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BP Announces Exploration Plans for 2Q17, Reviews Portfolio

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BP plcBP continues to make progress in shifting its exploration portfolio toward natural gas and advantaged oil.

In line with BP's interaction with the financial community in 2016, the company is aggressively evaluating its exploration activities and refocusing on growth in natural gas and advantaged oil in regions where it presently functions. BP is also seeking for prospects to develop new production regions while abandoning less competitive exploration prospects.

In its efforts toward continuous portfolio evaluation, BP has decided to abandon its 50% interest in Block 24/11 offshore southern Angola. In 2014, a gas discovery made in the Katambi block has not been established for commercial purposes. Consequent to this and other exploration write-offs in Angola, BP anticipates the inclusion of a non-cash exploration write-off in Angola of about $750 million, in its second quarter 2017 results, which will not attract tax relief. This will not affect cash flow as part of re-balancing.

In October 2016, BP announced that it would not continue explorations in the four located in the Great Australian Bight, offshore southern Australia. BP and partner Statoil ASA STO have now inked a swap agreement where the latter has taken full ownership and operatorship of two of the blocks. BP is ensuing discussions with the Australian government relating to exiting its blocks. This is not expected to impact second quarter 2017 results.

The company continues to comprehensively appraise its existing portfolio of exploration assets, progressing with the most promising ones and exiting those which are non-productive.

In 2017, BP has announced four gas discoveries.

Announced earlier in June, the Savannah and Macadamia gas discoveries in Trinidad are jointly estimated to release about 2 trillion cubic feet of gas in place and support development in BP's long-standing business in Trinidad. The Qattameya discovery in Egypt, represents the third gas discovery on the North Damietta Offshore concession and was announced in March. BP is already developing the Atoll field in the North Damietta Offshore concession.

Subsequent to the completion of its entry into Senegal, BP and partner Kosmos Energy announced a major gas discovery with the Yakaar-1 exploration well in May. This further substantiates offshore Mauritania and Senegal as a world class hydrocarbon basin. The partners have plan a drill stem test at the Tortue Field and a further three exploration wells over the next 12 months.

BP continues to explore and access new exploration acreage and opportunities worldwide. Building on current positions, the company has been awarded new licenses in the U.S. Gulf of Mexico and in the UK North Sea. BP has been awarded 25 blocks as a result of the UK's 29th Offshore Licensing Round that signifies the largest acreage award for BP in the North Sea since the late 1990s

In support of cautiously selecting for new material production regions, earlier in 2017 BP was awarded exploration licenses in Newfoundland, off the east coast of Canada, and in Mexico. Further to the deal announced between BP and Kosmos Energy in December 2016, BP deepened its position in Senegal agreeing to acquire a further 30% interest in two offshore blocks.

Investor confidence on the BP stock is reflected in its price chart. Shares of the company gained 1% in the last three months, while the Zacks categorized Oil & Gas - International Integrated industry registered a decline of 1.9% in the same time span.

BP currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the same space include Delek US Holdings, Inc. DK and Canadian Natural Resources Limited Ltd. CNQ . All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here .

Delek US Holdings delivered a positive earnings surprise of 148.48% in the preceding quarter. The company beat estimates in all of the four trailing quarters with an average positive earnings surprise of 60.68%.

Canadian Natural Resources delivered a positive earnings surprise of 30.77% in the preceding quarter. It surpassed estimates in two of the four trailing quarters with an average negative earnings surprise of 275.46%.

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Delek US Holdings, Inc. (DK): Free Stock Analysis Report

Canadian Natural Resources Limited (CNQ): Free Stock Analysis Report

BP p.l.c. (BP): Free Stock Analysis Report

Statoil ASA (STO): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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