Zinger Key Points
- BP projects Q4 upstream production to decline, with unfavorable oil price impacts in the Gulf of Mexico and UAE.
- Refining margins and oil trading expected to weaken; net debt forecasted to decrease by quarter-end.
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BP p.l.c. BP shares fell premarket on Tuesday after the company updated fourth-quarter guidance.
The company expects upstream production to decline compared to the previous quarter, with decreases in both oil production and gas & low-carbon energy.
In the gas & low carbon energy segment, realizations are expected to benefit by $0.1 to $0.2 billion, driven by changes in non-Henry Hub natural gas prices.
Also, in the oil production & operations segment, the company anticipates realizations to have an unfavorable impact of $0.2 billion to $0.4 billion due to price lags, particularly in the Gulf of Mexico and UAE.
Apart from this, BP projects lower exploration write-offs to be $0.1 billion to $0.2 billion lower quarter-over-quarter.
The company anticipates gas marketing and trading results to be average.
In the customers & products segment, BP expects results to be lower due to seasonally reduced volumes, weaker fuel margins, FX losses, and a one-off inventory adjustment from the bio-ethanol acquisition.
Also, Refining margins are projected to decline by $0.1 billion to $0.3 billion, with increased turnaround impacts, while oil trading performance is anticipated to be weak.
BP now anticipates a decrease in net debt at the end of the quarter. Brent averaged $74.73/bbl in the fourth quarter of 2024 compared to $80.34/bbl in the third quarter of 2024.
Meanwhile, BP's refining marker margin (RMM) averaged $13.1 per barrel, compared to $16.5 per barrel in the third quarter.
Last week, BP was selected by India's ONGC as a Technical Services Provider (TSP) to enhance production from Mumbai High Field.
Investors can gain exposure to the stock via Texas Capital Funds Trust Texas Capital Texas Oil Index ETF OILT and Amplify ETF Trust Amplify Natural Resources Dividend Income ETF NDIV.
Price Action: BP shares are down 1.83% at $30.65 premarket at the last check Tuesday.
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