BP said it’s generating so much cash at the moment that, provided oil prices remain around their current range, the company will pay for its $10.5 billion acquisition of BHP Billiton Ltd.’s onshore U.S. oil and gas assets entirely in cash.
Profits at oil giant BP more than doubled in the third quarter of 2018, boosted by stronger oil prices and higher production from new oil fields.
Profits rose to $3.8 billion from $1.86 billion a year earlier, its best quarterly result in five years. Revenue in the July-to-September quarter jumped to $80.8 billion, up from $60.8 billion last year.
“We’re very confident in the outlook for the company,” Brian Gilvary, chief financial officer said. “The oil price is currently north of $75; we break even at $50. We have more than sufficient surplus cash.”
When the deal was announced in July, BP had planned to fund 50 percent of the purchase through equity, however, the deal is expected to complete the BHP transaction Wednesday.
Years of cost-cutting caused by the slump in oil prices are beginning to pay dividends for the industry’s giants as the market rebounds. But investors remain skeptical, making solid delivery on results crucial for companies like BP.
It’s also closing in on its ambition to return to production levels last seen before the company’s fatal incident in the Gulf of Mexico eight years ago. To pay for the disaster, which killed 11 people and caused the worst offshore oil spill in U.S. history, BP sold off billions of dollars of assets, shrinking its production. In addition to its acquisition of BHP’s assets, BP has also started production from two new major projects this month.
“The key focus is growing the company,” Gilvary said. “We laid out a program for 2021 with growth targets. We’re ahead of those targets.”
Oil jumps as Qatar ditched, London attacks hurt sterling
Protesting workers shut down Libya’s biggest oil field
Crude oil prices edge down after sharp gain in end-July as market awaits OPEC technical committee me...
Nigeria's oil exports to slip in October, programmes show
Gambia says oil blocks claimed by African Petroleum open for bids
U.S., China talk North Korea after Putin pushes back on oil sanctions
OPEC increases non-members production forecast raising concern over US supplies
Nigeria's Kaduna refinery shut temporarily, state oil company says
Co-operation central to stability in global oil and gas industry
NCDMB lauds Dangote Refinery over compliance to local content act