BP reported underlying full year profits of $6.2bn, up 139% on the previous year, including $2.1bn from the final quarter. That reflects an improved oil price and increased production, although cash flow growth failed to keep pace with profits.
BP announced a final quarterly dividend of 10 cents a share. The shares fell 1.4% in early trading, against a wider market fall of 1.9%.
BP has spent the past seven years addressing big problems, with first the Gulf of Mexico disaster and then the oil price crash throwing the group into disarray. But those headwinds are slowly moving from newspaper pages to the history books.
Gulf payments are still soaking up mind boggling quantities of cash, but are finally starting to recede. New oil fields are coming online, supporting cash generation from the group's Upstream business. Meanwhile the Downstream business, which has been BP's rock throughout much of the oil downturn, continues to deliver excellent results.
The share buyback programme, announced alongside third quarter results, is the first bone for investors. It offsets the effects of a scrip dividend which has been very dilutive, seeing the company issue $2.8bn of shares in lieu of cash dividends last year.
But there's still lots to do before BP's back in rude health.
At almost $38bn, the debt pile is still huge and paying it down seems likely to soak up much of the cash freed up by falling Gulf of Mexico payments. That could well hold back dividend growth - although with shares currently trading on a prospective yield of 6% that might not be too much of a problem.
Still, it's at least possible to see BP's route through to happier times from here. The core business now breaks even at slightly under $50 a barrel, and Brent is trading at around $67. With production set to rise again next year, BP should be able to get its house in order.
Unfortunately, as is always the case with natural resources, BP's fortunes are determined by a global commodity market over which it has no control. It should be in a better position to weather a downturn in a year or two's time, but recent history has shown the oil price to be anything but predictable.
Full year results
BP's improved performance reflects a strong result across all three operating divisions.
Upstream, BP's oil & gas exploration and production, delivered the most substantial improvement, with underlying profits for the year of $5.9bn compared to a loss of $542m in 2016.
That improvement reflects a 12% increase in production and a 30% increase in the average price the group received for its oil. Production costs fell 16% to $7.11 a barrel. BP expects Upstream output to rise again next year as new projects continue to ramp up.
The Downstream business, which refines and sells oil products, saw profits rise 24% to $7bn as BP benefited from an industry wide improvement in refining margins. BP's stake in Russian oil group Rosneft generated an underlying profit of $836m, which compares favourably to last year's $567m.
Full year operating cash flow before charges relating to the Gulf of Mexico oil spill was $24.1bn, up 37% on last year. The Gulf of Mexico spill resulted in a cash charge of $5.2bn for 2017, this is expected to fall to $3bn next year.
Organic capital expenditure fell slightly this year, to $16.5bn, and is expected to fall further in 2018.
BP's gearing ratio, a measure of debt levels, finished the year at 27.4%, down on the third quarter although slightly ahead of last year. Gearing is expected to remain in the 20-30% range going forwards.
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