BP Swings Back to Profit on Higher Crude Prices
August 01 2017 - 3:03AM
Dow Jones News
By Michael Amon
LONDON-- BP PLC on Tuesday returned to profit in the second
quarter and demonstrated its ability to generate cash again, with
slightly higher oil prices than last year and deep cost cuts
lifting the British oil giant.
BP reported replacement cost profit--a similar measure to the
net income that U.S. oil companies report--of $553 million for the
quarter, compared with a loss of $2.2 billion a year earlier. Brent
crude, the international benchmark, averaged $49.64 in that period
this year, compared with $45.59 last year.
The company said it generated $4.9 billion in operating cash
flow in the second quarter, compared with $3.9 billion the year
before.
Oil-and-gas production was up 9.9% to 2.4 million barrels of oil
equivalent. The company is in the midst of a plan to raise its
output by 800,000 barrels a day of oil equivalent by 2020.
The company remained weighed down by costs associated with its
Gulf of Mexico oil spill, though it says it is turning the corner
on the deadly 2010 incident. It reported a charge of $347 million
to "reflect the latest estimate for claims" resulting from the
spill.
Costs associated with the spill were the main reason behind a
deepening in net debt, to $39.8 billion compared with $30.9 billion
in the same quarter of 2016.
"We expect this will improve over the second half as these
payments decline and divestment proceeds come in towards the end of
the year," Chief Financial Officer Brian Gilvary said.
Write to Michael Amon at michael.amon@wsj.com
(END) Dow Jones Newswires
August 01, 2017 02:48 ET (06:48 GMT)
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