European Stock Markets
BP’s (BP.L)
profits more than doubled in 2017 to $6.2 billion (4.43 billion pounds)
powered by higher prices and output of oil and gas, allowing the
company to resume share buybacks as it recovers from a three-year
downturn.
The London-listed company saw one of the strongest production increases in its history last year, lifting output to levels not seen since the deadly 2010 Deepwater Horizon spill. Production is set to continue growing into the end of the decade thanks to more field start-ups this year.
The company will be able to generate profits in 2018 at an oil price of $50 a barrel, Chief Financial Officer Brian Gilvary told Reuters, as years of spending cuts kicked in and as it slowly shakes off a $65 billion bill for penalties and clean up costs of the 2010 spill.
The London-listed company was the first among its European peers to resume share buybacks in the fourth quarter of 2017 after years of resorting to dilutive austerity measures in the face of the industry slump.
With a 20 percent bounce in oil prices in the last quarter of 2017 to $61 a barrel, BP had a surplus of cash that allowed it to buy $343 million worth of shares in the fourth quarter, offsetting the scrip dilution.
BP shares were trading 1.4 percent lower at 0824 GMT, compared with a 2.3 percent decline for the sector .SXEP.
Full-year production rose 12 percent to 2.47 million barrels per day (bpd) after BP launched 7 new oil and gas fields in 2017, a record year.
It is set to inaugurate 5 additional projects this year including in Egypt, Azerbaijan and the UK North Sea that will help it boost its production by 800,000 barrels per day (bpd) by 2020, which will be mostly gas.
BP was also able to add around 1 billion of barrels of oil equivalent to its reserves in 2017, the largest since 2004, thanks to six discoveries, including two in the North Sea. Its reserve replacement ratio was estimated at 143 percent for the year.
BP’s refining and trading segment, known as downstream, saw profits rise to $7 billion in 2017 as earnings for the marketing division rose by more than 10 percent.
BP also took a one-off charge of $900 million to adjust to new U.S. tax rules, though it expects a long-term boost from the lowered corporate tax rates.
BP reported a $2.1 billion fourth-quarter underlying replacement cost profit, the company’s definition of net income, topping forecasts for $1.9 billion, a company-provided survey of analysts showed.
That marked a jump from $400 million a year earlier and topped a third-quarter profit of $1.9 billion.
On an annual basis, BP’s profits soared to $6.2 billion from $2.6 billion in 2016.
Gearing, the ratio between debt and BP’s market value, rose to 27.4 percent at the end of 2017 from 26.8 percent at the end of September. Net debt was $37.8 billion, up from $35.5 billion a year earlier, after the company paid $5.4 billion related to the Deepwater Horizon spill.
BP’s full year capital spending reached $16.5 billion, within the annual range of $15-$17 billion it plans to maintain until 2021.
The London-listed company saw one of the strongest production increases in its history last year, lifting output to levels not seen since the deadly 2010 Deepwater Horizon spill. Production is set to continue growing into the end of the decade thanks to more field start-ups this year.
The company will be able to generate profits in 2018 at an oil price of $50 a barrel, Chief Financial Officer Brian Gilvary told Reuters, as years of spending cuts kicked in and as it slowly shakes off a $65 billion bill for penalties and clean up costs of the 2010 spill.
The London-listed company was the first among its European peers to resume share buybacks in the fourth quarter of 2017 after years of resorting to dilutive austerity measures in the face of the industry slump.
With a 20 percent bounce in oil prices in the last quarter of 2017 to $61 a barrel, BP had a surplus of cash that allowed it to buy $343 million worth of shares in the fourth quarter, offsetting the scrip dilution.
BP shares were trading 1.4 percent lower at 0824 GMT, compared with a 2.3 percent decline for the sector .SXEP.
Full-year production rose 12 percent to 2.47 million barrels per day (bpd) after BP launched 7 new oil and gas fields in 2017, a record year.
It is set to inaugurate 5 additional projects this year including in Egypt, Azerbaijan and the UK North Sea that will help it boost its production by 800,000 barrels per day (bpd) by 2020, which will be mostly gas.
BP was also able to add around 1 billion of barrels of oil equivalent to its reserves in 2017, the largest since 2004, thanks to six discoveries, including two in the North Sea. Its reserve replacement ratio was estimated at 143 percent for the year.
BP’s refining and trading segment, known as downstream, saw profits rise to $7 billion in 2017 as earnings for the marketing division rose by more than 10 percent.
BP also took a one-off charge of $900 million to adjust to new U.S. tax rules, though it expects a long-term boost from the lowered corporate tax rates.
BP reported a $2.1 billion fourth-quarter underlying replacement cost profit, the company’s definition of net income, topping forecasts for $1.9 billion, a company-provided survey of analysts showed.
That marked a jump from $400 million a year earlier and topped a third-quarter profit of $1.9 billion.
On an annual basis, BP’s profits soared to $6.2 billion from $2.6 billion in 2016.
Gearing, the ratio between debt and BP’s market value, rose to 27.4 percent at the end of 2017 from 26.8 percent at the end of September. Net debt was $37.8 billion, up from $35.5 billion a year earlier, after the company paid $5.4 billion related to the Deepwater Horizon spill.
BP’s full year capital spending reached $16.5 billion, within the annual range of $15-$17 billion it plans to maintain until 2021.
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