28th Jul 2015 08:06
LONDON (Alliance News) - BP PLC Tuesday said it swung to a loss in the first half of 2015 after revenue fell and it booked expected charges related to its long-awaited settlement over the 2010 Deepwater Horizon oil spill in the Gulf of Mexico.
The FTSE 100 oil and gas giant reported a replacement cost loss of USD6.26 billion in the second quarter of 2015, swinging from a USD3.18 billion profit a year earlier.
That brought the replacement cost loss for the first half to USD4.16 billion, also swinging from a USD6.65 billion profit a year earlier.
The first half loss was caused by a fall in revenue, the oil spill settlement and non-operating charges. BP was was hit by USD7.89 billion in non-operating net charges in the first half.
Included in those non-operating net charges is USD487 million of restructuring charges in the first half, but BP warned that restructuring charges for the full year will now be around USD1.50 billion, considerably higher than the USD1.00 billion announced in December.
The recently announced agreements in principle to settle US federal, state and the vast majority of local government claims arising from the Deepwater Horizon accident resulted in BP booking a pretax charge of USD9.80 billion in the second quarter, slightly below the USD10.0 billion expected by analysts. The total cumulative pre-tax charge for the 2010 explosion and oil spill is now USD54.6 billion.
Revenue in the first half totalled USD114.84 billion, falling from USD185.67 billion a year earlier whilst BP's pretax loss for the half was USD6.33 billion after swinging from a USD10.4 billion profit.
Including the impact of the Gulf of Mexico oil spill, net cash provided by operating activities for the second quarter and half year was USD6.30 billion and USD8.10 billion, respectively, compared with USD7.9 billion and USD16.1 billion for the same periods in 2014.
BP said it will pay a quarterly dividend of 10.0 cents per share for the second quarter of 2015.
Net debt at the end of June stood at USD24.8 billion, up from USD24.4 billion a year earlier, pushing up BP's net debt ratio to 18.8% from 15.5%.
Total capital expenditure in the first half totalled USD9.1 billion, of which USD8.90 billion was organic capital expenditure, down from USD11.7 billion a year earlier, which had included USD11.00 billion of organic expenditure. For the full year 2015, BP expects organic capital expenditure to be below USD20.00 billion.
In 2013, BP said it planned to generate USD10.00 billion from divesting from some of its assets before the end of 2015. So far, BP has reached USD7.40 billion, of which USD2.3 billion was achieved in the first half of 2015.
"The external environment remains challenging, but BP moved quickly in response, and we continue to do so. Our work to increase efficiency and reduce costs is embedding sustainable benefits throughout the group, and we continue with capital discipline and divestments," said Chief Executive Bob Dudley.
BP shares were up 0.7% to 390.05 pence per share on Tuesday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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