BP more than doubles profits on stronger oil prices as it aims to close $10.5bn BHP deal
BP has more than doubled its profits for its latest quarter, telling investors it could complete its $10.5bn (£8.2bn) purchase of BHP assets in cash as early as tomorrow.
The oil and gas giant said its underlying profit for the quarter was $3.8bn, more than double its profit for the same period in 2017 – its strongest quarter in five years.
While its profit for the first nine months of 2018 was $9.2bn, once again more than double the $4.06bn it made in the equivalent period the previous year.
Shares in BP rose 3.5 per cent in early trading.
The company said its agreed purchase of BHP Billiton's shale assets – BP's largest deal in two decades – could be completed on Wednesday.
Due to rising oil prices since the deal was agreed, BP said it could fund the entire transaction from available cash rather than using equity for the deferred consideration.
Chief financial officer Brian Gilvary said: “This quarter's underlying result was significantly higher than the second quarter in a very similar price environment.
“Since we announced the BHP transaction, oil prices have firmed to levels significantly above the acquisition assumptions.
“While oil prices remain at these levels, we expect to finance the transaction fully using cash.”
The firm still paid out $500m in Gulf of Mexico oil spill payments following the disaster at its Macondo Prospect in 2010.
Its Thunder Horse Northwest expansion project in the Gulf of Mexico and the Western Flank B project in Australia also began in production earlier this month.
“Clearly the new higher oil price is making a difference to BP and all the oil majors,” Neil Wilson from Markets.com said.
Wilson expected the FTSE 100 to be boosted on Tuesday by BP's strong results.