Seeking Alpha

BP heeds message to stop spending and return cash, shares surge

  • BP (BP +4.8%) seems to have received and understood investors' message to hold the line on capital spending; that, rather than Q3 profits that exceeded beaten-down expectations, is prompting today's jump in BP shares.
  • BP also hikes its dividend and promises to sell $10B in assets by the end of 2015 to fund additional distributions to shareholders, including share buybacks.
  • BP's next challenge will be to demonstrate its pledges are backed up by stronger operational cash flows, WSJ's Helen Thomas writes; a promising sign is the 3.4% gain in Q3 production adjusted for asset sales.
  • BP has several projects ramping up this year and next while higher spending to retool operations after Macondo is approaching its end; also, the modernization of the Whiting refinery in Indiana could deliver $1B/year in additional cash flow upon reaching full production.
Comments (2)
  • A liquidation strategy does not lead to a high multiple. Only profitable .growth can create real wealth
    29 Oct 2013, 12:35 PM Reply Like
  • I've been taking heat for a long time on the comment boards here about BP, but they will get back to a respectable state. They messed up, they fixed it, and will move on. I just wish I had the chance to jump in at $<30\share.
    29 Oct 2013, 01:21 PM Reply Like
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