BP Shares Rise as Q2 Upstream Production Now Expected to Be Higher

BP (LON: BP.) shares rose 1.7% in early trading on Friday after the energy giant said it now expects upstream production in the second quarter to be higher than the prior quarter, driven by improved performance in its oil operations.

The company said oil production and operations, particularly at its U.S. bpx energy unit, had increased, while gas and low carbon energy output were also slightly higher. 

The update contrasts with BP’s previous guidance, which anticipated broadly flat reported production.

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Investors reacted positively to the revised outlook, even as the company warned of lower oil and gas price realisations.

BP expects a $0.6 billion to $0.8 billion negative impact in oil production and operations, and a $0.1 billion to $0.3 billion hit in gas and low carbon energy, due in part to production mix and pricing lags in the Gulf of Mexico and the UAE.

Refining margins were stronger quarter-on-quarter, with a positive impact of $0.3 billion to $0.5 billion, despite a high level of planned turnaround activity. Oil trading performance is also expected to be strong.

Net debt is projected to be slightly lower than at the end of the first quarter.

The company flagged post-tax adjusting items related to asset impairments of between $0.5 billion and $1.5 billion. These will be excluded from underlying profit.

BP is set to report its full second-quarter results on August 5.