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BP Beats On Earnings, Announces Buybacks, Guides For Stable CapEx

ENERGY SECTOR


  • Q4 adj-EBIT for Q4 fell 34% YoY to USD 6.13bn though still beat consensus USD 5.87bn with a beat in oil production/operations offsetting misses in gas & carbon, customers & products and other businesses & corporates.
  • BP announced a USD 3.5bn share buyback for H124 and plans share buybacks of at least USD 14bn through 2025.
  • Net Debt fell to USD 20.9bn from USD 21.4bn at FY22 despite a 31% YoY decrease in OCF (though OCF still of USD 9.4 still beat consensus of USD 8.4bn).
  • In Q124, BP expects higher upstream production, lower customer business volumes without Q4's one-offs, sensitive fuels margins, reduced refinery activity, and lower refining margins due to narrow North American crude differentials in Q1 2024.
  • For FY24, BP sees slightly higher upstream production in 2024, with a capital expenditure of around USD 16bn focused in H1 (in line with FY23 and the MT target of USD 14-18bn), divestment proceeds of USD 2-3bn towards H2, and Gulf of Mexico spill payments of USD 1.2bn, including USD 1.1bn in Q2.
  • Most bonds yet to stream, those that have are broadly flat to midswaps while their 5y CDS has opened +0.3bps at 57.4bps.

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