BP Posts $5.2 Billion Loss in 2015

BP PLC (NYSE: BP) reported fourth-quarter and full-year 2015 results before markets opened Tuesday. For the quarter, the oil and gas supermajor posted adjusted diluted earnings per American depositary share (ADS) of $0.06 on revenues of $49.23 billion. In the same period a year ago, the company reported a net loss per ADS of $1.45 on revenues of $75.1 billion. One ADS is equal to six ordinary shares. Analysts estimated earnings per ADS of $0.12 on revenues of $40.62 billion.

BP’s adjusted replacement cost loss (essentially the company’s adjusted net income/loss) in the fourth quarter totaled $196 million, compared with $2.24 billion in the year-ago quarter. Unadjusted, the loss totaled $2.23 billion, compared with a loss of $969 million in the fourth quarter of 2015.

For the full year, BP posted adjusted earnings per ADS of $1.93. On an unadjusted basis the company’s loss totaled $28.18 per share ($5.16 billion). Revenues came in at $225.98 billion, compared with $358.68 billion in 2014. Analysts had forecast earnings per ADS of $2.06 on revenues of $209.2 billion.

The company’s price realization on a barrel of crude dropped from $67.03 in the fourth quarter of 2014 to $37.05 in 2015. For the full year, the average realized price per barrel dropped from $87.96 in 2014 to $45.63.
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BP took $2.6 billion in non-operating after-tax charges in the fourth quarter, primarily related to impairments of upstream assets as well as restructuring charges for the Group.

The company paid $443 million in the quarter for charges related to the Macondo well explosion in the Gulf of Mexico in 2010. To date BP has paid out $55.5 billion in pretax charges related to the disaster.

Last week, BP said it would fire 4,000 workers in its exploration and production group in 2016, and Tuesday morning the company added another 3,000 refining and marketing division staff to the list. The restructuring in refining and marketing is expected to be completed by the end of 2017. The company expects to take a charge of about $2.5 billion for the restructuring, of which about $1.5 billion has already been taken.

The company also announced its regular quarterly dividend of $0.60 per ADS, a dividend yield of 7.41% at Monday night’s closing price.

BP expects full-year 2016 underlying production to be broadly flat with 2015’s total of 2.26 million barrels of oil equivalent per day. The actual reported outcome will depend on the exact timing of project start-ups, divestments, OPEC quotas and entitlement impacts in its production-sharing agreements. First-quarter 2016 reported production is expected to be broadly flat with fourth-quarter production at 2.37 million barrels of oil equivalent per day. BP expects oil prices continue to be challenging in the near term. Refining margins are expected to be less than the $13.20 per barrel fourth-quarter margin.

BP’s ADSs traded down about 8.3% in Tuesday’s premarket, at $29.06 in a 52-week range of $27.26 to $43.85. Thomson Reuters had a consensus analyst price target of $35.91 before the earnings report.