Wednesday 31 July 2013

BP report Q2 2013

A British oil company

Yesterday there was also the half year report from BP (it can be found here). I must admit that I had forgotten to add that report to my calendar and for that reason I did not discover it until I saw that the stock had retreated almost 4% and I started to wonder what was going on.

 The reason for the retreated stock value was due to:

  • Less profit due to weak currencies (especially Rouble)
  • Experts expected a profit of 3.4 billion USD and it became 2.7 billion USD
  • Taxes jumped from 35% to 45% (this is indeed strange and explained as due to a strong dollar)
  • The litigations are still not finished and the fund created to pay for it has been cleaned out meaning that any more money needed will be taken directly from the profits.
  • Lowered oil prices
When it comes to the litigations the CEO Bob Dudley said that BP needs to go to the matrasses and I tend to agree with him. It is not ok that the vulture-ing American lawyers have been cleaning out the fund. Any person that have taken damage due to the oil spill should be compensated but besides from that the vultures just need to be starved.

Above is a small segment taken from the report and I must admit that I was not very negative to the report. They keep making more oil and gas discoveries, they have received new exploration licences. BP made 2.7 billion USD in profit in Q2 and 6.9 billion USD in first half year excluding the sale of TNK-BP. We should also not forget that by selling the share in TNK-BP the revenues and profits would drop more then what would be regained from Rosneft... the exchange was 12.5 billion in between. I still think that the money coming from Rosneft will increase significantly in the future and that it will beat whatever was coming from TNK-BP but it will take some more time.

Conclusion: Like I have mentioned many times before I stepped into BP at the wrong moment and probably should not have stepped in at all. Both Shell and Total are better companies and almost equally "cheap" today and are paying even better dividends then BP. Based on the litigations maybe the dividends in BP will even be slightly cut in the future. Who knows? Still... I will stick with my BP and collect my fully acceptable dividend.

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