01 Aug BP beats Q2 forecasts despite Angola project write-off
BP (LSE:BP) latest financial results have exceeded analyst expectations, despite the British oil major taking a hefty hit on an unsuccessful project in Angola.
Profits on a replacement cost basis fell by 5% during the second quarter of 2017 to US$684 million, from $720 million in the same period last year, however analysts had on average expected profits around the $500 million mark.
The underlying replacement cost profit rubric, used as a proxy for net profit by analysts, was also significantly down from BP’s Q1 figure of $1.5 billion, as a result of the firm’s decision to abandon its 50% stake in a gas exploration block off the coast of Angola.
“We continue to position BP for the new oil price environment, with a continued tight focus on costs, efficiency and discipline in capital spending,” said Bob Dudley, chief executive officer at BP.
“We delivered strong operational performance in the first half of 2017 and have considerable strategic momentum coming into the rest of the year and 2018, with rising production from our new upstream (exploration and production) projects and marketing growth in the downstream.”
BP’s upstream production increased 10% on Q2 2016, while cash flow amounted to $4.9 billion and net debt increased to $39.8 billion from $30.9 billion a year ago.