BP LOSS $583 MLN
BP's first-quarter replacement cost (RC) loss was $485 million, compared with a profit of $2,103 million a year ago. After adjusting for a net charge for non-operating items of $778 million and net unfavourable fair value accounting effects of $239 million (both on a post-tax basis), underlying RC profit for the first quarter was $532 million, compared with $2,577 million for the same period in 2015. Cumulative restructuring charges from the beginning of the fourth quarter 2014 totalled $1.9 billion by the end of the first quarter 2016.
All amounts, including finance costs, relating to the Gulf of Mexico oil spill have been treated as non-operating items, with a net pre-tax charge of $917 million for the first quarter. The charge before interest and tax relating to the Gulf of Mexico oil spill is now reported in Other businesses and corporate, comparative amounts are also shown on this basis.
On 22 March, a motion to approve the Consent Decree relating to the agreements in principle to settle all outstanding federal and state claims arising from the 2010 Deepwater Horizon oil spill was filed by the US government with the district court. On 4 April, the district court approved the Consent Decree.
Net cash provided by operating activities for the first quarter was $1.9 billion, the same as the equivalent period in 2015. Excluding amounts related to the Gulf of Mexico oil spill, net cash provided by operating activities for the first quarter was $3.0 billion, compared with $2.5 billion for the same period in 2015.
Net debt at 31 March 2016 was $30.0 billion, compared with $25.1 billion a year ago. The net debt ratio at 31 March 2016 was 23.6%, compared with 21.6% at 31 December 2015 and 18.4% a year ago. Net debt and the net debt ratio are non-GAAP measures. Following approval of the Consent Decree and finalization of the agreements described above, and to allow more flexibility in the current volatile price environment, we will revert to targeting a net debt ratio of 20-30%.
Total capital expenditure on an accruals basis for the first quarter was $4.0 billion, of which organic capital expenditure was $3.9 billion, compared with $4.5 billion for the same period in 2015, of which organic capital expenditure was $4.4 billion. We expect organic capital expenditure to be around $17 billion for 2016.
Disposal proceeds were $1.1 billion for the first quarter, compared with $1.7 billion for the same period in 2015.
The effective tax rate (ETR) on RC profit or loss for the first quarter was 37%, compared with -42% for the same period in 2015. Adjusting for non-operating items and fair value accounting effects and a one-off adjustment as a result of the reduction in the rate of the UK North Sea supplementary charge in 2015, the underlying ETR for the first quarter was 18%, compared with 21% for the same period in 2015. The underlying ETR for the first quarter was lower than a year ago mainly due to changes in the mix of profits and foreign exchange effects from a weaker US dollar.
BP today announced a quarterly dividend of 10.00 cents per ordinary share ($0.600 per ADS), which is expected to be paid on 17 June 2016. The corresponding amount in sterling will be announced on 7 June 2016.
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BLOOMBERG - While Europe as a whole gets more than a third of its gas from Russia, that share is lower in the U.K., which receives the bulk of its fuel from North Sea fields and Norway. Still, Moscow-based Gazprom PJSC was the second-biggest supplier to major industrial consumers in the U.K. last year, according to Britain’s energy regulator Ofgem.
FT - of the six LNG tankers that have made deliveries into the UK so far in 2018 three have carried cargoes originally from Russia, leading to questions about whether Moscow was gaining a foothold in the UK gas market after starting up the Yamal LNG facility in Siberia late last year.
REUTERS - So far this year, two Yamal cargoes unloaded at British terminals for domestic consumption, accounting for about a third of Britain’s 2018 LNG imports after typical supplier Qatar pre-sold the bulk of its winter output to Asia last year.
REUTERS - U.S. West Texas Intermediate (WTI) crude futures CLc1 were at $60.77 a barrel at 0753 GMT, up 6 cents, or 0.1 percent, from their previous settlement. Brent crude futures LCOc1 were at $64.62 per barrel, down just 2 cents from their last close.