BP reported better-than-expected figures for the first quarter, after a period of strong commodity prices and promising demand outlook
The company’s Q1 underlying replacement cost profit (calculated internally and showing what it’s believed to be an accurate reading of BP’s profit position) came in at $2.6 billion. Analysts were looking for a profit of $1.4 billion. The figures are significantly higher than reported during the first and fourth quarters of 2020 - $791 million, and $115 million, respectively. Moreover, the company generated a surplus cash flow of $1.7 billion, reaching its debt target a year early than scheduled. Also, BP intends to resume its buyback program at the cost of around $500 million.
For Q2, British Petroleum announced that its cash flow could be impacted by the $1.2 billion pre-tax annual the Gulf of Mexico oil spill payment. The payments refer to the worst oil spill in the US. On April 20, 2010, while operating in the Gulf of Mexico, its drilling rig Deepwater Horizon exploded. It resulted in the death of 11 workers, and millions of barrels of crude oil spilt into the Gulf for 87 days.
During the London trading hours, British Petroleum shares went up more than 2%. Year-to-date, the price gained over 16%.