BP stock performance
BP (BP) announced its third-quarter earnings results on October 30. On the day, BP stock opened at $42.0, higher than its previous day’s close of $41.0. BP stock saw a high of $42.3 and a low of $41.5 on the day. Eventually, the stock closed at $42.2, ~2.9% higher than its previous day’s close.
The rise in BP stock was apparently the result of the company’s surpassing its third-quarter estimates. Also, its adjusted underlying earnings touched a five-year high. On the day, BP’s peers’ stocks also rose, and equity markets strengthened.
BP’s peers ExxonMobil (XOM), Chevron (CVX), and Royal Dutch Shell (RDS.A) rose 2.2%, 1.8%, and 2.2%, respectively, on October 30. The SPDR S&P 500 ETF (SPY), which resembles the S&P 500 Index, rose 1.5% on the day. However, on October 30, the price of Brent oil fell 1.8%.
BP’s third-quarter update
BP continued its growth activities in the third quarter. The company’s organic capex for the quarter stood at $3.7 billion compared to $4.0 billion in the third quarter of 2017. BP expects its organic capex to total ~$15 billion in 2018. Going forward, from 2018 to 2021, BP expects its organic capex to be between $15 billion and $17 billion per annum.
BP is expected to close on its acquisition of BHP’s premium onshore assets on October 31. This development would strengthen BP’s footprint in the Permian Basin and the Eagleford and Haynesville Basins. The acquisition is expected to add ~4.6 billion barrels of oil equivalent to BP’s upstream portfolio.
On the acquisition of BHP’s onshore assets, BP’s CFO, Brian Gilvary, stated in a press release, “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. In this event, the $5-6 billion divestment programme linked to the transaction will be used to reduce debt.”