BP Profit Soars, Fueled by Higher Output -- Update
05 Febrero 2019 - 06:18AM
Noticias Dow Jones
By Neanda Salvaterra
BP PLC tripled its annual earnings and swung to a fourth-quarter
profit on increased output and higher crude prices, in line with
other major oil companies that registered boosts on their balance
sheets last year.
The U.K. energy company said Tuesday that it recorded a $2.7
billion replacement-cost profit -- a measure akin to the net income
U.S. oil companies report -- for the final quarter of 2018. That
compared with a loss of $583 million a year earlier, when BP was
hurt by costs tied to the U.S. tax overhaul.
BP, whose shares were up 5% in London, has been focused on its
recovery from the 2010 Deepwater Horizon disaster, which killed 11
people and led to the worst offshore oil spill in U.S. history. The
disaster, also known as the Macondo blowout, continues to cost the
company billions of dollars in payments each year.
Last year, it made solid headway in terms of production, with a
3% year-over-year uptick in oil and gas output. Excluding its
Russian assets, BP had an average daily output of 3.7 million
barrels of oil equivalent for 2018, its highest since 2010.
"It's sort of getting back to pre-Macondo levels," said Chief
Financial Officer Brian Gilvary on a call with The Wall Street
Journal. "It's been one of our best safety years on record and
that's what drives results."
BP is the latest big energy company to report bumper earnings.
Other firms including Exxon Mobil Corp., Chevron Corp. and Royal
Dutch Shell PLC lifted profits in 2018, reaping the benefits of
their newly streamlined operations.
The U.K. company's replacement-cost profit totaled $9.9 billion
for 2018, up from $2.8 billion in 2017 and representing BP's
largest since a tumble in oil prices about four years ago led to an
industrywide downturn.
In 2018, BP unloaded a total of $3.5 billion worth of assets.
The company said it plans to complete more than $10 billion worth
of divestments over the next two years to help offset its $10.5
billion acquisition of BHP Billiton Ltd.'s U.S. shale assets. The
sale was completed last quarter.
Investors have been focused on the impact of the deal on BP's
balance sheet because of the firm's intention to pay for the
Australian miner's assets entirely in cash.
Despite the deal, BP recorded organic capital expenditure for
the fourth quarter at $4.4 billion, compared with $4.6 billion a
year earlier.
Total capital expenditure for the year, which includes Deepwater
Horizon payments and the BHP transaction, was $25 billion for 2018,
up from $17.8 billion for 2017.
"Fourth-quarter adjusted group net income was exceptionally
strong," said Irene Himona, managing director for oil and gas at
Société Générale. She noted that the results came in 32% higher
than the market consensus.
BP declared a fourth-quarter dividend of 10.25 cents a share, in
line with prior quarters after having increased its dividend 2.5%
last July.
Analysts projected that BP generated enough operating cash flow
for the full year to offset its organic spending and cover its
payments to shareholders.
The firm said its full-year cash flow from operations adjusting
for Deepwater Horizon and working capital was $28.7 billion.
Write to Neanda Salvaterra at neanda.salvaterra@wsj.com
(END) Dow Jones Newswires
February 05, 2019 07:03 ET (12:03 GMT)
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