Health Care

BP beats on Q2 net profit

BP beats on Q2 net profit”

It's a hard time to be an oil giant: oil prices have been hovering around the $50 mark for months now, leaving oil companies (and the likes of Opec) looking for ways to cut costs, hence that Angolan write-off.

BP PLC (BP.L, BP_UN.TO, BP) reported Tuesday that its second-quarter profit before taxation was $928 million, compared to loss of $3.38 billion past year.

BP said its oil and gas production would be broadly flat in the third quarter as further project start-ups outweigh the effect of maintenance. "The $35-40 range remains a realistic short-term ambition for us as a company". Indeed, the group has indicated that $60 a barrel was needed to cover its dividend and capital expenditure for this year.

"It's a tough environment and could remain that way for some time", Dudley said on a conference call with analysts. But he sounded a rare note of optimism, calling $50 a barrel "a pretty good fairway for us going forward". Benchmark Brent crude traded at $52.84 a barrel.

The oil industry has been gloomy about prices in recent days. Oil and gas output was 10% higher at 3.54 MMbpd, in part reflecting a deal to buy into a large concession in Abu Dhabi.

That was a riff on a phrase Mr. Dudley coined about prices back in 2015, when he said they would be "lower for longer". As Macondo payments fall to $2 billion next year and $1 billion in 2019, the market will "start to react" to BP's new projects, Gilvary said. "They will stay underpinned by strong demand.They will start to drop off into the fourth quarter".

More news: Jefferies Group Brokers Lift Earnings Estimates for Statoil ASA (STO)

Mr. Gilvary highlighted the company's improved cash flow, saying BP was covering its expenses with cash generated from operations rather than debt. Operating cashflow rose by $3bn to $11.3bn in the first half of the year, although payments from the Gulf of Mexico oil spill rose by $1.8bn to $4.3bn. The company reached a $20 billion settlement in 2015 with federal and state authorities that must be paid out over nearly two decades. BP's profits and cash flow have consistently lagged behind its peers.

BP's quarterly underlying replacement cost profit, the company's definition of net income, came in at $684m, topping the $500m forecast in a company-provided analyst consensus.

Oil companies have been cutting costs and selling assets to adjust to lower oil prices, which early past year plunged to their lowest levels in more than a decade.

The company increased its oil-and-gas production by nearly 10% compared with a year earlier.

Overall, BP's exploration-and-production unit was buoyed by a raft of discoveries and new projects in Senegal, Egypt, the U.K. North Sea, Trinidad and Tobago, and India.

Further, BP announced a quarterly dividend of 10.00 cents per ordinary share or $0.600 per ADS, same as past year.

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