TIDMBP.
RNS Number : 4696U
BP PLC
06 April 2021
press release
6 April 2021
bp provides update on progress towards $35 billion net debt
target
bp today provides an update on the expected timing of reaching
its $35 billion net debt target including the delivery of disposal
proceeds and performance during the first quarter of 2021.
"We are pleased to announce that we now expect to have reached
our $35 billion net debt target during the first quarter 2021. This
is a result of earlier than anticipated delivery of disposal
proceeds combined with very strong business performance during the
first quarter. We look forward to updating the market at our first
quarter results, including further information on share
buybacks."
Bernard Looney, chief executive officer
Delivery of disposal proceeds
During the first quarter bp has received around $4.7 billion of
disposal proceeds. This includes approximately:
- $2.4 billion from the completion of the sale of a 20% interest in Oman's Block 61;
- $1.0 billion as the final payment from the sale of bp's global
petrochemicals business to INEOS;
- $0.7 billion from the sale of a 49% interest in a controlled
affiliate holding certain refined product and crude logistics
assets onshore US; and
- $0.4 billion from the sale of an interest in Palantir - a
significant return on our initial investment.
bp now expects disposal proceeds in 2021 to be at the top end of
the previously announced $4--6 billion range.
bp's target of $25 billion of disposal proceeds between the
second half of 2020 and 2025 is now underpinned by agreed or
completed transactions of around $14.7 billion with approximately
$10.0 billion of proceeds received.
Progress towards $35 billion net debt target
bp's net debt at the end of the fourth quarter 2020 was $38.9
billion.
As disclosed at the time of the fourth quarter 2020 results, net
debt was expected to increase in the first half of 2021, driven by:
severance payments spread across both quarters; the payment to
Equinor following completion of the US offshore wind joint venture
which occurred during the first quarter; and the $1.2 billion
pre-tax annual Gulf of Mexico oil spill payment scheduled for the
second quarter.
Reflecting the delivery of disposal proceeds and the very strong
business performance in the first quarter 2021, driven by trading,
the price environment and resilient operations, bp now expects to
have reached its net debt target of $35 billion during the first
quarter 2021.
On reaching this net debt target, bp is committed to returning
at least 60% of surplus cash flow to shareholders by way of share
buybacks, subject to maintaining a strong investment grade credit
rating.
Further information, including in relation to share buybacks,
will be provided with bp's first quarter 2021 results, expected to
be reported on Tuesday 27 April.
Further information:
This announcement includes inside information as defined in
Article 7 of the Market Abuse Regulation No. 596/2014. The person
responsible for arranging the release of this announcement on
behalf of BP p.l.c. is Ben Mathews, Company Secretary.
Contact:
bp press office: bppress@bp.com , +44 (0)7831 095541
Cautionary statement:
In order to utilise the 'safe harbor' provisions of the United
States Private Securities Litigation Reform Act of 1995 (the
'PSLRA'), bp is providing the following cautionary statement. This
announcement contains certain forward-looking statements - that is,
statements related to future, not past events and circumstances -
which may relate to one or more of the financial conditions,
results of operations and businesses of bp and certain of the plans
and objectives of bp with respect to these items. These statements
are generally, but not always, identified by the use of words such
as 'will', 'expects', 'is expected to', 'aims', 'should', 'may',
'objective', 'is likely to', 'intends', 'believes', 'anticipates',
'plans', 'we see' or similar expressions.
In particular, among other statements, bp's expectation to have
reached its $35 billion net debt target during the first quarter
2021; expectations for disposal proceeds in 2021 to be at the top
end of a $4-6 billion range; statements and expectations regarding
bp's target of $25 billion of disposal proceeds between the second
half of 2020 and 2025 including expectations in respect of the
completion of agreed transactions and timing of the receipt of
disposal proceeds; expectations regarding the impact and timing of
severance payments and the annual Gulf of Mexico oil spill payment;
statements regarding the triggering of the commitment to return at
least 60% of surplus cash flow to shareholders by way of share
buybacks subject to maintaining a strong investment grade credit
rating; expectations for bp to provide further information
including in relation to share buybacks with bp's first quarter
2021 results; and expectations regarding the date on which bp's
first-quarter 2021 results will be released, are all forward
looking in nature. By their nature, forward-looking statements
involve risk and uncertainty because they relate to events and
depend on circumstances that will or may occur in the future and
are outside the control of bp. Actual results may differ from those
expressed in such statements, depending on a variety of factors
including the extent and duration of the impact of current market
conditions including the significant drop in the oil price, the
impact of COVID-19, overall global economic and business conditions
impacting our business and demand for our products as well as the
specific factors identified in the discussions accompanying such
forward-looking statements and other factors discussed under "Risk
Factors" in our most recent Annual Report and Form 20-F and in any
of our more recent public reports.
Our most recent Annual Report and Form 20-F and other period
filings are available on our website at www.bp.com or can be
obtained from the SEC by calling 1-800-SEC-0330 or on its website
at www.sec.gov.
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