BP to Complete Divestments Worth $10 Billion Ahead of Schedule
11 Ottobre 2019 - 12:10PM
Dow Jones News
By Oliver Griffin
Integrated oil-and-gas giant BP PLC (BP.LN) expects to have
finalized its planned two-year divestment program by the end of
this year, ahead of schedule, although its third-quarter results
will take a hit from related charges.
The company said Friday that it expects to deliver proceeds and
announced transactions worth a total of $10 billion as part of the
divestment program it announced in the wake of its 2018 all-cash
purchase of onshore U.S. assets previously owned by miner BHP Group
PLC (BHP.LN) by the end of the year.
It said strong progress in delivering the program was driven by
the sale of its Alaska assets to Hilcorp Energy Co. for $5.6
billion. The transaction, the largest in the divestment program, is
expected to be completed in 2020. The company has also agreed the
sale of four packages of gas assets from its business in the lower
48 U.S. states.
BP said that agreed divestments are expected to result in a
non-cash post-tax charge in the region of $2 billion to $3 billion
for its third-quarter results.
These charges are expected to increase the company's closely
watched gearing levels in the near term. BP said its gearing will
remain above the targeted 20% to 30% range through to the end of
the year, though net debt will fall through 2020, bringing gearing
in line with targets.
BP said production in the third-quarter was hit by turnarounds
in some of its highest-margin regions, while Hurricane Barry
"significantly disrupted" output in the U.S. Gulf of Mexico. As a
result, the company said these factors reduced output by around
100,000 barrels of oil equivalent a day.
The overall production mix in the quarter saw more barrels of
oil produced from higher tax regions and that, subsequently, its
effective tax rate in the third quarter is 50%. It said this was
significantly higher than in the second quarter but backed its
full-year guided tax rate of 40%.
Write to Oliver Griffin at oliver.griffin@dowjones.com;
@OliGGriffin
(END) Dow Jones Newswires
October 11, 2019 05:55 ET (09:55 GMT)
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