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    BP.   GB0007980591

BP PLC

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BP hits $35 billion net debt target well ahead of schedule

04/06/2021 | 04:19am EDT
FILE PHOTO: BP signage is seen at a service station near Brighton, Britain

(Reuters) - Energy group BP said on Tuesday it expects to have hit its $35 billion net debt target in the first quarter of this year, sooner than expected and paving the way for it to deliver on its promise of buying back shares.

"This is a result of earlier than anticipated delivery of disposal proceeds combined with very strong business performance during the first quarter," Chief Executive Bernard Looney said in a statement.

Shares in the London-based company, which had previously expected to reach the net debt target in around the fourth quarter of 2021 or the first quarter of 2022, rose as much as 3% to 299 pence in early trade on news it would reach the target sooner.

BP shares are now up around 16% this year, after shedding 45% in 2020 as the coronavirus pandemic hit oil demand.

BP plunged to a $5.7 billion loss last year and had a debt pile of $39 billion at the end of 2020. It had expected that debt level to rise in the first half of 2021 due to several payments due.

However, in the first quarter it generated around $4.7 billion from sale proceeds.

As part of Looney's plan to shift the focus of the oil major to low carbon energy investments, BP aims to sell $25 billion of assets by 2025.

BP said in February that it plans to start share buybacks once it reaches its debt target. The company said on Tuesday that it would provide an update on share buybacks during its first-quarter results on April 27.

"We estimate that at $60/bbl oil prices, the company will be buying back around $2 billion - $2.5 billion in shares annually," Berenberg analyst Henry Tarr wrote in a note.

BP also said its performance in the first quarter of 2021 was driven by trading, the price environment and resilient operations.

Brent crude rose 22.6% during the quarter on optimism about a recovery in oil demand following the rollout of COVID-19 vaccines since the start of the year.

BP said on Tuesday it expects sale proceeds in 2021 to be at the top end of its existing $4 billion to $6 billion range.

(Reporting by Yadarisa Shabong in Bengaluru; Editing by Shounak Dasgupta and Susan Fenton)

By Yadarisa Shabong


© Reuters 2021
Stocks mentioned in the article
ChangeLast1st jan.
BP PLC -3.02% 291.75 Delayed Quote.18.07%
LONDON BRENT OIL -1.03% 66.48 Delayed Quote.28.41%
S&P GSCI GOLD INDEX 0.37% 1035.399 Delayed Quote.-6.57%
WTI -1.57% 62.588 Delayed Quote.30.34%
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Financials (USD)
Sales 2021 234 B - -
Net income 2021 7 041 M - -
Net Debt 2021 40 072 M - -
P/E ratio 2021 11,8x
Yield 2021 4,99%
Capitalization 85 295 M 84 999 M -
EV / Sales 2021 0,53x
EV / Sales 2022 0,50x
Nbr of Employees 63 600
Free-Float 93,3%
Chart BP PLC
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Technical analysis trends BP PLC
Short TermMid-TermLong Term
TrendsNeutralBullishNeutral
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 23
Average target price 4,92 $
Last Close Price 4,21 $
Spread / Highest target 61,9%
Spread / Average Target 16,9%
Spread / Lowest Target -35,1%
EPS Revisions
Managers and Directors
NameTitle
Bernard Looney Chief Executive Officer & Director
Murray Auchincloss Chief Financial Officer & Director
Helge Lund Chairman
Gordon Young Birrell Executive Vice President-Production & Operations
Rahul Erik Saxena Group Head-Ethics & Compliance officer
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