BP’s quarterly profit hits five-year high

UK-based energy giant and LNG player BP reported a surge in profit during the third quarter, hitting the highest quarterly figure in over five years.

Underlying replacement cost profit, the company’s version of net profit, for the third quarter of 2018 was $3.8 billion, more than double a year earlier when the net profit reached $1.8 billion, the company said in a report.

Speaking of the results, BP’s CFO Brian Gilvary noted that the company’s “underlying result was significantly higher than the second quarter in a very similar price environment.”

During the quarter, BP agreed to purchase BHP Billiton’s interest in the Eagle Ford, Haynesville, Permian and Fayetteville onshore US oil and gas assets for $10.8 billion.

“Since we announced the BHP transaction, oil prices have firmed to levels significantly above the acquisition assumptions. While oil prices remain at these levels, we expect to finance the transaction fully using cash,” Gilvary added.

BP expects to close the acquisition of BHP Billiton’s U.S. shale business on October 31.

The company’s production for the quarter was 2,460mboe per day, flat with the third quarter of 2017.

Upstream underlying production, which excludes Rosneft and is adjusted for portfolio changes and pricing effects, was 6.8% higher than a year earlier, driven by the ramp-up of new projects.

Looking ahead, BP expects fourth-quarter reported production to be higher than the third quarter due to the acquisition of BHP assets.