BP profits more than double on strong oil and gas output

BP said Tuesday profits more than doubled topping the company's expectations following increased oil and gas output.

BP reported underlying profits on a replacement cost (RC) basis -- a closely watched measure to gauge performance -- of $12.7bn for 2018, compared with $6.2bn a year earlier. That topped its consensus forecasts for underlying RC profit of $11.88bn.

For the fourth quarter, BP booked underlying RC profit of $3.5 billion, up from $2.1 billion for the same period of 2017.

Upstream production, which excluded the company's share of Rosneft output, rose 8.2% from a year ago.

BP generated proceeds of $3.5bn from selling assets last year and said it intended to complete more than $10bn of sales over the next two years.

The company flagged a non-operating charge of $1.19bn, compared with a $527m charge in 2017, the company said.

Operating cash flow, excluding Gulf of Mexico oil spill payments, rose to £26.1bn compared with £24.1bn in 2017. Gulf of Mexico oil spill payments in 2018 declined to $3.2bn, from $5.2bn billion a year earlier.

BP expected 2019 organic capital expenditure to be in the range of $15-17bn.

The dividend was increased by 2.5% to 10 cents per share.

'We expect full-year 2019 underlying production to be higher than 2018 due to major projects. The actual reported outcome will depend on the exact timing of project start-ups, acquisition and divestment activities, OPEC quotas and entitlement impacts in our production-sharing agreements,' the company said.

'We expect first-quarter 2019 reported production to be flat with fourth-quarter 2018 with divestments of assets in the North Sea and Alaska and turnaround and maintenance activities mainly in the high margin Gulf of Mexico region, offset by major project start-ups and the benefit of the BHP assets acquired by BPX Energy.'