BP plc · LSE:BP.
BP — Q2 2007 Earnings Presentation
21 slides from BP's earnings presentation, Jul 24, 2007
Slide 1: First half 2007 update
First half 2007 update 24 July 2007
Slide 2: Cautionary Statement
Cautionary Statement Forward Looking Statements Cautionary Statement This presentation and the associated slides and discussion contain forward looking statements, particularly those regarding capital expenditure, annual charges, production and timing of major project, expected return of refining ca
Slide 3: Tony Hayward, Group Chief Executive
Tony Hayward Group Chief Executive
Slide 4: Issues addressed
Issues addressed US • Baker Panel report published: implementing recommendations Russia • Way forward agreed on Kovykta Management • Succession complete • New team in place • Clear priorities set
Slide 5: Strategic momentum maintained
Strategic momentum maintained Exploration & Production - asset base strong and growing: • San Juan, Skarv and Southern North Sea projects sanctioned • New access: Oman and Libya • Exploration success: Angola, Gulf of Mexico and Egypt • Strategic Alliance with Gazprom – MoU signed Refining & Marketin
Slide 6: Financial results for 1H 2007
Financial results for 1H 2007 • Replacement cost profit − $10.4bn, down 8% vs. 1H06 − Per share 54.2¢, down 3% vs. 1H06 • Post tax operating cash flow − $14.1bn, down 22% vs. 1H06 • Quarterly dividend per share − 10.825¢, up 10% vs. 2Q06
Slide 7: 2007 guidance
2007 guidance • Production − 3.8 – 3.9 mmboed assuming $60/bbl oil price and current portfolio • Organic capex − Around $18bn • Deliver upstream projects − Atlantis by end 2007 − Greater Plutonio by end 2007 • Texas City − Expected to be processing 400,000 bpd by end of 2007 BP estimates
Slide 8: Byron Grote, Chief Financial Officer
Byron Grote Chief Financial Officer
Slide 9: Trading environment
Trading environment $/bbl Liquids realization $/mcf Gas realization 70 12 60 10 50 8 40 6 30 20 4 10 2 0 0 1Q 2Q 3Q 4Q 1Q 2Q 1Q 2Q 3Q 4Q 1Q 2Q 2006 2007 2006 2007 $/bbl Refining indicator margin 18 Change vs. 2006 16 2Q 1H 14 12 Average realizations 10 Liquids $/bbl 0% (2)% 8 6 Natural gas $/mcf 0%
Slide 10: Financial results
Financial results Change vs. 2Q 2006 Results for the second quarter $bn % % per share • Replacement cost profit 6.1 (1) 5 • Profit including inventory gains/losses 7.4 2 7 • Net cash provided by operating activities 6.1 (33) (29) ¢/ share • Dividend to be paid next quarter 10.825 10 % Change vs. 1H
Slide 11: Exploration & Production
Exploration & Production $bn pre-tax • Lower volumes 9 8 • Sector specific inflation 7 6 • Greater integrity spend 5 • Higher DD&A 4 3 • Non-Operating Items 2 (NOI) 1 − Disposal gains 0 2Q 06 NOI Underlying 2Q 07 − Embedded derivatives 7,347 Underlying result $m 6,494 479 Non-operating items $m 399
Slide 12: Refining & Marketing
Refining & Marketing $bn pre-tax • Higher refining and 3.5 marketing margins 3.0 2.5 • Lower refining availability 2.0 • Greater integrity spend 1.5 • Lower supply 1.0 optimization 0.5 • Favourable fair value 0.0 accounting effects 2Q 06 NOI Underlying 2Q 07 • Non-Operating Items 2,320 Underlying re
Slide 13: Gas, Power & Renewables
Gas, Power & Renewables $bn pre-tax 0.5 • Lower marketing & trading contribution 0.4 • Growing expenditure in 0.3 Alternative Energy 0.2 • Favourable fair value accounting effect 0.1 • Non-Operating Items 0.0 (NOI) 2Q 06 NOI Underlying 2Q 07 − Embedded derivatives 347 Underlying result $m 226 106 No
Slide 14: Other Business & Corporate
Other Business & Corporate $bn pre-tax 0.00 • Expected annual charge of $900m±$200m (0.05) (0.10) (0.15) (0.20) (0.25) 2Q 06 NOI Underlying 2Q 07 (219) Underlying result $m (171) 26 Non-operating items $m 7 (193) Total result $m (164)
Slide 15: Sources and uses of cash
Sources and uses of cash $bn post tax 1H 06 1H 07 25 20 Disposals Disposals Buybacks 15 Buybacks Operations Dividends 10 18.1 Dividends Operations Acquisitions 14.1 5 Organic Organic capex capex 0 Sources Uses Sources Uses
Slide 16: Net debt ratio
Net debt ratio % 40 35 30 25 20 15 10 1Q 2Q 3Q 4Q 1Q 2Q 2006 2007 Net debt ratio = net debt / (net debt + equity)
Slide 17: Shareholder distributions
Shareholder distributions $bn Full Year $bn 1H 24 12 Buybacks 11 21 Dividends 10 18 Share issues 9 8 15 7 12 6 5 9 4 6 3 2 3 1 0 0 (1) (3) 2002 2003 2004 2005 2006 1H 07
Slide 18: Tony Hayward, Group Chief Executive
Tony Hayward Group Chief Executive
Slide 19: Our agenda
Our agenda Safety • Implement Baker Panel recommendations • Implement Operating Management System People • Invest in capability • Increase openness and transparency • Restore pride & confidence Performance • Restore revenues • Reduce complexity and increase efficiency
Slide 20: Strong foundations for the future
Strong foundations for the future Strategy • Robust and enduring Financial framework • Distribute all free cash flow to shareholders • Target gearing range 20 – 30% Strength of asset base • 17.7 bn boe proved reserves(1) • 41.3 bn boe non-proved resources(1) • 1% improvement in recovery factor adds
Slide 21: Q&A
Q&A Tony Hayward Byron Grote Group Chief Executive Chief Financial Officer Andy Inglis Iain Conn Chief Executive Chief Executive Exploration & Production Refining & Marketing Vivienne Cox Fergus MacLeod Chief Executive Head of Investor Relations Gas, Power & Renewables