Rising production and higher oil prices drove improved profits for BP PLC (LON:BP.) in the first quarter, helping the oil giant's shares edge higher on Tuesday.
The FTSE 100-listed firm produced some 3.7mln barrels of crude per day in the three-month period, up 6% from the comparative period of 2017.
A major project - the Atoll field in Egypt - came online during the period.
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BP said it was the strongest quarter for its upstream business since mid-2014.
"We have delivered another strong set of results,” said Bob Dudley, BP chief executive.
“Our safe and reliable operations and strong financial delivery have continued into 2018. Underlying profit was up 23% on the previous quarter and was our best quarterly result in three years. With rising output from our new major projects and excellent reliability, Upstream production was 9% higher than a year earlier.”
Improved financials
BP's operating cash flow, not including oil spill payments, amounted to US$5.4bn and included a US$1.8bn draw related to increased capital spending.
The company reported underlying profit (on a replacement cost basis) of US$2.6bn, up 71% versus the US$1.5mln 2017 comparative.
It paid out some US$1.6bn in payments connected to the Gulf of Mexico oil spill, including the US$1.2bn final payment relating to the 2012 settlement with the US Department of Justice.
Around US$120mln was spent on share buybacks, and the oiler maintained its first-quarter dividend at 10 US cents per share.
Bob Dudley added: "Moving through 2018 we're determined to keep delivering our operational targets and maintaining capital discipline while growing cash flow and returns.
"Over the longer term, our new lower carbon ambitions, including clear targets for our own emissions, will help ensure that all of BP is also focused on advancing the energy transition."
Dividend confidence improves
In a note to clients, analysts at RBC Capital said: “We expect improving earnings and cash generation to show through early 2018 as BP captures higher commodity prices and widening crude spreads.
“We expect BP's cash flow generation to improve this year, both on an absolute basis and relative to peers. This should help improve confidence around BP's dividend.”
RBC Capital repeated a ‘buy’ rating and 600p price target on BP.
In late morning trading, BP shares in London were 0.8% higher at 542.4p.
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