BP

By Joe Hoppe

BP PLC on Tuesday reported an on-quarter slip in third-quarter underlying replacement cost profit, but significantly outperformed expectations, declared a further quarterly share buyback and said it expects upstream production to rise for 2022.

The FTSE 100 energy group said it is planning an additional $2.5 billion share buyback before its fourth-quarter results and that it expects upstream reported production to slip slightly on quarter in the fourth quarter, but to slightly rise for the full-year when compared to 2021.

BP added that the board remains committed to using 60% of 2022 surplus cash flow for share buybacks.

The British oil-and-gas major made an underlying replacement cost profit of $8.15 billion in the three months through the end of September, down from $8.45 billion in the previous quarter due to weaker refining margins, average oil trading results and lower liquids realizations, though offset by exceptional gas marketing and trading results and higher gas realizations.

Underlying replacement cost profit significantly beat the $3.32 billion reported in the third quarter of 2021, and was above a market consensus of $6.14 billion, provided by the company and averaged from the forecasts of 29 analysts.

The company swung to a net loss of $2.16 billion, reflecting inventory losses net of tax of $2.2 billion, and a charge for adjusting items net of tax of $8.1 billion, primarily due to further increases in forward gas prices compared to the end of the second quarter. This compares with a net profit of $9.26 billion in the immediately prior quarter, it said.

Sales and other operating revenue fell to $55.01 billion from $67.87 billion, BP said.

The company said it expects oil prices, gas prices and refining margins to remain elevated during the fourth quarter, largely due to the reduced supply of Russian products amid sanctions.

The board declared a dividend of 6.006 cents a share, flat on the prior quarter.

Write to Joe Hoppe at joseph.hoppe@wsj.com

(END) Dow Jones Newswires

November 01, 2022 03:55 ET (07:55 GMT)

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