TIDMBP.
RNS Number : 4423V
BP PLC
28 October 2014
press release
28 October 2014
BP reports third quarter 2014 results
BP today reported its financial results for the third quarter of
2014. Underlying replacement cost profit(1) for the quarter was
$3.0 billion, compared with $3.7 billion for the same period in
2013. Operating cash flow for the quarter was $9.4 billion,
compared with $6.3 billion in 3Q 2013. Total operating cash flow
for the first nine months of 2014 was $25.5 billion.
"BP's operational momentum continues to deliver results," said
Bob Dudley, BP Group Chief Executive. "Growing underlying
production of oil and gas and a good downstream performance
generated strong cash flow in the third quarter, despite lower oil
prices. This keeps us well on track to hit our targets for
2014."
Reflecting confidence in delivering its 2014 operating cash flow
targets and the robustness of its financial framework in a weaker
oil price environment, BP announced a quarterly dividend of 10
cents per ordinary share, a 5.3% year-on-year increase. It is
expected to be paid in December.
BP has continued its programme of share buy-backs and $10
billion has now been used to buy back shares for cancellation since
March 2013. Divestments with a cumulative value of $4 billion have
now been agreed towards a total of $10 billion expected by the end
of 2015.
Organic capital expenditure in the first nine months of 2014 was
$16.3 billion and BP now expects organic capital expenditure for
the full year to be around $23 billion, compared with previous
guidance of $24-25 billion. At the end of the third quarter BP's
net debt was equivalent to a gearing level of 15.0%, within the
company's target range of 10% to 20%.
"We are maintaining our strong financial framework, with both a
conservative level of gearing and a strictly disciplined approach
to investment," commented Brian Gilvary, BP Chief Financial
Officer. "This provides resilience through periods of oil market
volatility."
BP's Upstream segment reported underlying pre-tax replacement
cost profit of $3.9 billion for 3Q 2014, compared with $4.4 billion
a year earlier. This result reflected the negative impacts of lower
oil prices, partly offset by higher gas prices and increased
production from key higher-margin regions.
BP's total reported oil and gas production for the quarter
averaged 3.1 million barrels of oil equivalent a day (mmboed).
Excluding Russia, underlying oil and gas production(2) grew
strongly, by 4.1% compared with the third quarter of 2013. Reported
production excluding Russia was 2.1 mmboed, 2.7% lower than the
third quarter of 2013 due primarily to the expiry of an Abu Dhabi
concession in January 2014.
BP reported underlying net income from Rosneft for the quarter
of $110 million compared with $808 million a year earlier (3) . The
depreciation of the rouble against the dollar over the period had a
significant impact on the result, together with lower Urals oil
prices and associated duty tax lag effects.
The Downstream segment reported underlying pre-tax replacement
cost profit for the quarter of $1.5 billion compared with $0.7
billion a year earlier. The improvement was driven by a stronger
refining environment as well as an increased contribution from
supply and trading activities.
In exploration, three oil discoveries have been made since
mid-year: Vorlich in the central UK North Sea, Xerelete in Brazil's
Campos basin, and Guadalupe in the deepwater US Gulf of Mexico.
"These three discoveries come after successful wells in Angola
and Egypt earlier in the year. This builds on 2013, our best year
for exploration drilling in a decade, and demonstrates our success
in rebuilding the momentum of our exploration programme," said
Dudley.
The start-up of the Kinnoull project in the UK North Sea is now
in progress - the sixth major upstream project start-up in 2014.
The Sunrise project in Canada is also scheduled to begin operations
before the end of the year. In addition, production at the Rhum gas
field in the UK North Sea has recommenced following implementation
of a temporary management scheme with the UK government.
The total cumulative pre-tax charge for the Gulf of Mexico oil
spill remained at $43 billion at the end of the quarter (4) .
In September 2014, the district court in New Orleans ruled that,
under the US Clean Water Act (CWA), the discharge of oil was the
result of gross negligence and wilful misconduct by BP Exploration
& Production Inc. (BPXP) and that BPXP is therefore subject to
enhanced civil penalties. BP intends to appeal this ruling (5)
.
