BP PLC (LSE:BP.) shares rose over 2% to a four-month high after the company beat quarterly profit expectations, ruled out a listing move to the US and said it plans to go further on reshaping the company.
The oil giant reported adjusted profits of $2.35 billion for the second quarter that were significantly higher than the $1.75 billion that analysts expected, despite dropping 15% compared to last year.
CEO Murray Auchincloss hailed early progress on the group's strategic shift, saying it was "two quarters into a twelve-quarter plan".
Following the appointment of Albert Manifold as chairman, who is due to officially join the board on 1 September, Auchinloss suggested the pair had talked about potential further slimlining of the business.
"He and I have been in discussions and have agreed that we will conduct a thorough review of our portfolio of businesses to ensure we are maximizing shareholder value moving forward – allocating capital effectively."
A further cost review is also being launched, he added, "with a view to being best in class in our industry".
The CEO also affirmed that the company is committed to staying listed in the UK, and a move to the US is not on the cards, with speculation having been reignited due to Manifold's CV.
Analysts said BP's momentum was shifting.
"BP is much less interested in telling the public about the number of coffees it sells each year (in excess of 100 million under former CEO Bernard Looney) and is now focused on how much oil it can extract," said Kathleen Brooks, head of research at XTB.
She said the company also seemed to be moving on from rumours that it was going to be acquired by Shell.
"The company has reduced net debt and capex spend, however, it plans to go even further, which is necessary as it comes under pressure from its activist investor, Elliott Management. The company will also conduct a further review under the tenure of its new chairman, to look for further divestment opportunities."
This further review comes after BP announced a new strategy in February, saying it would cut costs by $4-5 billion by 2027 and ramp up oil production.
Michael Hewson, market analyst from MCH Market Insights, said Q2 profits appeared to beat forecasts thanks to a jump in divestments.
He said the commitment to reducing net debt to $14-18 billion by the end of 2027, as well as increasing the dividend by 4% every year, "seems mightily ambitious given the trajectory of its net debt over the past few years which means that not only will this week’s new Brazil assets have to start generating lots of cash flow over the next 2 years, but management will also have to deliver on their promises to improve efficiency".
The promised review from Auchincloss is welcome, Hewson said, adding that "given management’s recent track record on delivering on its goals, one has to question this ambition".
BP shares rose 8.35p to 414.4p by mid-morning.