trending Market Intelligence /marketintelligence/en/news-insights/trending/MG66nP8FuPncqxo0_1Dbmw2 content
Log in to other products

Login to Market Intelligence Platform

 /


Looking for more?

Contact Us

Request a Demo

You're one step closer to unlocking our suite of comprehensive and robust tools.

Fill out the form so we can connect you to the right person.

If your company has a current subscription with S&P Global Market Intelligence, you can register as a new user for access to the platform(s) covered by your license at Market Intelligence platform or S&P Capital IQ.

  • First Name*
  • Last Name*
  • Business Email *
  • Phone *
  • Company Name *
  • City *
  • We generated a verification code for you

  • Enter verification Code here*

* Required

Thank you for your interest in S&P Global Market Intelligence! We noticed you've identified yourself as a student. Through existing partnerships with academic institutions around the globe, it's likely you already have access to our resources. Please contact your professors, library, or administrative staff to receive your student login.

At this time we are unable to offer free trials or product demonstrations directly to students. If you discover that our solutions are not available to you, we encourage you to advocate at your university for a best-in-class learning experience that will help you long after you've completed your degree. We apologize for any inconvenience this may cause.

In This List

North Sea asset sale moves BP a step closer to debt reduction, stock buybacks

Essential Energy Insights - June 11, 2020

Webinar Replay

Deep Dive on Oil & Gas for Financial Institutions

Essential Energy Insights - May 28, 2020

Essential Energy Insights - May 14, 2020


North Sea asset sale moves BP a step closer to debt reduction, stock buybacks

With the impending sale of some of its U.K. upstream interests to Premier Oil PLC for $625 million, BP PLC is one step closer to completing its $10 billion divestment program, reducing debt and starting buybacks, according to analysts.

"I expect the proceeds to be used for debt reduction," Edward Jones senior equity analyst Jennifer Rowland said in a Jan. 7 email. "While BP has come a long way in reducing leverage, I think we need to see further debt reduction before the company can meaningfully start buying back stock. The asset sales help them get one step closer."

While the divestitures are key to the oil major's ability to reduce debt and raise its dividend, a payout to shareholders will not be in the cards until after Bernard Looney, the head of the company's upstream business, takes the reins from retiring CEO Bob Dudley at the end of March, analysts said.

BP's 2.5% dividend increase in the second quarter of 2018 was its first in nearly four years. The dividend has remained at 10.25 cents per share since then, even as investors have been ratcheting up pressure on large oil companies to hike dividends following stronger earnings, rising cash flow and production growth.

However, BP's indebtedness rose to 31.7% at the end of the third quarter of 2019, from 31% in the previous quarter and 23% in the same quarter of 2018. Several analysts believe that BP's gearing may have topped out and could move into the 20% to 30% guidance range this year, assuming the divestiture target is met, they said.

BP kicked off its noncore asset sale program in 2018 to help fund its $10.5 billion purchase of shale assets in the Permian Basin, the Eagle Ford Shale in Texas and the Haynesville region in Texas and Louisiana from BHP Group. In October 2019, BP said it could wrap up its $10 billion sales program ahead of schedule before the end of 2020 but would take a write-down of as much as $3 billion related to some of its recent divestitures.

BP sold off most of its Permian Basin shale assets in 2010 to Apache Corp. to help defray the costs of damages related to the Deepwater Horizon explosion and oil spill in the Gulf of Mexico that same year.