BP (NYSE:BP) announced on Tuesday the first dividend increase since the oil prices started crashing in 2014, as it quadrupled second-quarter earnings from a year ago.
BP reported today an underlying replacement cost profit-its proxy for net profit-of US$2.8 billion for the second quarter of 2018, four times the profit reported for the same period in 2017, including significantly higher earnings from the upstream business and its 20-percent stake in Russian oil giant Rosneft.
BP's second-quarter profit exceeded forecasts of US$2.7 billion from a company-provided survey of analysts.
The UK oil supermajor also reported a strong upstream performance in Q2-the strongest quarter since the third quarter of 2014 on both a replacement cost and underlying basis. BP's oil and gas production stood at 3.6 million barrels of oil equivalent a day (boepd) in the second quarter, 1.4 percent higher than in Q2 2017, excluding Rosneft.
BP hiked its dividend by 2.5 percent to 10.25 cents a share, the first increase since the third quarter of 2014.
"Given this momentum and the strength of our financial frame, we are increasing our dividend for the first time in almost four years. This reflects not just our commitment to growing distributions to shareholders but our confidence in the future," BP Group chief executive Bob Dudley said.
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In a sign that BP is shaking off not only the oil price slump, but also the huge US$65-billion tab for the Deepwater Horizon disaster in 2010, BP said last week that it was buying U.S. shale assets from BHP Billiton for US$10.5 billion-one of BP's biggest deals in the past two decades.
The move to acquire most of BHP Billiton shale acreage in North America "signals a bold return by the UK oil giant to the lower 48 states and gives it a prominent position in the red-hot North American tight oil play. The deal, one of the largest acquisitions in BP's history, gives the company secure access to new projects that can contribute on a large scale to growing its production," Rystad Energy said on Monday, commenting on the BP-BHP deal.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More