Why Oil Major BP Shares Are Surging Today

BP PLC BP shares are trading higher after the company reported fourth-quarter FY23 results.

Sales and other operating revenues came in at $52.14 billion, missing the consensus of $62.34 billion.

Production was 899 mboe/d (-6.0% Y/Y), with underlying production down 3.8% Y/Y due to lower base performance, particularly in Egypt.

The Renewables pipeline stood at 58.3GW (bp net), including 19.3GW bp net share of Lightsource BP’s pipeline in the quarter. 

Adjusted EBITDA declined to $10.57 billion from $13.10 billion a year ago. Underlying RC profit per American Depositary Share (ADS) came in at $1.07, beating the consensus of $0.15. 

Operating cash flow was $9.38 billion, compared to $13.57 billion in the prior-year quarter. Capital expenditure declined to $4.71 billion from $7.37 billion a year ago. Net debt lowered to $20.91 billion from $21.42 billion a year ago.

Also Read: BP Shuts Whiting Refinery Due To Transformer Failure, Sparks Fuel Supply Fears: Report

In 2023, BP started up four major projects, including Seagull, in the fourth quarter. Seagull is expected to add around 15 thousand barrels of oil equivalent per day of net production by 2025.

Related: Wind Of Change: Energy Giants Equinor & BP Give Offshore Wind Power Project Deal A Second Chance

Also, the company formed a joint venture with Iberdrola SA IBDRY to accelerate EV charging infrastructure roll-out in Spain and Portugal, with a plan to invest up to €1 billion and install 5,000 fast EV charge points by 2025 and around 11,700 by 2030. 

Dividend: BP announced a dividend per share of 7.270 cents, payable to common shareholders and ADS holders, on March 28, 2024, with a record date of February 16, 2024.

Repurchase: During the quarter, the company completed $1.5 billion share buybacks announced in third-quarter results. BP plans to execute a $1.75 billion share buyback before reporting the first quarter results.

BP expects to buy back $3.5 billion of shares in the first half of 2024 and expects to repurchase at least $14 billion through 2025.

First-Quarter FY24 Outlook: BP expects reported upstream production to be higher compared to the fourth quarter FY23. 

The company expects seasonally lower volumes across most businesses and the absence of one-off positive effects from the fourth quarter.

Guidance: BP continues to expect both reported and underlying upstream production to be slightly higher Y/Y in FY24. The company projects capital expenditure (including inorganic capital expenditure) to be around $16 billion, weighted towards the first half of FY24.

For FY24 and FY25, the company expects capital expenditure of around $16 billion per annum, in line with its medium-term target of $14 billion-18 billion.

Last month, BP disclosed the appointment of Murray Auchincloss as its chief executive officer (CEO), effective immediately.

Price Action: BP shares are up 5.52% at $36.13 premarket on the last check Tuesday.