How Has BP’s Stock Fared ahead of 1Q16 Earnings?

What to Expect from BP’s 1Q16 Earnings

(Continued from Prior Part)

BP’s stock performance

In the previous part of this series, we looked into BP’s (BP) segment-wise outlook for 1Q16. In this part, we’ll look at BP’s stock performance prior to its 1Q16 results.

Integrated energy stocks have risen since February of this year. This was due to the possibility of a consensus among major oil producers to support oil prices. From February 11 until April 15, BP (BP) saw its stock price rise 11%.

The shares of BP’s peers PetroChina (PTR) and YPF (YPF) rose 20% and 23%, respectively, during the same period. Cenovus Energy (CVE) rose sharply by 34%. If you are looking for a portfolio comprising large companies, you might consider the iShares Core S&P 500 ETF (IVV). The ETF has ~7% exposure to energy sector stocks.

BP’s capex, costs, and divestment plans

BP’s organic capex (capital expenditure) for 2015 stood at $18.7 billion. In 2015, three major projects, two in Angola and one in Australia, started production. Per BP, it has a balanced upstream portfolio in deepwater and gas fields with a bias toward gas over the next decade.

BP expects its organic capex to be around $17 billion–$19 billion per year in 2016. Plus, BP achieved its $10 billion divestment goal by the end of 2015. BP expects divestment proceeds to be in the range of $3 billion–$5 billion in 2016 and $2 billion–$3 billion in 2017.

In the lower crude oil price environment, BP is aiming for cost optimization. BP already reduced its cash costs by $3.4 billion in 2015 over 2014. By 2017, BP aims to reduce annual cash costs by $7 billion over 2014.

Continue to Next Part

Browse this series on Market Realist:

• Part 1 - BP’s 1Q16 Earnings to Be Affected by Lower Crude Oil Prices

• Part 2 - What to Expect from BP’s Upstream and Downstream Segments in 1Q16

• Part 4 - Analysts’ Recommendations for BP before 1Q16 Earnings