BP stocks up as Exxon’s rival could be first oil company to resume share buybacks

BP (BP) announced Tuesday that it likely reached its debt reduction target in the first quarter, helped by asset sales and the recovery in oil prices. Shares of BP rose.


The European oil company had previously forecast that it would reach its goal of $ 35 billion in net debt between the fourth quarter of 2021 and the first quarter of 2022.

“This is the result of an earlier delivery of disposition revenue combined with a very strong business performance during the first quarter,” CEO Bernard Looney said in a statement.

BP received $ 4.7 billion in asset sales revenue during the first quarter. Sales included an interest in a major gas field in Oman and an interest in Palantir (PLTR).

With its debt target likely in hand, BP could soon resume the share buyback. The company reiterated its commitment to deliver 60% of excess cash to shareholders.

Last year, BP and other big oil companies like Exxon Mobil (XOM), Chevron (CVX) and Royal Dutch Shell (RDSA) suspended buybacks as oil prices plummeted during the pandemic.

BP will report full first quarter results and provide further updates on the buyback program on April 27. The company also cut its dividend last year, but did not mention it on Tuesday.

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BP Shares, Oil Shares

The shares were up 2.5% to 24.85 on the stock market today. Shares in BP have cooled since mid-March, but are now rebounding from a test at their 50-day line, according to MarketSmith’s chart analysis.

Other major oil stocks fell on Tuesday. Exxon shares fell 0.2%, Chevron lost 0.8% and Shell lost 0.5%.

Meanwhile, US and Brent crude oil prices rebounded more than 1% after Monday’s sale, as the resurgence of covid cases in major markets increased demand fears.

ConocoPhillips (COP), the largest independent oil producer, resumed its share buybacks last month, while keeping capex plans in check.

The resumption of BP’s share buybacks could put further pressure on US rivals to follow through soon. But Chevron told shareholders last month that the buybacks will not resume until management is confident they can be sustained for several years.

Follow Gillian Rich on Twitter for energy news and more.


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