BP has announced its financial results for the first quarter of 2014. Underlying replacement cost profit for the quarter was US$ 3.2 billion, compared with US$ 2.8 billion for the previous quarter and US$ 4.2 billion for the first quarter of 2013. Operating cash flow in the quarter was US$ 8.2 billion.
The company also announced a quarterly dividend of 9.75 cents per ordinary share to be paid in June, 8.3% higher than a year earlier.
BP Group CEO, Bob Dudley, commented: “This is a very solid start to 2014. Operating cash flow was strong in the first quarter, we have seen further exploration success and upstream project start-ups, and the upgraded Whiting refinery is ramping up steadily. We remain confident of delivering our 10-point plan targets that we set in 2011 for delivery in 2014.”
BP is nearing completion of its current US$ 8 billon share buyback programme, with US$ 7.6 billion spent repurchasing shares for cancellation. To date, BP has agreed divestments totalling over US$ 3.0 billion, including the agreement last week to divest a number of assets in Alaska, towards its expectation of agreeing US$ 10 billion in additional divestments by the end of 2015. BP expects to use the post-tax proceeds from these divestments primarily for distributions to shareholders, biased towards share buybacks.
Dudley added: “We expect material growth in operating cash flow, coupled with disciplined investment, to deliver sustainable growth in free cash flow. This will support increasing distributions to our shareholders. As well as progressive growth in the dividend per share, we expect to use surplus cash to support further distributions through share buy-backs or other mechanisms.”
BP’s Upstream segment reported US$ 4.4 billion underlying pre-tax replacement cost profit for the first quarter, compared with US$ 3.8 billion for the previous quarter and US$ 5.7 billion for the first quarter of 2013.
Following the decision to create a separate BP business around its US lower 48 onshore oil and gas activities, and as a consequence of appraisal results, BP has decided not to proceed with development plans in the Utica shale. The Upstream result includes a write-off relating to the Utica acreage.
The Downstream segment reported US$ 1.0 billion underlying pre-tax replacement cost profit for the first quarter, compared with US$ 70 million for the fourth quarter of 2013 and US$ 1.6 billion for the first quarter last year.
BP also reported an estimated underlying pre-tax replacement cost profit for Rosneft2 of US$ 271 million for the quarter. This result was adversely affected by depreciation of the rouble against the US dollar.
Oil and gas production
Total group reported production of oil and gas for the quarter, including Russia, was 3.13 million barrels of oil equivalent a day (boepd). BP’s share of Rosneft oil and gas production for the quarter was 1 million boepd.
Excluding Russia, underlying production was slightly lower than a year earlier as higher output from new projects in the North Sea, Angola and Gulf of Mexico was offset by turnaround activity in Angola and lower production elsewhere. Reported production, excluding Russia, was 8.5% lower reflecting both the expiry in January of the onshore concession in Abu Dhabi and the impact of divestments.
Adapted from press release by Katie Woodward
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