Oil major BP (BP.) is clearly feeling pretty confident as it ups the dividend for the first time in four years and unveils a $10.5bn deal to secure substantial US shale assets from BHP Billiton (BLT).

The modest 2.5% increase in the quarterly dividend to 10.25 cents per share accompanied results for the three months to 30 June which beat expectations (31 Jul).

This beat is impressive given many analysts will have already increased their forecasts to factor in higher oil prices. It also comes off the back of weaker than expected second quarter numbers from BP’s US rivals Chevron and ExxonMobil as well as UK counterpart Royal Dutch Shell (RDSB).

With the big step out in US shale, investors will hope chief executive Bob Dudley is not departing too far from the template which helped steady the ship during his near eight year tenure. Dudley look over in the wake of the highly damaging Gulf of Mexico oil spill back in April 2010.

Encouragingly the BHP transaction is expected to boost cash flow and earnings from the get go and the company has pledged to maintain gearing below 30%. (TS)

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