BP operating cash flow ‘solid’ in Q1 2014

BP on April 29 announced its financial results for the first quarter of 2014. Underlying replacement cost profit for the quarter was $3.2 billion, compared with $2.8 billion for the previous quarter and $4.2 billion for the first quarter of 2013. Operating cash flow in the quarter was $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 Chief Executive 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 now nearing completion of its current $8 billon share buyback programme, with $7.6 billion spent repurchasing shares for cancellation. So far BP has agreed divestments totalling over $3.0 billion – including the agreement last week to divest a number of assets in Alaska -- towards its expectation of agreeing $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.

BP’s Upstream segment reported $4.4 billion underlying pre-tax replacement cost profit for the first quarter, compared with $3.8 billion for the previous quarter and $5.7 billion for the first quarter of 2013. Compared to a year ago, the result was affected by the impact of divestments and higher non-cash costs.

Following on from 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 $1.0 billion underlying pre-tax replacement cost profit for the first quarter, compared with $70 million for the fourth quarter of 2013 and $1.6 billion for the first quarter last year. Compared with a year ago, the result was primarily impacted by a weaker refining environment. Both Upstream and Downstream results included a strong contribution from trading activities.

BP also reported an estimated underlying pre-tax replacement cost profit for Rosneft2 of $271 million for the quarter. This result was adversely affected by depreciation of the rouble against the US dollar.

Total group reported production of oil and gas for the quarter, including Russia, was 3.13 million barrels of oil equivalent a day (boe/d). BP’s share of Rosneft oil and gas production for the quarter2 was one million boe/d.

Source: BP Press Office, 2014