REG - BP PLC - 4Q24 bp Trading Statement Part 1 of 1

BPAnnouncement

14/01/2025 07:00

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RNS Number : 1626T  BP PLC  14 January 2025

 FOR IMMEDIATE RELEASE
 London 14 January 2025
 BP p.l.c. Trading Statement

 

Fourth quarter 2024 trading statement

The following Trading Statement provides a summary of BP p.l.c.'s (bp) current
estimates and expectations for the fourth quarter of 2024, including data on
the economic environment as well as group performance during the period.

The information presented is not comprehensive of all factors which may impact
bp's group results for the fourth quarter 2024 and is not an estimate of those
results. Also refer to bp's third quarter and nine months 2024 group results
announcement on 29 October 2024 for fourth quarter and full year 2024 guidance
items which continue to apply unless explicitly stated. A summary of that
guidance is also provided in the Appendix to this Trading Statement. All
information provided is subject to the finalization of bp's financial
reporting processes and actual results may vary.

Murray Auchincloss has recently undergone a planned medical procedure from
which he is recovering well. He will be back in the office by February. To
ensure his full recuperation the capital markets event previously scheduled
for 11 February in New York will now take place on 26 February in London. The
fourth quarter and full year 2024 results date is unchanged and they are
expected to be published at 0700 GMT on 11 February.

Updated 4Q24 guidance(a)

•      Upstream production(b) in the fourth quarter is expected to be
lower compared to the prior quarter, with production lower in oil production
& operations and in gas & low carbon energy.

•      In the gas & low carbon energy segment, realizations(c),
compared to the prior quarter, are expected to have a favourable impact in the
range of $0.1 - 0.2 billion including changes in non-Henry Hub natural gas
marker prices. The gas marketing and trading result is expected to be average.

•      In the oil production & operations segment, realizations(c),
compared to the prior quarter, are expected to have an unfavourable impact in
the range of $0.2 - 0.4 billion, including the impact of price lags on bp's
production in the Gulf of Mexico and the UAE. Compared to the prior quarter,
exploration write-offs are expected to be $0.1 - 0.2 billion lower.

•      In the customers & products segment, compared to the prior
quarter, results are expected to be impacted by the following factors:

◦     customers - seasonally lower volumes, lower fuels margins, foreign
exchange losses, and a one-off inventory purchase price adjustment relating to
our bio-ethanol acquisition.

◦     products - weaker realized refining margins in the range of $0.1 -
0.3 billion and a higher impact from turnaround activity. The oil trading
result is expected to be weak.

•      Other items:

◦     Net debt at the end of the quarter is expected to be lower
compared the prior quarter, including proceeds from divestments of around $2.8
billion, the issuance of around $2.5 billion perpetual hybrid bonds primarily
in anticipation of refinancing perpetual hybrid bonds callable from June 2025
and/or March 2026, and acquired net debt of around $3.0 billion from the
completion of the bp Bunge Bioenergia and Lightsource bp transactions.

◦     The fourth quarter results are expected to include non-cash,
post-tax charges related to impairments of $1.0 - 2.0 billion attributable
across the segments. These items are treated as adjusting items and excluded
from underlying replacement cost profit.

Updated FY24 guidance(a)

•      The underlying effective tax rate for the full year is now
expected to be around 42% compared to the previous guidance of around 40%
primarily due to changes in the geographical mix of profits.

•      bp now expects other businesses & corporate underlying
annual charge to be around $0.6 billion for 2024 compared to the previous
range of $0.3 - 0.4 billion due to foreign exchange losses.

(a               ) All impacts influence bp's underlying RC
profit before interest and tax, unless stated otherwise.

(b               ) Includes bp's share of production of
equity-accounted entities.

(c               ) Realizations are based on sales by
consolidated subsidiaries only - this excludes equity-accounted entities.

Trading conditions

Brent averaged $74.73/bbl in the fourth quarter 2024 compared to $80.34/bbl in
the third quarter 2024.

US gas Henry Hub first of month index averaged $2.79/mmBtu in the fourth
quarter 2024 compared to $2.15/mmBtu in the third quarter 2024.

The bp RMM* averaged $13.1/bbl in the fourth quarter 2024 compared to
$16.5/bbl in the third quarter 2024.

Further information on prices and bp's current rules of thumb can be found at
the following link: bp.com Rules of Thumb
(https://www.bp.com/en/global/corporate/investors/regulatory-news-updates-and-filings/trading-conditions-update.html)

( )

 

 

 

Cautionary Statement

In order to utilize the 'safe harbor' provisions of the United States Private
Securities Litigation Reform Act of 1995 (the 'PSLRA') and the general
doctrine of cautionary statements, bp is providing the following cautionary
statement: The discussion in this announcement contains certain forecasts,
projections and forward-looking statements - that is, statements related to
future, not past events and circumstances - with respect to the financial
condition, results of operations and businesses of bp and certain of the plans
and objectives of bp with respect to these items. By their nature,
forward-looking statements involve risk and uncertainty because they relate to
events and depend on circumstances that will or may occur in the future and
are outside the control of bp. Actual results or outcomes, may differ
materially from those expressed in such statements, depending on a variety of
factors, including (without limitation): price fluctuations in crude oil and
natural gas; changes in demand for bp's products; currency fluctuations;
drilling and production results; reserves estimates; sales volume and sales
mix numbers; supply and demand imbalances including as a result of direct or
indirect restrictions on production; regional pricing differentials and
refining margins; seasonal impacts on product demand and operating expenses;
resolution of trading and derivative positions for the quarter; the timing and
level of maintenance and/or turnaround activity; the timing and volume of
refinery additions and outages; the timing of bringing new fields onstream;
natural disasters and adverse weather conditions; changes in public
expectations and other changes to business conditions; wars and acts of
terrorism; cyber-attacks or sabotage as well as those factors discussed under
"Risk factors" in bp's Annual Report and Form 20-F 2023 and under "Principal
risks and uncertainties" in bp's Report on Form 6-K for the three months and
six months ended 30 June 2024, each as filed with the US Securities and
Exchange Commission. Furthermore, additional factors may exist that will be
relevant to bp's group results for the fourth quarter and full year of 2024
that are not currently known or fully understood. Neither bp nor any of its
subsidiaries assumes any obligation to update, revise or supplement any
forward-looking statement contained in this announcement to reflect future
circumstances, events or information.

