Shares in BP (LON:BP) have jumped in London this morning as the blue-chip oil major posted a rise in full-year profits as it benefitted from stronger crude prices and a rise in oil and gas output following the acquisition of BHP’s (LON:BHP) US shale assets. The company further posted a rise in operating cash flow.
As of 08:51 GMT, BP’s share price had added 3.44 percent to 538.00p. The shares are outperforming the broader UK market, with the benchmark FTSE 100 index which currently stands 0.88 percent higher at 538.00 points, having benefitted from upbeat leads from the US and Asia.
BP posts FY results
BP announced in a statement this morning that it its underlying replacement cost profit for full year 2018 had come in at $12.7 billion, more than double that reported for 2017. The fourth quarter result was $3.5 billion, and Reuters reports that it had surpassed a company-provided forecast of $2.63 billion. Operating cash flow, excluding Gulf of Mexico oil spill payments, for full year 2018 was $26.1 billion, up from $24.1 billion in the prior-year period.
Reported oil and gas production averaged 3.7 million barrels of oil equivalent a day for 2018, while upstream underlying production, which excludes Rosneft, was 8.2 percent higher than 2017.
Going forward, BP expects full-year 2019 underlying production to be higher than 2018 due to major projects. For the first quarter, however, the company forecasts that reported production to be flat with fourth-quarter 2018 due to divestments of assets in the North Sea and Alaska and turnaround and maintenance activities mainly in the high margin Gulf of Mexico region, offset by project start-ups and the benefit of the BHP assets.
Analysts weigh in
“We see this as a strong set of results,” RBC Capital Markets analyst Biraj Borkhataria said in a note, as quoted by Bloomberg. “We see the right balance of growth, longevity and defensiveness in the business.”