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BP plc (BP) Likely to Bring Multiple Projects Online in 2017
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According to a recent announcement by British energy giant BP plc’s (BP - Free Report) CEO Bob Dudley at the CERAWeek energy conference, the company is likely to bring multiple projects online in 2017. In fact, the number of developments this year is expected to be more than what the company has achieved in previous years.
Dudley also mentioned that the company is on track to finish seven big projects across the globe – from Egypt to the Gulf of Mexico. Adding to the positive sentiment, BP expects 88 million man-hours of work in 2017 compared with just 8 million man-hours in 2011.
What to Expect?
The tide seems to be turning for the super major which had been hit hard by the Macondo oil spill of 2010 and the prolonged weakness in crude price.
The oil spill incident of 2010 in the BP-operated Macondo prospect is still affecting the company. In fact, BP had to divest some of its best operating properties to settle the huge litigation charges related to the spill. The asset sales may hinder the company’s future cash generating opportunities going forward. It is to be noted that the lost reserves/production from the group's asset sales cannot be ignored either.
This apart, most of the energy companies like Royal Dutch Shell plc , Exxon Mobil Corporation (XOM - Free Report) and Chevron Corporation (CVX - Free Report) to name a few were severely impacted by the freefall in commodity prices. The lackluster demand amid the supply glut made it almost impossible for the energy majors to sell the commodity at expected prices. Most of these companies ended up with huge debt load to continue their operations. BP was no exception to the trend.
However, with multiple projects likely to be brought online this year, BP is expected to generate significant cashflows for shareholders in the long run.
Price Performance
In the last one year, BP’s shares outperformed the Zacks categorized Oil & Gas-International Integrated industry. During the aforesaid period, the company shares increased almost 12% as against 10% gain for the broader industry.
About the Company
BP is one of the largest integrated energy firms in the world. The company had an average positive earnings surprise of 42.86% in the last four quarters.
Moreover, the company’s dividend yield history is lucrative. The current dividend yield of 7% has surpassed the 4.6% yield for the industry. Over the last one year, the company’s average yield of 7% also outperformed the dividend yield of 4.7% for the broader industry.
However, commodity prices volatility remains an overhang on the stock.
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BP plc (BP) Likely to Bring Multiple Projects Online in 2017
According to a recent announcement by British energy giant BP plc’s (BP - Free Report) CEO Bob Dudley at the CERAWeek energy conference, the company is likely to bring multiple projects online in 2017. In fact, the number of developments this year is expected to be more than what the company has achieved in previous years.
Dudley also mentioned that the company is on track to finish seven big projects across the globe – from Egypt to the Gulf of Mexico. Adding to the positive sentiment, BP expects 88 million man-hours of work in 2017 compared with just 8 million man-hours in 2011.
What to Expect?
The tide seems to be turning for the super major which had been hit hard by the Macondo oil spill of 2010 and the prolonged weakness in crude price.
The oil spill incident of 2010 in the BP-operated Macondo prospect is still affecting the company. In fact, BP had to divest some of its best operating properties to settle the huge litigation charges related to the spill. The asset sales may hinder the company’s future cash generating opportunities going forward. It is to be noted that the lost reserves/production from the group's asset sales cannot be ignored either.
This apart, most of the energy companies like Royal Dutch Shell plc , Exxon Mobil Corporation (XOM - Free Report) and Chevron Corporation (CVX - Free Report) to name a few were severely impacted by the freefall in commodity prices. The lackluster demand amid the supply glut made it almost impossible for the energy majors to sell the commodity at expected prices. Most of these companies ended up with huge debt load to continue their operations. BP was no exception to the trend.
However, with multiple projects likely to be brought online this year, BP is expected to generate significant cashflows for shareholders in the long run.
Price Performance
In the last one year, BP’s shares outperformed the Zacks categorized Oil & Gas-International Integrated industry. During the aforesaid period, the company shares increased almost 12% as against 10% gain for the broader industry.
About the Company
BP is one of the largest integrated energy firms in the world. The company had an average positive earnings surprise of 42.86% in the last four quarters.
Moreover, the company’s dividend yield history is lucrative. The current dividend yield of 7% has surpassed the 4.6% yield for the industry. Over the last one year, the company’s average yield of 7% also outperformed the dividend yield of 4.7% for the broader industry.
However, commodity prices volatility remains an overhang on the stock.
As a result BP carries a Zacks Rank #3 (Hold). This implies that the stock will perform in line with the broader U.S. equity market over the next one to three months. You can seethe complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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