REG - BP PLC - 1Q26 BP plc Trading Statement Part 1 of 1

BPAnnouncement

Today 07:02

For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20260414:nRSN2787Aa&default-theme=true

RNS Number : 2787A  BP PLC  14 April 2026

 FOR IMMEDIATE RELEASE
 London 14 April 2026
 BP p.l.c. Trading Statement

 

First quarter 2026 trading statement

The following Trading Statement provides a summary of BP p.l.c.'s (bp) current
estimates and expectations for the first quarter of 2026, 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 first quarter 2026 and is not an estimate of those
results.

Also refer to bp's fourth quarter and full year 2025 group results
announcement on 10 February 2026 for first quarter and full year 2026 guidance
items which continue to apply unless explicitly stated. A summary of that
guidance is 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. See the Glossary for a
definition of guidance items included in this Trading Statement.

bp's group results for the first quarter 2026 are scheduled to be published on
28 April 2026.

Updated 1Q26 guidance

These estimates and expectations include impacts associated with the ongoing
situation in the Middle East and the current market conditions resulting in
heightened volatility in crude oil, natural gas and refined products prices in
the latter part of the first quarter. These market conditions are expected to
impact financial results, including trading results and working capital
movements, increase the dislocation between marker prices versus actual prices
realized by bp in 1Q 2026, and increase the impact of price lags(a).

Earnings considerations for 1Q 2026 underlying RC profit before interest and
tax, relative to 4Q 2025:

•       Reported upstream production in the first quarter is expected
to be broadly flat compared to the fourth quarter 2025 (2,344 mboe/d). Within
this,

◦       gas & low carbon energy is expected to be slightly higher
compared to the fourth quarter 2025 (788 mboe/d).

◦       oil production & operations is expected to be slightly
lower compared to the fourth quarter 2025 (1,555 mboe/d) including price
impacts on PSA and TSC entitlement volumes.

•       Gas & low carbon energy segment: realizations are expected
to be broadly flat compared to the prior quarter. These include the impact of
price lags(a) and the changes in non-Henry Hub natural gas marker prices. The
gas marketing and trading result is expected to be average (fourth quarter
2025 average).

•       Oil production & operations segment: realizations are
expected to have an impact compared to the prior quarter in the range of +$0.1
to 0.2 billion. These include the significant impact of the price lags(a) on
bp's production, particularly in the Gulf of America and the UAE where
production is priced on one and two month lagged basis respectively. Compared
to the prior quarter, reflecting production mix, cash costs are $0.1 billion
higher and DD&A charge is broadly flat (fourth quarter 2025 $2.0 billion)
due to a higher unit charge.

•       Customers & products segment: compared to the prior
quarter, results are expected to reflect the following factors:

◦       customers - seasonally lower volumes and lower retail fuels
margins, more than offset by stronger midstream performance.

◦       products - stronger realized refining margins in the range of
+$0.1 to 0.2 billion and a lower impact from turnaround activity. The oil
trading result is expected to be exceptional (fourth quarter 2025 weak).

Other financial considerations for 1Q 2026

•       The group underlying effective tax rate for the first quarter
is expected to be around 35%, reflecting the higher results in products.

•       Capital expenditure in the first quarter is expected to be
broadly flat with the organic capital expenditure in the fourth quarter 2025
($3.5 billion).

•       Net debt at the end of the first quarter is expected to be in
the range of $25 to 27 billion compared to the end of the fourth quarter 2025
($22.2 billion). This is driven primarily by a significant working capital
build in the range of $4 to 7 billion, largely due to the price environment.

(a.      ) See Trading conditions and rules of thumb section below.

 

Underlying replacement cost (RC) profit before interest and tax, underlying
effective tax rate, organic capital expenditure, net debt, working capital
(after adjusting for inventory holding gains, fair value accounting effects
and other adjusting items) and underlying operating expenditure are non-IFRS
measures.

