BP today smashed City profit forecasts with its best results for five years and it now intends to pay for its purchase of BHP’s US shale assets in cash.
In the three months to September, profits doubled from a year ago to $3.8 billion (£3 billion).
The rising oil price is partly to thank, but BP says that more importantly it is managing to mine oil at lower prices. Bob Dudley, chief executive since 2010, said: “Operations are running well across BP and we’re bringing new higher-margin barrels into production faster.”
The highest quarterly profit since 2013 means BP can use some of the cash it is throwing off to buy seal the BHP deal. Originally it said the $10.5 billion acquisition would be half in shares. It now says it will pay for the whole lot in cash, a sign of confidence in its balance sheet.
The dividend of 10.25 cents a share, vital to UK pension funds, is as expected.
Last week academics said there could be another 17 billion barrels of oil left in UK waters, on top of the 43 billion produced since the Seventies. BP says its commitment to the North Sea is as strong as ever.
Shares in the business rose 21.3p, or 3.98%, to 556.5p, leaving it valued at £111 billion. They were 597p at the start of this month.