The contents of websites referred to in this announcement do not form part of
this announcement.

 FOR IMMEDIATE RELEASE
 London 14 January 2025
 BP p.l.c. Trading Statement

 

Appendix: Guidance issued in 3Q24 Stock Exchange Announcement(a)

 Guidance Area                                       Full Year 2024                                                                  4Q24 vs 3Q24
 Reported and underlying* upstream production        Slightly higher than 2023, of which Oil production & operations higher and      •       lower
                                                     Gas & low carbon energy lower
 Customers                                           Growth from convenience, including a full year contribution from TravelCenters  •       seasonally lower volumes
                                                     of America; stronger Castrol, bp pulse margin growth; fuels margins to remain

                                                     sensitive to movements in cost of supply                                        •       fuels margins to remain sensitive to movements in the cost of
                                                                                                                                     supply

 Products                                            Lower level of industry refining margins, with realized margins impacted by     •       realized refining margins to remain low in the fourth quarter,
                                                     narrower North American heavy crude oil differentials; turnaround activity      albeit to continue to remain sensitive to relative movements in product cracks
                                                     broadly in line with 2023 but heavily weighted towards the second half, with
                                                     the highest impact in the fourth quarter
 OB&C                                                Around $0.3-0.4bn charge
 DD&A                                                Slightly higher than 2023
 Underlying effective tax rate*(b)                   Expected to be around 40%
 Capital expenditure*                                Around $16bn
 Divestment and other proceeds                       Greater than $3bn
 bp Bunge Bioenergia and Lightsource bp transaction                                                                                  Full earnings from both companies will be included in bp's results from the
                                                                                                                                     date the transactions complete and finance debt acquired is expected to be
                                                                                                                                     approximately $3.7 billion.
 Gulf of Mexico oil spill payments                   ~$1.2bn pre-tax, of which $1.1bn 2Q

(a               ) Refer to bp's third quarter and nine months
2024 group results announcement and bp.com for full text.

(b               ) Underlying effective tax rate is sensitive
to a range of factors, including the volatility of the price environment and
its impact on the geographical mix of the group's profits and losses.

*        See Glossary.

Contacts

                     London                Houston

 Press Office        David Nicholas        Paul Takahashi
                     +44 (0) 7831 095541    +1 713 903 9729

 Investor Relations  Craig Marshall        Graham Collins
 bp.com/investors    +44 (0) 203 401 5592  +1 832 753 5116

Glossary

Underlying production - 2024 underlying production, when compared with 2023,
is production after adjusting for acquisitions and divestments, curtailments,
and entitlement impacts in our production-sharing agreements/contracts and
technical service contract*.

Underlying RC profit or loss before interest and tax for the operating
segments or customers & products businesses is calculated as RC profit or
loss including profit or loss attributable to non-controlling interests before
interest and tax for the operating segments and excluding net adjusting items
for the respective operating segment or business.

bp believes that underlying RC profit or loss is a useful measure for
investors because it is a measure closely tracked by management to evaluate
bp's operating performance and to make financial, strategic and operating
decisions and because it may help investors to understand and evaluate, in the
same manner as management, the underlying trends in bp's operational
performance on a comparable basis, period on period, by adjusting for the
effects of these adjusting items. The nearest equivalent measure on an IFRS
basis for the group is profit or loss attributable to bp shareholders. The
nearest equivalent measure on an IFRS basis for segments and businesses is RC
profit or loss before interest and taxation.

Underlying effective tax rate (ETR) is a non-IFRS measure. The underlying ETR
is calculated by dividing taxation on an underlying replacement cost (RC)
basis by underlying RC profit or loss before tax. Taxation on an underlying RC
basis for the group is calculated as taxation as stated on the group income
statement adjusted for taxation on inventory holding gains and losses and
total taxation on adjusting items. Information on underlying RC profit or loss
is provided below. Taxation on an underlying RC basis presented for the
operating segments is calculated through an allocation of taxation on an
underlying RC basis to each segment. bp believes it is helpful to disclose the
underlying ETR because this measure may help investors to understand and
evaluate, in the same manner as management, the underlying trends in bp's
operational performance on a comparable basis, period on period. Taxation on
an underlying RC basis and underlying ETR are non-IFRS measures. The nearest
equivalent measure on an IFRS basis is the ETR on profit or loss for the
period.

Capital expenditure is total cash capital expenditure as stated in the
condensed group cash flow statement. Capital expenditure for the operating
segments, gas & low carbon energy businesses and customers & products
businesses is presented on the same basis.

Technical service contract (TSC) - Technical service contract is an
arrangement through which an oil and gas company bears the risks and costs of
exploration, development and production. In return, the oil and gas company
receives entitlement to variable physical volumes of hydrocarbons,
representing recovery of the costs incurred and a profit margin which reflects
incremental production added to the oilfield.

BP p.l.c.'s LEI Code 213800LH1BZH3D16G760

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