( )

Trading conditions and rules of thumb

The marker prices and margins below do not represent the actual prices or
margins realized by bp during the given periods.

 

•       Brent averaged $81.13/bbl in the first quarter 2026 compared
to $63.73/bbl in the fourth quarter 2025.

•       US gas Henry Hub first of month index averaged $5.05/mmBtu in
the first quarter 2026 compared to $3.55/mmBtu in the fourth quarter 2025.

•       The bp RIM averaged $16.9/bbl in the first quarter 2026
compared to $15.2/bbl in the fourth quarter 2025.

 

Rules of thumb below are intended to give directional indicators of the impact
of changes in the trading environment on bp's 2026 full-year pre-tax results.
These rules of thumb are approximate and based upon bp's current portfolio of
oil and gas businesses. The weighting of the rules of thumb for Brent and
Henry Hub is an approximate split of 80% to oil production & operations
and 20% to gas & low carbon energy.

The relationship between prices and results is not necessarily linear across a
wide range of oil and gas prices. Changes in margins, differentials, seasonal
demand patterns, operational issues, hedge positions and other factors
including timing of acquisition and divestment activity, can also materially
impact the results. Hedging activity impacts the Henry Hub rule of thumb and
as a result should not be treated as representative of the longer-term
sensitivity.

Significant differences between the estimates implied by the application of
the rules of thumb and the actual results themselves may also arise due to
complex mechanisms for calculating government shares of oil and gas revenues
in some jurisdictions, depending on price levels.

The bp Refining Indicator Margin rule of thumb reflects the sensitivity of the
group's results to changes in refining margins. However, actual margins
realized by bp may vary due to a variety of factors, including the actual mix
of a crude and product for a given quarter.  Under the current market
conditions, and resulting heightened volatility in commodity and refined
product prices, crude differentials, transportation costs and product mix may
vary significantly. See Refining Indicator Margin
(https://www.bp.com/en/global/corporate/investors/regulatory-news-updates-and-filings/trading-conditions-update/refining-indicator-margin.html)
link for more information.

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)

 

Rules of thumb

 Operating environment rules of thumb for the full year 2026  Impact on pre-tax replacement cost operating profit
 Oil price(a)                                                 $340m

 Brent +/- $1/bbl
 Natural gas price(a)                                         $40m

 Henry Hub +/- $0.10/mmBtu
 Refining indicator margin                                    $550m

 RIM +/- $ 1/bbl

(a.      ) Combined indicator for oil production & operations and
gas & low carbon energy.

( )

(
)

Appendix

Select financial and operating metrics

                                                                                4Q25 reported  1Q26 updated outlook
 upstream production(a) (mboe/d)                                                2,344          broadly flat
 oil production & operations production (mboe/d)                                1,555          slightly lower
 gas & low carbon energy production (mboe/d)                                    788            slightly higher
 Gas marketing and trading result                                               average        average
 oil production & operations depreciation, depletion & amortization ($          2.0            broadly flat
 billion)
 Oil trading result                                                             weak           exceptional
 Net debt ($ billion)                                                           22.2           25 to 27
 Organic capital expenditure ($ billion)                                        3.5            broadly flat

(a.      ) Because of rounding, upstream production may not agree
exactly with the sum of gas & low carbon energy and oil production &
operations.

( )

Guidance issued in 4Q25 Stock Exchange Announcement(a)

 Guidance Area                              Full Year 2026                                                                   1Q26 vs 4Q25
 Reported and underlying                    Reported upstream production to be slightly lower and underlying upstream        Reported upstream production to be broadly flat

                                          production to be broadly flat, of which oil production & operations
  upstream production                       broadly flat and gas & low carbon energy lower
 Customers                                  •   Expect to make continued progress growing cash flows, supported by           Seasonally lower volumes
                                            lower underlying operating expenditure driven by structural cost reductions.
                                            These benefits will be partly offset by the earnings impact of completed and
                                            announced divestments

