BP Swung to 3Q Loss on Weaker Upstream Earnings
October 29 2019 - 4:14AM
Dow Jones News
By Giulia Petroni
BP PLC (BP.LN) said Tuesday that it swung to a loss in
third-quarter earnings as it reported a divestment-related charge
as well as lower upstream earnings.
The London-based energy giant posted a replacement-cost loss--a
metric similar to the net income figure that U.S. oil companies
report--of $351 million for the three months ended Sept. 30,
compared with a profit of $3.09 billion in the year-earlier
period.
Stripping out one-off items, BP's underlying replacement-cost
profit--the company's preferred metric--came in at $2.25 billion,
compared with $3.84 billion in the same period last year. A
company-compiled consensus of 24 brokers' estimates had forecast
third-quarter underlying replacement-cost profit at $1.73
billion.
BP attributes the fall partly to weaker oil prices, with Brent
crude at $62 a barrel in the quarter, compared with $75 bbl in the
year-earlier period. Production was also hit by maintenance
activities in some of the company's highest-margin regions, as well
as Hurricane Barry in the Gulf of Mexico, which shut down
facilities for about 14 days, BP said.
The company also reported a non-cash, non-operating after-tax
charge of $2.6 billion related to divestments.
Total revenue for the third quarter was $62.29 billion, compared
with $80.80 billion the previous year, BP said. The company
reported a net loss of $749 million.
Upstream production for the quarter, excluding Rosneft Oil Co.
(ROSN.MZ), rose 4.4% to 2.57 million barrels of oil equivalent a
day. Underlying replacement-cost profit before interest and tax in
the upstream business--which produces oil and gas--fell to $2.14
billion from $4 billion last year.
Looking ahead, BP said it expects fourth-quarter production to
be higher thanks to the completion of seasonal maintenance and
turnaround activities.
Operating cash flow, excluding payments related to the 2010
Deepwater Horizon oil spill, was $6.5 billion, while net debt rose
to $46.5 billion, BP said. The company paid roughly $400 million in
connection to the oil spill in the Gulf of Mexico as part of a $20
billion settlement with the U.S. government in 2015.
BP declared a quarterly dividend at 10.25 cents a share.
The company said divestment transactions announced in 2019
totaled $7.2 billion at the end of the quarter, adding it expects
to reach around $10 billion by the end of the year.
Write to Giulia Petroni at giulia.petroni@wsj.com
(END) Dow Jones Newswires
October 29, 2019 03:59 ET (07:59 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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