Jul 30, 2019

BP boosted by increased output despite lower oil prices

BP's second-quarter earnings beat expectations as higher production helped the energy major offset lower oil prices. Analysts estimated replacement cost profits of $2.5bn. Oil and gas production from BP's operations rose nearly 7 per cent from the same quarter a year ago to 2.6m barrels of oil equivalent per day after the acquisition of BHP's US shale assets and the ramp-up of major projects. The growth in production volumes helped to support earnings and cash flow from operations which grew to $6.8bn compared to $6.3bn the same quarter a year ago, including movements in working capital and excluding the Gulf of Mexico oil spill payments that tallied $1.4bn. Chief executive Bob Dudley said in a statement: "BP is right on target. Reliable performance and disciplined growth across our businesses are delivering strong earnings, cash flow and returns to shareholders". Rival Royal Dutch Shell is due to publish its earnings this week alongside ExxonMobil and Chevron of the US. BP said production in the third quarter was likely to be lower because of maintenance activities in the North Sea, Angola and the Gulf of Mexico. Gearing, the ratio between debt and BP's market value, increased slightly from the last quarter to 31 per cent as of the end of June.

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