                                            •   Reported earnings will benefit from lower depreciation as a result of
                                            the assets held for sale accounting treatment of Castrol following the planned
                                            divestment

                                            •   Fuel margins remain sensitive to movements in the cost of supply
 Products                                   Significantly lower level of turnaround activity                                 •   Lower industry refining margins

                                                                                                                             •   Partly offset by a lower level of refinery turnaround activity
 OB&C                                       Around $1bn charge
 DD&A                                       Broadly flat
 Underlying effective tax rate(b)           Around 40%
 Capital expenditure                        $13-13.5bn, weighted to the first half                                           Broadly flat
 Divestment and other proceeds              $9-10bn, including ~$6bn from the announced Castrol transaction, all
                                            significantly weighted to the second half
 Gulf of America oil settlement payments    ~$1.6bn pre-tax including $0.4bn  in 1Q and $1.1bn 2Q

(a       ) Refer to bp's fourth quarter and full year 2025 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.

( )

( )

( )

( )

( )

( )

 

 

 

 

Glossary

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.

Net debt and gearing are non-IFRS measures. Net debt is calculated as finance
debt, as shown in the balance sheet, plus the fair value of associated
derivative financial instruments that are used to hedge foreign currency
exchange and interest rate risks relating to finance debt, for which hedge
accounting is applied, less cash and cash equivalents. Net debt does not
include accrued interest, which is reported within other receivables and other
payables on the balance sheet and for which the associated cash flows are
presented as operating cash flows in the group cash flow statement. Gearing is
defined as the ratio of net debt to the total of net debt plus total equity.
bp believes these measures provide useful information to investors. Net debt
enables investors to see the economic effect of finance debt, related hedges
and cash and cash equivalents in total. Gearing enables investors to see how
significant net debt is relative to total equity. The derivatives are reported
on the balance sheet within the headings 'Derivative financial instruments'.
The nearest equivalent measures on an IFRS basis are finance debt and finance
debt ratio. A reconciliation of finance debt to net debt is provided in the
Stock Exchange Announcement.

We are unable to present reconciliations of forward-looking information for
net debt or gearing to finance debt and total equity, because without
unreasonable efforts, we are unable to forecast accurately certain adjusting
items required to present a meaningful comparable IFRS forward-looking
financial measure. These items include fair value asset (liability) of hedges
related to finance debt and cash and cash equivalents, that are difficult to
predict in advance in order to include in an IFRS estimate.

Organic capital expenditure is a non-IFRS measure. Organic capital expenditure
comprises capital expenditure on a cash basis less inorganic capital
expenditure. bp believes that this measure provides useful information as it
allows investors to understand how bp's management invests funds in developing
and maintaining the group's assets.  The nearest equivalent measure on an
IFRS basis is capital expenditure on a cash basis and a reconciliation to IFRS
information is provided in the Stock Exchange Announcement.

Production-sharing agreement/contract (PSA/PSC) is an arrangement through
which an oil and gas company bears the risks and costs of exploration,
development and production. In return, if exploration is successful, the oil
company receives entitlement to variable physical volumes of hydrocarbons,
representing recovery of the costs incurred and a stipulated share of the
production remaining after such cost recovery.

Replacement cost (RC) profit or loss reflects the replacement cost of
inventories sold in the period and is calculated as profit or loss
attributable to bp shareholders, adjusting for inventory holding gains and
losses (net of tax). RC profit or loss for the group is a non-IFRS measure.
The nearest equivalent measure on an IFRS basis is profit or loss attributable
to bp shareholders.

Realizations are the result of dividing revenue generated from hydrocarbon
sales, excluding revenue generated from purchases made for resale and royalty
volumes, by revenue generating hydrocarbon production volumes. Revenue
generating hydrocarbon production reflects the bp share of production as
adjusted for any production which does not generate revenue. Adjustments may
include losses due to shrinkage, amounts consumed during processing, and
contractual or regulatory host committed volumes such as royalties. For the
gas & low carbon energy and oil production & operations segments,
realizations include transfers between businesses and are based on sales by
consolidated subsidiaries only - this excludes equity-accounted entities.