During the quarter, increased costs for claims administration,
natural resource damage assessment and business economic loss
claims eliminated the remaining unallocated headroom in the $20
billion trust. Subsequent costs over and above that provided within
the trust will be charged to the income statement; $25 million was
charged in the third quarter. The aggregate remaining cash balance
in the trust and qualified settlement funds at the end of the
quarter was $6.0 billion.
Further information:
BP press office, London: +44 20 7496 4076, bppress@bp.com
Notes:
1. Underlying replacement cost profit is adjusted for
non-operating items and fair value accounting effects.
2. Underlying oil and gas production is adjusted for the impact
of the expiry of the Abu Dhabi onshore concession in January 2014,
divestments, and production-sharing agreement effects.
3. The operational and financial information of the Rosneft
segment for the third quarter 2014 is based on preliminary
operational and financial results of Rosneft for the three months
ended 30 September 2014. Actual results may differ from these
amounts. Any adjustments to this operational and financial
information based on BP's review of actual reported results will be
reflected in BP's fourth quarter results.
4. The charge does not include any provision for business
economic loss claims that are yet to be received, processed and
paid, except where an eligibility notice has been issued and is not
subject to further appeal by BP within the claims facility.
5. No adjustment has been made in the third quarter results to
the provision previously recognised for the liability under the
Clean Water Act for the reasons described in our third quarter
Stock Exchange Announcement. See note 2 to the financial statements
for information on uncertainties and contingent liabilities.
Cautionary statement:
This press release contains certain forecasts, projections and
forward-looking statements - that is, statements related to future,
not past events - with respect to the financial conditions, results
of operations and businesses of BP and certain of the plans and
objectives of BP with respect to these items. These statements
generally, but not always, are identified by the use of words such
as "will", "expected to", "is intended to", "projected" or similar
expressions. In particular, among other statements, certain
statements regarding prospects for and timing of future
distributions to shareholders; expectations regarding the delivery
of the 2014 targets; plans to divest a further $10 billion in
assets before the end of 2015; expectations regarding the total
organic capital expenditure for full year 2014; plans regarding
major projects including the timing of future start-ups; and the
anticipated timing of, prospects for and BP's prospective responses
to legal and trial proceedings, court decisions, potential
investigations and civil actions by regulators, government entities
and/or other entities or parties; are all forward looking in
nature. By their nature, forward-looking statements involve risk
and uncertainty because they relate to events and depend on
circumstances that will or may occur in the future. Actual results
may differ from those expressed in such statements, depending on a
variety of factors including the timing of bringing new fields
onstream; the timing and level of maintenance and/or turnaround
activity; the nature, timing and volume of refinery additions and
outages; the timing, quantum and nature of divestments; the receipt
of relevant third-party and/or regulatory approvals; future levels
of industry product supply; demand and pricing; OPEC quota
restrictions; PSA effects; operational problems; economic and
financial market conditions generally or in various countries and
regions; political stability and economic growth in relevant areas
of the world; changes in laws and governmental regulations;
regulatory or legal actions including court decisions, the types of
enforcement action pursued and the nature of remedies sought or
imposed; the impact on our reputation following the Gulf of Mexico
oil spill; exchange rate fluctuations; development and use of new
technology; the success or otherwise of partnering; the actions of
competitors, trading partners, creditors, rating agencies and
others; natural disasters and adverse weather conditions; changes
in public expectations and other changes to business conditions;
wars and acts of terrorism, cyber-attacks or sabotage; and other
factors discussed under "Principal risks and uncertainties" in BP's
Form 6-K for the period ended 30 June 2014.
This press release also contains financial information that is
not presented in accordance with generally accepted accounting
principles (GAAP). A quantitative reconciliation of this
information to the most directly comparable financial measure
calculated and presented in accordance with GAAP can be found on
our website at www.bp.com.
- ENDS -
This information is provided by RNS
The company news service from the London Stock Exchange
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