BP BP Plc

By Sarah Kent 

LONDON -- Shares in BP PLC rose to the highest level since 2010 on Tuesday as the company's efforts to regain its position among Big Oil's elite showed signs of paying off.

The move came after the London-based company reported its best quarterly profit since mid-2014, boosted by higher oil prices and rising production.

BP's solid first-quarter numbers indicate the company is moving past its fatal blowout and oil spill in the Gulf of Mexico in 2010. Shares rose 1% in early trading, touching a high of GBP5.48 -- the highest level since the days after the Deepwater Horizon accident, which spewed oil into the Gulf and resulted in the worst offshore spill in U.S. history.

To pay for cleanup costs and legal fees BP was forced to sell off billions of dollars in assets, dramatically shrinking the size of the company. To date, the spill has cost BP more than $65 billion.

But after agreeing a landmark $20 billion deal to settle all federal and state claims for the accident in 2015, the company felt in a position to invest and grow again. The company has outlined plans to return its oil-and-gas production to 4 million barrels a day, while boosting profits and cash flow.

On Tuesday the company said its replacement cost profit -- a number analogous to the net income that U.S. oil companies report -- was $2.4 billion in the first quarter, compared with $1.4 billion in the same period a year earlier. The last time it reported a profit that big was in the third quarter of 2014.

BP said production rose 6% in the first quarter compared with a year ago as the company continued to deliver on its strategy to return to its former size by the early 2020s.

However, debt levels crept higher as liabilities relating to the disaster continue to weigh on BP's performance. The company paid out $1.6 billion in the first quarter, including the final charge in a 2012 settlement with the Justice Department to resolve all criminal claims. Payments are expected to total just over $3 billion in 2018 and the company faces charges of more than $1 billion a year out past 2030.

BP caps a mixed earnings season for the world's biggest oil companies. Exxon Mobil Corp., Chevron Corp. and Royal Dutch Shell PLC posted their best first-quarter profits in years, but investors remained skeptical of companies that failed to meet expectations during three months when oil prices reached their highest level since 2014.

Write to Sarah Kent at sarah.kent@wsj.com

(END) Dow Jones Newswires

May 01, 2018 04:32 ET (08:32 GMT)

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