Anadarko Petroleum Corp. (NYSE: APC) said Sept. 20 it would spend $2.5 billion to buy back its own stock, a plan worth roughly 10% of its outstanding shares at current prices.

Anadarko, like many U.S. oil producers, has seen its stock languish in 2017 as crude prices have stayed at or below $50 per barrel, depressing profits. Anadarko's shares have dropped 35% since January.

In after-hours trading on Sept. 20, the company's stock jumped 3.6% to $46.40.

Stock buybacks decrease the number of a company's outstanding shares, boosting earnings per share. They have been controversial among some investors who have pushed for higher dividends instead.

Anadarko, which has a 5 cent dividend that is far below peers, said it would spend $1 billion by December on buybacks and the remaining $1.5 billion by the end of next year.

"We believe this is a very attractive use of our cash given the value of our assets and the highly accretive nature of this program," CEO Al Walker said in a statement.

The company had $6 billion in cash as of June 30.

Anadarko also expects to pump 130,000 barrels per day (bbl/d) this year in its Gulf of Mexico operations and end the year pumping a combined 150,000 bbl/d in the Permian and Denver-Julesburg shale basins, it said.

Going into 2018, Anadarko said it should produce substantial cash flow with an average oil price of $50/bbl.