prices at $35 per barrel, a reduction from the "well below" $50 per barrel disclosed last month. Exxon also boosted the estimate for the return on average capital employed to 17% in 2027 from 14% in 2025, both key metrics to calculate dividend sustainability.

Much of the spending will go toward deepwater projects in Guyana and Brazil and in the U.S. Permian shale patch, the company said. It did not disclose a target for future production.

Exxon also said it plans to reduce greenhouse gas emissions per unit of oil and gas production by 40% to 50% through 2030, compared to 2016 levels.

Last month, the company pledged to resume share buybacks and will spend about $5 billion a year on top of $16 billion in dividends. Exxon's spending will include a fourfold increase in low-carbon initiatives spending to $15 billion a year through 2027.

Exxon's stock was up about 2% in pre-market trading to $61.02, in line with gains in other oil shares.

(Reporting by Sabrina Valle; Editing by Cynthia Osterman and Mark Porter) ((sabrina.valle@tr.com; Twitter: @sabrinavalle;))