After the storm

25 April 2006 By Fiona Maharg-Bravo

Capex may be rising and production falling, but thanks to the oil price, BP is throwing off prodigious amounts of cash. But BP s shares are still only discounting an oil price in the low $40’s per barrel. That s far too pessimistic.

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BP's net profit, excluding exceptional items, rose 7% to $5.3bn in the first quarter compared to last year, beating expectations thanks to high oil prices and a better refining result than expected. Including nonoperational items, net profit was down 4%.

The high oil price offset volume declines at the exploration and production unit. Net profit rose 5% to $6.8bn despite a 2% fall in production.

BP's refining unit reported profits of $1.6bn, compared with $1.4bn the previous year, and a loss in the fourth quarter of 2005. The result includes a net nonoperating gain of $564m.

BP's dividend increased 10% to $0.94 a share and the company bought back $4bn of its shares during the quarter.

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