MOSCOW (MRC) -- BP plc BP reported strong first-quarter 2018 results as oil price has started to recover from the slump witnessed nearly four years back, as per the company press-release.
Record oil and gas production along with increased refinery throughput drove earnings, partially offset by increased exploration expenses. Royal Dutch Shell RDS.A is another European energy giant that reported strong first-quarter profits on Apr 26.
BP reported first-quarter adjusted earnings of 78 cents per American Depositary Share (ADS) on a replacement cost basis, excluding non-operating items. The bottom line surpassed the Zacks Consensus Estimate of 67 cents and the year-ago quarter's 46 cents.
Total revenues were USD69,143 million in the quarter, up from USD56,386 million in the year-ago quarter. The integrated energy major continued to return cash to shareholders through buybacks and dividends payments. Through first-quarter 2018, BP spent USD120 million for buying back 18 million worth of shares.
In the first quarter, total production rose 9% year over year to 2.605 million barrels of oil equivalent per day (MMBoe/d). Ramp-up in key developments primarily aided the record volume. Notably, since the October-to-December quarter of 2010, the first-quarter output has been the highest. On top of that, the January-to-March quarter output marked an increase in production for six quarters in a row.
The company sold liquids at USD61.40 a barrel in the first quarter as compared with USD49.87 in the year-earlier quarter. It sold natural gas at USD3.78 per thousand cubic feet, compared with USD3.50 a year ago. Overall price realization increased to USD41.39 per barrels of oil equivalent (Boe) from the year-ago level of USD37.19.
After adjusting for non-operating items and fair value accounting effects, underlying replacement cost profit before interest and tax for the segment was USD3,157 million, considerably higher than USD1,370 million in the year-ago quarter. Increased realized prices from oil and natural gas and record volumes primarily drove the upside. BP has been pleased with the segment's performance and identified it as the strongest outcome from upstream businesses since the start of the oil weakness in the July-to-September quarter of 2014.
Segmental profits improved to USD1,826 million from USD1,742 million in the year-ago quarter, courtesy of higher refinery throughput. Refining marker margin of USD11.7 per barrel in the first quarter of 2018 was in line with the year-ago quarter. Total refinery throughput rose to 1,761 thousand barrels per day (MB/d) from 1,676 MB/d in the year-earlier quarter. Refining availability was 94.8%, compared with 95.2% in the year-ago quarter.
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The segment recorded profits of USD247 million, up from USD99 million a year ago.
Exploration Expenses
For the first quarter, BP reported exploration costs of USD514 million, up almost 25% from USD412 million in the year-ago quarter.
Financials
BP's net debt was USD39,993 million at the end of the first quarter, higher than USD38,635 million in the year-ago quarter. Net debt ratio was 28.1%, marginally higher than 28% in the prior-year quarter.
Q1 Price Performance
During first-quarter 2018, BP lost 3.5%, faring better than the industry's 4.1% decline.
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