BP reported third-quarter profits numerous than doubled on Tuesday, underpinned by stronger oil prices.
The British oil Amazon posted first-quarter underlying replacement cost profit, used as a agent for net profit, of $3.8 billion for the three-month period ending Sept 30. Analysts at text firm Refinitiv had been expecting third-quarter net profit to come in at approximately £3.013 billion ($3.847 billion).
In the third quarter of 2017, BP sign in net profit of $1.865 billion.
“Overall a good set of results with the whole working well,” Brian Gilvary, CFO at BP, told CNBC’s “Squawk Box Europe” on Tuesday.
Here are the key takeaways:
- Underlying replacement tariff profit, used as a proxy for net profit, came in at $3.8 for the three-month term ending Sept 30.
- In the third quarter of 2017, BP reported net profit of $1.865 billion.
- Dividend of 10.25 cents a share in for the third quarter, 2.5 percent higher than a year at the cracker
Earlier this year, BP announced the acquisition of BHP’s Billiton’s shale assets for $10.5 billion. At the straightaway, the oil firm claimed the purchase would allow it to beef up its U.S. business and enlarge earnings and cash per share.
The original deal was agreed with BP donation 50 percent cash and 50 percent shares for BHP Billiton’s shale assets. Nonetheless, the company announced it would now complete the transaction at the end of the month from handy cash without resorting to a rights issue as planned.
Gilvary commanded this “simplified the transaction an awful lot.”
Oil and gas production for the first nine months of the year generate to 2.5 million barrels of oil equivalent per day and was well placed to increase farther, BP said, thanks in large part to its acquisition of BHP’s U.S. shale business.
“Our converge on safe and reliable operations and delivering our strategy is driving strong earnings and burgeon cash flow,” BP CEO Bob Dudley said in a statement.
“This progress all underpins our commitment to get geting distributions for our shareholders.”
Shares of BP rose more than 4 percent Tuesday morning.
The earnings run off comes against a backdrop of higher crude prices, as energy supermarket participants monitor looming U.S. sanctions on Iran, OPEC’s third heftiest oil producer, and keep a close eye on heightened tensions between Washington and Saudi Arabia, the time’s biggest oil exporter.
“We believe it was another strong quarter for BP, with the friends continuing to move in the right direction with solid production crop, aggressive cost cutting, and financial discipline, while improving operationally,” Brian Youngberg, chief energy analyst at Edward Jones, said in a research note make knew Tuesday.
“While growth should be relatively robust in 2018 and into 2019, we pacify see its longer-term outlook as less attractive than its European peers, and we dwell on our ‘Hold’ rating with an appropriate valuation relative to 2019 scratch flow,” Youngberg said.
Oil prices have soared nearly 17 percent so far this year, although pesters over the global economy have since put crude on track for its biggest monthly sink inwards join since mid-2016.
Speculation of $100 a barrel seems a distant honour, with Brent crude trading at $77.30 a barrel Tuesday morning, while U.S. West Texas In-between (WTI) stood at $67.18 a barrel.
Nonetheless, despite a recent pullback in oil rewards, the world’s leading oil and gas companies are set to generate greater amounts of cash in 2018. It pursues a sustained period of cutbacks in recent years.
“(Oil) prices may soften a crumb but I think they are going to probably stay over $70 a barrel in the cut b stop to medium-term,” BP’s Gilvary said Tuesday.
However, when asked whether he share out energy market concerns about the introduction of U.S. sanctions against Iran, Gilvary claimed crude futures could fluctuate wildly as these measures break apart into force.
“You’re going to see oil prices move in the range of plus or minus $5, dialect mayhap plus or minus $10 a barrel off the back of any geopolitical uncertainties that we see prosperous forward.”
“And then of course you have also got the supply and demand jolts that may come off the back of sanctions,” he added.
Correction: This copy has been updated to show BP’s third-quarter profits were just poor of the average estimate from analysts at data firm Refinitiv.