BP plc to spend more on oil and gas

BP plc (LON: BP) is up more than 5.0% this morning after reporting strong results for its fiscal fourth quarter on elevated oil and gas prices.  

BP stock up increased shareholder returns

Shareholders seem to be cheering a 10% increase in dividend to 6.61 cents per share and a $2.75 billion boost to its stock repurchase programme as well.  

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BP also confirmed today that it will spend $8.0 billion more on energy transition by the end of this decade. It, however, plans on spending an equivalent $8.0 billion more on oil and gas as well. Discussing the announcements on CNBC, CEO Bernard Looney said:

We see great opportunity, strong returns for our investors in many parts of the transition. But we need to take care of today’s energy system. Today, with energy affordability at a premium, we need to invest in that system.

Notable figures in BP’s earnings report

BP reported a less than expected 18% year-on-year increase in its underlying replacement cost profit to $4.81 billion. It was also down significantly versus $8.15 billion in Q3.

On the flip side, though, the British multinational noted a whopping 64% growth in its cash flow from operations to $13.57 billion – well ahead of $9.20 billion expected. CEO Looney also said:

I think the company is running well. We had our strongest operations in history. We’ve had our lowest cost in 16 years. Basically, things are going well.

According to BP plc, its full-year profit more than doubled last year to $27.65 billion. Wall Street currently recommends that you buy BP stock.

BP’s guidance for the future

In the current financial quarter, the oil and gas company expects its upstream production to remain largely unchanged. Its earnings press release reads:

Within this, BP expects underlying production from oil production & operations to be slightly higher and production from gas & low carbon energy to be lower.

Versus its year-to-date low, BP stock is now up nearly 10%.