BP's profits reach their highest level in five years

LONDON (Reuters) – BP's (BP.L) profits have reached a record five-year high, boosted by higher oil prices, with production expected to increase further with the $ 10.5 billion acquisition of BHP Billiton's shale business in the United States. United States this week.

The findings highlight a striking change at BP over the past year, which has just ended the legacy of the deadly Deepwater Horizon disaster in 2010 with new projects and the BHP agreement, its largest acquisition in 20 years.

In an additional sign of confidence, BP said it now plans to fully finance the acquisition from available cash without resorting to a capital increase as planned. He still plans to sell assets of $ 5 billion to $ 6 billion to reduce his debt.

"We are a little cautious when we talk about BP, but we do not know the results today," said Bernstein analyst Oswald Clint in a note.

BP's share rose 3.4% to 9:14 GMT, compared with a 1% rise in the European oil and gas sector .SXEP.

The rise in oil prices over the past year, which has reached its highest level since the end of 2014, has boosted the earnings of oil companies such as BP. Coupled with strong cost reductions and tighter spending since the 2014 economic downturn, the sector has experienced rapid earnings growth.

For a third-party profit graph Q3, click tmsnrt.rs/2P25Zqn.

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BP's third-quarter underlying replacement cost benefit, the Company's net profit definition, reached $ 3.8 billion, far exceeding the $ 2.85 billion forecast based on a survey conducted by the Company. society. This compares to a profit of $ 1.86 billion a year ago and $ 2.8 billion in the second quarter of 2018.

The increase in profits came as a result of the increase in production in the first nine months of the year, thanks to the new fields and the high reliability of the oil and gas fields. .

Underlying pre-tax earnings of BP's upstream business more than doubled to approximately $ 4 billion from the same quarter last year.

"We are seeing a strong and successful business," said Brian Gilvary, Chief Financial Officer, Reuters.

"We are certain that in the financial framework we can close this deal with all cash," said Gilvary.

For a BP cash flow graph, click tmsnrt.rs/2CT4MdA.

Oil and gas production for the first nine months of the year has increased to 2.5 million barrels of oil equivalent per day (boed) and is expected to increase further with the expected conclusion of the transaction with BHP (BHP.AX) (BLT.L) October 31.

Over the past year, BP has inaugurated nine major oil and gas fields, including Azerbaijan, Oman, Egypt and Angola, which will increase production by 900,000 barrels of oil equivalent per year. by 2021. Most of the production will be gas.

The deal with BHP is expected to initially add more than 100,000 units to production before divestitures, which will include US coastal shale gas assets, which BP already owns, Gilvary said.

Gearing, BP's debt-to-market ratio, dropped to 27.5% at the end of the quarter, compared with 27.8% at the end of June. Net debt was $ 39.2 billion at the end of September.

Gilvary said the gears could rise temporarily next year beyond the 30% limit set by the company, depending on the price of oil because it pays the BHP deal.

In the fourth quarter, BP expects lower refining margins and further refinery turnarounds, primarily at its Whiting site in the United States.

BP expects its investment spending to reach about $ 15 billion in 2018.

BP's operating cash flow, excluding payments for the Deepwater Horizon Spill, was $ 6.6 billion, the same amount as the previous year.