Rising production and higher oil prices drove improved profits for BP PLC (LON:BP.) in the first quarter, helping the oil giant's shares edge higher on Tuesday.
BP posted a profit of almost $2.5 billion for the first quarter of the year, rising from a profit of just over $1.4 billion over the same period last year.
BP profits soared to $2.6bn (£1.9bn), a 71 per cent boost from the same period previous year when it stood at $1.5bn.
Revenues climbed 22pc to 68.1bn, boosted by a 6pc rise in production to 3.7m barrels per day after new oil and gas fields came online.
Moving through 2018 we're determined to keep delivering our operational targets and maintaining capital discipline while growing cash flow and returns.
Our safe and reliable operations and strong financial delivery have continued into 2018. US profit totaled $526 million, compared to $166 million in the first quarter of a year ago, and non-U.S. profit rose from $1.2 billion to $2.63 billion. The company paid out $1.6 billion on a pretax basis related to Deepwater Horizon, including a final $1.2 billion payment to the U.S. Department of Justice.
Chief Financial Officer Brian Gilvary said the London-listed company might consider raising the dividend later this year if oil prices remain near current levels and debt declines. Upstream plant reliability* was 96% for the quarter.
Investors are scrutinizing cash flow as an indication of Big Oil's ability to pass on the rewards of higher prices through share buybacks. Upstream production, excluding Rosneft, was 9% higher, supported by continued ramp up of major projects*.
A almost 25 percent rise in oil prices over the past year to over $70 a barrel has lifted revenue for oil companies, shifting investors' focus to how much cash they can generate following years of cost cuts.
"So it's not just about price, it's actually about the performance of the kit".
The recovery has been fuelled also by geopolitical tensions, US President Donald Trump's threat to reimpose sanctions on Iran and production problems in Venezuela, Nigeria and Libya.
Shares rose by more than 1 per cent in early trading.
"BP shares are in demand... after the company posted a surge in profit that topped analyst estimates", noted CMC Markets analyst David Madden.
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