BP Asset Sales In Egypt, Trinidad Weigh On Q1 Production As Profit Falls

BP PLC BP shares are trading lower on Tuesday after the company reported first-quarter fiscal 2025 results.

Sales and other operating revenues came in at $46.905 billion, beating the consensus of $40.12 billion.

Hydrocarbon production declined 16.5% year over year (Y/Y) to 764 mboe/d, with underlying production declining 6.1% Y/Y mainly due to asset divestment in Egypt and Trinidad in the fourth quarter of 2024.

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Adjusted EBITDA declined to $8.70 billion from $10.31 billion a year ago. Underlying RC profit declined to $1.38 billion from $2.72 billion a year ago.

Underlying RC profit per American Depositary Share (ADS) came in at 53 cents, missing the consensus of 69 cents.

Operating cash flow was $2.83 billion, compared to $5.01 billion in the prior-year quarter.

Capital expenditures were $3.62 billion compared to $4.28 billion a year ago. Net debt rose from $24 billion to $27 billion.

CEO Murray Auchincloss noted that the BP started “three major projects” and “made six exploration discoveries.” The company boasts “95% upstream plant reliability supporting the best operating efficiency on record, and over 96% refining availability.”

CFO Kate Thomson added, ”We continue to optimize investment plans and now expect 2025 capital expenditure of around $14.5 billion. We are also making good progress on divestments and now expect proceeds of $3-4 billion this year. This underpins our confidence in meeting our net debt target of $14-18 billion by the end of 2027.”

Dividend: BP disclosed an interim dividend of 8 cents per ordinary share, payable on June 27.

Repurchase: The company completed previously announced $1.75 billion in share buybacks on April 25.

Furthermore, BP plans to conduct a $750 million share buyback before its second-quarter earnings release.

Second-Quarter FY25 Outlook: BP anticipates upstream production to be broadly flat compared to the first quarter of 2025.

In its customer business, BP projects sequentially seasonally higher volumes, with fuel margins likely remaining sensitive to supply cost fluctuations.

In the products segment, BP expects refining margins to remain sensitive to the economic outlook and expects a higher level of planned refinery turnaround activity compared to the first quarter.

FY25 Guidance: BP expects reported upstream production to be lower and underlying upstream production slightly lower than the prior year.

The company expects capital expenditures of about $14.5 billion in 2025 and around $13 billion—$15 billion in 2026 and 2027.

The company sees Gulf of America settlement payments for the year to be about $1.2 billion pre-tax, including $1.1 billion pre-tax to be paid during the second quarter.

Investors can gain exposure to the stock via Precidian ETFs Trust BP plc ADRhedged BPH and Texas Capital Texas Oil Index ETF OILT.

Price Action: BP shares are down 3.78% at $28.03 premarket at the last check Tuesday.

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