BP Q4 profits miss expectations, 2009 production growth ahead of guidance

Oil supermajor BP (LSE: BP) said profits for the final quarter of 2009 amounted to US$4.4 billion, marking a 70% year-on-year increase, however the stock fell 4% as the figure was below markets expectations.

The company called it a "very good year" in a “weak external environment,” noting a larger than expected increase in production of 4% compared to its expected average annual growth rate of 1-2%. The increase was mostly due to the ramp-up and start-up of major new projects, including the first full year of production from the Thunder Horse field in the US Gulf of Mexico.

BP’s reserve replacement for the year amounted to 129% to mark the seventeenth consecutive year of reserve replacement of at least 100%.

The company left its long term production guidance unchanged, saying the level of 2010 production would be in line with the guidance giving in its update from last March, while growth would resume in 2011.

“These results provide the clearest demonstration of the progress we have made and the momentum we have established in growing our business and making it more efficient,” said Chief Executive of BP Tony Hayward.

Cash costs for the full year decreased by US$4 billion compared to 2008 with about 60% of that delivered by direct interventions by the company, which is set continue its cost cutting measures in 2010. Capex (capital expenditure) for the full year totalled US$20 billion, while BP's level of gearing ended the year at the bottom of the target range of 20-30%.

Proceeds from disposals amounted to US$2.7 billion.

http://www.proactiveinvestors.co.uk/companies/news/12865/bp-q4-profits-miss-expectations-2009-production-growth-ahead-of-guidance-12865.html