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BP Plans to Acquire Remaining Stakes in Its Lighthouse BP JV
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BP plc (BP - Free Report) plans to acquire the remaining stake in its solar power joint venture (JV), Lightsource BP, as part of plans to expand its renewable energy capacity, per a Reuters report.
The decision is being made after BP delayed its shift from oil and gas and pledged to boost spending on renewables and low-carbon fuel by $8 billion by 2030.
Lightsource BP is one of the leading developers of solar photovoltaic projects globally. The JV’s current portfolio is valued at around $2 billion.
In 2017, BP acquired a 43% stake in Lightsource BP for $200 million and increased its interest to 50% later. Lightsource BP, which currently operates in 19 countries, has developed 9 gigawatts (GW) of projects. It plans to develop 25 GW of solar projects by 2025.
BP also develops solar projects independently from Lightsource BP, including in the United States. The company had a total renewable project pipeline of 43 GW at the end of 2022. Of the total, solar projects comprise 25.7 GW. The company aims to expand its renewables capacity to 50 GW by 2030.
The imperative to reduce the consequences of climate change becomes more important with each passing day. The acquisition will enable BP to increase its access to renewable power generation and simplify the decision-making processes of projects, while investing and combining it with its in-house solar production.
Lightsource BP remains in a large investment phase. Hence, the JV reported a loss of £173 million in 2021 compared with a loss of £22.3 million in 2020. Also, rising raw material and transportation costs have put pressure on the profitability of renewables projects over the past year.
Price Performance
Shares of BP have outperformed the industry in the past six months. The stock has gained 33.8% compared with the industry’s 19% growth.
Antero Midstream Corporation (AM - Free Report) reported fourth-quarter 2022 adjusted earnings per share of 20 cents, beating the Zacks Consensus Estimate of 17 cents. The strong quarterly results were primarily driven by higher freshwater delivery volumes and increased average freshwater distribution fees.
For 2023, Antero Midstream expects a net income of $340-$380 million, indicating an increase from the $326.2 million reported in 2022.
Liberty Energy Inc. (LBRT - Free Report) announced fourth-quarter 2022 earnings per share of 82 cents, which handily beat the Zacks Consensus Estimate of 71 cents. The outperformance reflects the impacts of strong execution and increased service pricing.
As part of its shareholder return policy, LBRT repurchased $125 million of its stock at an average price of $15.29 a piece since July and reinstated a quarterly cash dividend of 5 cents in the fourth quarter.
Oceaneering International, Inc.’s (OII - Free Report) fourth-quarter 2022 adjusted profit of 6 cents per share missed the Zacks Consensus Estimate of a profit of 17 cents. The underperformance was due to weaker results in certain segments.
For 2023, Oceaneering projects consolidated EBITDA of $260-$310 million and a free cash flow generation of $75-$125 million.
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BP Plans to Acquire Remaining Stakes in Its Lighthouse BP JV
BP plc (BP - Free Report) plans to acquire the remaining stake in its solar power joint venture (JV), Lightsource BP, as part of plans to expand its renewable energy capacity, per a Reuters report.
The decision is being made after BP delayed its shift from oil and gas and pledged to boost spending on renewables and low-carbon fuel by $8 billion by 2030.
Lightsource BP is one of the leading developers of solar photovoltaic projects globally. The JV’s current portfolio is valued at around $2 billion.
In 2017, BP acquired a 43% stake in Lightsource BP for $200 million and increased its interest to 50% later. Lightsource BP, which currently operates in 19 countries, has developed 9 gigawatts (GW) of projects. It plans to develop 25 GW of solar projects by 2025.
BP also develops solar projects independently from Lightsource BP, including in the United States. The company had a total renewable project pipeline of 43 GW at the end of 2022. Of the total, solar projects comprise 25.7 GW. The company aims to expand its renewables capacity to 50 GW by 2030.
The imperative to reduce the consequences of climate change becomes more important with each passing day. The acquisition will enable BP to increase its access to renewable power generation and simplify the decision-making processes of projects, while investing and combining it with its in-house solar production.
Lightsource BP remains in a large investment phase. Hence, the JV reported a loss of £173 million in 2021 compared with a loss of £22.3 million in 2020. Also, rising raw material and transportation costs have put pressure on the profitability of renewables projects over the past year.
Price Performance
Shares of BP have outperformed the industry in the past six months. The stock has gained 33.8% compared with the industry’s 19% growth.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
BP currently carries a Zack Rank #3 (Hold).
Investors interested in the energy sector might look at the following companies that presently carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Antero Midstream Corporation (AM - Free Report) reported fourth-quarter 2022 adjusted earnings per share of 20 cents, beating the Zacks Consensus Estimate of 17 cents. The strong quarterly results were primarily driven by higher freshwater delivery volumes and increased average freshwater distribution fees.
For 2023, Antero Midstream expects a net income of $340-$380 million, indicating an increase from the $326.2 million reported in 2022.
Liberty Energy Inc. (LBRT - Free Report) announced fourth-quarter 2022 earnings per share of 82 cents, which handily beat the Zacks Consensus Estimate of 71 cents. The outperformance reflects the impacts of strong execution and increased service pricing.
As part of its shareholder return policy, LBRT repurchased $125 million of its stock at an average price of $15.29 a piece since July and reinstated a quarterly cash dividend of 5 cents in the fourth quarter.
Oceaneering International, Inc.’s (OII - Free Report) fourth-quarter 2022 adjusted profit of 6 cents per share missed the Zacks Consensus Estimate of a profit of 17 cents. The underperformance was due to weaker results in certain segments.
For 2023, Oceaneering projects consolidated EBITDA of $260-$310 million and a free cash flow generation of $75-$125 million.