Refining indicator margin (RIM) is a simple indicator of the weighted average
of bp's crude slate and product yield as deemed representative for each
refinery. Actual margins realized by bp may vary due to a variety of factors,
including the actual mix of a crude and product for a given quarter.

Structural cost reduction is calculated as decreases in underlying operating
expenditure as a result of operational efficiencies, divestments, workforce
reductions and other cost saving measures that are expected to be sustainable
compared with 2023 levels. The total change between periods in underlying
operating expenditure will reflect both structural cost reductions and other
changes in spend, including market factors, such as inflation and foreign
exchange impacts, as well as changes in activity levels and costs associated
with new operations. Estimates of cumulative annual structural cost reduction
may be revised depending on whether cost reductions realized in prior periods
are determined to be sustainable compared with 2023 levels. Structural cost
reductions are stewarded internally to support management's oversight of
spending over time. bp believes this performance measure is useful in
demonstrating how management drives cost discipline across the entire
organization, simplifying our processes and portfolio and streamlining the way
we work. The nearest IFRS measures are production and manufacturing expenses
and distributions and administration expenses.

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.

Underlying operating expenditure is a non-IFRS measure and a subset of
production and manufacturing expenses plus distribution and administration
expenses and excludes costs that are classified as adjusting items. It
represents the majority of the remaining expenses in these line items but
excludes certain costs that are variable, primarily with volumes (such as
freight costs). Other variable costs are included in purchases in the income
statement. Management believes that underlying operating expenditure is a
performance measure that provides investors with useful information regarding
the company's financial performance because it considers these expenses to be
the principal operating and overhead expenses that are most directly under
their control although they also include certain foreign exchange and
commodity price effects. The nearest IFRS measures are production and
manufacturing expenses and distribution and administration expenses.

Underlying production - 2026 underlying production, when compared with 2025,
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 a non-IFRS measure and 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. 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 above. 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.

upstream includes oil and natural gas field development and production within
the gas & low carbon energy and oil production & operations segments.
Upstream production includes bp's share of equity-accounted entities.

Working capital is movements in inventories and other current and non-current
assets and liabilities as reported in the condensed group cash flow statement.

Change in working capital adjusted for inventory holding gains/losses, fair
value accounting effects relating to subsidiaries and other adjusting items is
a non-IFRS measure. It is calculated by adjusting for inventory holding
gains/losses reported in the period; fair value accounting effects relating to
subsidiaries reported within adjusting items for the period; and other
adjusting items relating to the non-cash movement of US emissions obligations
carried as a provision that will be settled by allowances held as inventory.
This represents what would have been reported as movements in inventories and
other current and non-current assets and liabilities, if the starting point in
determining net cash provided by operating activities had been underlying
replacement cost profit rather than profit for the period. The nearest
equivalent measure on an IFRS basis for this is movements in inventories and
other current and non-current assets and liabilities.

bp utilizes various arrangements in order to manage its working capital
including discounting of receivables and, in the supply and trading business,
the active management of supplier payment terms, inventory and collateral.

(
)

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): the extent and duration of the impact
of current geopolitical and market conditions including price fluctuations in
crude oil, natural gas and refined products; 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 or
disruptions to supply; 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, regional conflicts including the
Middle East conflict 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 2025 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 first quarter of 2026 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.

 

Contacts

                     London                Houston

 Press Office        Rita Brown            Paul Takahashi
                     +44 (0) 7787 685821    +1 713 903 9729

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

 

BP p.l.c.'s LEI Code 213800LH1BZH3DI6G760

 

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  TSTFZGMDRFGGVZM



            Copyright 2019 Regulatory News Service, all rights reserved