BP share price: 4 things we learnt from its Q2 results

Higher oil production helped the oil and gas major beat earnings expectations for the tenth consecutive quarter.

BP PLC recorded a strong performance in its Q2 results on Tuesday, supported by strong oil output that saw the oil and gas company exceed analysts’ expectations once again.

IG looks at the key takeaways from its latest trading update.

Strong oil output underpins BP’s performance

BP recorded oil and gas production for the quarter averaged 3.8 million barrels a day of oil equivalent, representing a 4% increase over the same period a year prior.

The increase in output was driven by the start-up of its Culzean site in the North Sea, as well as a four further major upstream projects that commenced production in the first half of the year.

The company has a strong pipeline of new projects too, with final investment decisions being made for new upstream projects based in India and the Gulf of Mexico, as well as additional investment in Angola, the company said.

BP sees success midway through its five-year plan

The oil and gas major is now midway through its five-year plan, with the business on course to hit its targets, with it focused on delivering value for shareholders through a disciplined growth strategy.

Part of the five-year plan sees BP focusing on investing in greener energy and renewables, helping to contribute to the wider energy transition towards lower carbon output.

‘We have announced another resilient set of quarterly results, in particular delivering strong underlying cash* of over $8 billion,’ BP CFO Brian Gilvary said.

‘Following the final acquisition payments to BHP and the scheduled annual payments relating to the Gulf of Mexico oil spill being made in the quarter, we continue to expect gearing to trend down through 2020 in line with disposal proceeds from our $10 billion programme and ongoing operating cash flow delivery,’ he added.

Practise trading BP and other oil stocks with an IG demo account.

Growing low carbon businesses

In its Q2 earnings, BP announced that it had agreed to combine its Brazilian biofuels and biopower business with that of Bunge in a new equally-owned joint venture. Once completed, BP’s interest in the venture will be more than 50% larger than its existing biofuels business.

Lightsource BP, its solar energy business, which it holds a 43% stake in, has continued to make strong progress, including agreeing a significant expansion in Brazil.

The oil and gas major also agreed a $30 million venturing investment in Calysta, which will use BP's natural gas to produce protein feed for aquaculture and agriculture.

BP beats expectations once again

BP’s latest set of results saw the company beat analysts’ expectations for the tenth consecutive quarter.

‘Strong volume growth from accretive barrels and seamless execution remains underappreciated,’ analysts at Bernstein said in a note to investors.

The oil and gas company recorded underlying profit of $2.8 billion, in-line with last year, though managing to exceed its own forecast of $2.46 billion.

Operating cash flow, excluding Gulf of Mexico oil spill payments, was $8.2 billion in Q2.

BP’s performance was hindered by Gulf of Mexico oil spill payments worth $1.4 billion on a post-tax basis in the second quarter.

The oil and gas company also announce a dividend of 10.25 cents a share for the quarter.

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

Please see important Research Disclaimer.

European Central Bank meeting

Learn about how the ECB meeting affects interest rates and price stability ahead of the next announcement.

  • How might the next meeting affect the markets?
  • What are the key rate decisions to watch?
  • Why is the Governing Council announcement important for traders?

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.


Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Monday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.