BP PLC (LON:BP.) saw its second-quarter profit come in at four times the amount it reached last year, boosted by higher oil prices.
The FTSE 100-listed oil giant reported underlying replacement cost profit of US$2.8bn, topping the US$2.7bn consensus forecast, and well above the US$0.7bn earned a year earlier and the US$2.6bn reported in the first quarter.
READ: BP strikes US$10.5bn deal to acquire BHP Billiton’s US shale assets
The company’s first-half production rose to 3.662mln barrels of oil equivalent per day (boepd), which included production from Russian partner Rosneft, up from 3.544mln boepd a year earlier.
Brent crude futures, currently trading above US$74 a barrel, have risen by around 16% over the first half of 2018 and are up about 60% since June 30, 2017.
BP’s net debt was US$39.3bn at the end of June compared with US$40bn at the end of March.
The company also confirmed it would increase its quarterly dividend for the first time in nearly four years, with a payout of 10.25 US cents a share, as indicated with the BHP Billiton PLC (LON:BLT) shale deal announcement last Friday.
In its biggest deal in nearly 20 years, BP agreed to buy US shale oil and gas assets from the global miner for US$10.5bn, expanding the oil major's footprint in oil-rich onshore basins.
BP is also buying back shares up to a value of US$200mln in the first half of this year.
Beat of note
AJ Bell investment director Russ Mould commented: “For a long period in the wake of 2014’s oil price crash the key question was whether or not BP could maintain its generous dividend payments.
“Well the debate has now moved on after the company came up with a modest increase in the quarterly dividend alongside better than expected results for the three months to 30 June. This dividend hike had already been flagged on Friday hence the relatively modest share price reaction today.
“However, the beat itself is also of note given expectations will have been raised by the increase in the oil price and after US peers ExxonMobil and Chevron both came in short of forecasts with their own second quarter updates last week.”
In late morning trading, BP shares in London were 0.7% higher at 569.70p.
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