* Total’s shares among top gainers in Paris
* Analyst says expect Total to move away from scrip soon
* Total cancels treasury shares, no financial impact
PARIS, Dec 16 (Reuters) - French oil and gas company Total on Friday cut the discount offered for its shares in a scrip dividend scheme for the second quarter to 5 percent from 10 percent citing improved confidence in its outlook and rising oil prices.
Oil companies have used the scrip dividend programme to maintain rather than cut dividends due to the prolonged fall in oil prices in a global glut.
Prices have rebounded from lows hit earlier this year after the Organization of the Petroleum Exporting Countries agreed to cut output by 1.2 million barrels per day (bpd) from Jan. 1, its first such deal since 2008. Russia and other non-OPEC producers plan to cut about half as much.
Brent crude futures were trading at $54.27 per barrel at 1153 GMT.
Total has said it will remove the scrip dividend scheme if oil is at around $60 per barrel in 2017.
It said in October that it was on track to deliver on its cost reduction programme, and will deliver $4 billion in savings by 2018, while increasing output.
Total’s shares were among top gainers in the Paris CAC 40, up 1.54 percent, outperforming the European Oil and Gas index , up 0.99 percent by 1136 GMT.
“We see this as a clear positive. We see this as a step in the right direction for Total, on the way to a full cash dividend, and shows the company has confidence in its delivery of free cash flow in 2017,” RBC’s Biraj Borkhataria, said in a note.
“We continue to believe Total should be one of the first majors that currently offers a scrip to move away and towards a full cash dividend, given the strength of its growth pipeline over the next few years,” Borkhataria said.
Total said in a separate statement after a board meeting on Thursday that it will cancel 100,331,268 treasury shares that were previously repurchased off-market from four affiliates. It said the aim was to tidy its capital structure and the cancellation will have no financial impact. (Reporting by Bate Felix; Editing by Ruth Pitchford)