From BP today:



BP today announced its financial results for the first quarter of 2014. Underlying replacement cost profit1 for the quarter was $3.2 billion, compared with $2.8 billion for the previous quarter and $4.2 billion for the first quarter of 2013. Operating cash flow in the quarter was $8.2 billion.



The company also announced a quarterly dividend of 9.75 cents per ordinary share to be paid in June, 8.3% higher than a year earlier. As previously advised, the Board will continue to review the level of the dividend with the first and third quarter results each year.



BP Group Chief Executive Bob Dudley commented: This is a very solid start to 2014. Operating cash flow was strong in the first quarter, we have seen further exploration success and upstream project start-ups, and the upgraded Whiting refinery is ramping up steadily. We remain confident of delivering our 10-point plan targets that we set in 2011 for delivery in 2014.



BP is now nearing completion of its current $8 billon share buyback programme, with $7.6 billion spent repurchasing shares for cancellation. So far BP has agreed divestments totalling over $3.0 billion including the agreement last week to divest a number of assets in Alaska -- towards its expectation of agreeing $10 billion in additional divestments by the end of 2015. BP expects to use the post-tax proceeds from these divestments primarily for distributions to shareholders, biased towards share buybacks.



Dudley commented: We expect material growth in operating cash flow, coupled with disciplined investment, to deliver sustainable growth in free cash flow. This will support increasing distributions to our shareholders. As well as progressive growth in the dividend per share, we expect to use surplus cash to support further distributions through share buy-backs or other mechanisms.



BPs Upstream segment reported $4.4 billion underlying pre-tax replacement cost profit for the first quarter, compared with $3.8 billion for the previous quarter and $5.7 billion for the first quarter of 2013. Compared to a year ago, the result was affected by the impact of divestments and higher non-cash costs.



Following on from the decision to create a separate BP business around its US lower 48 onshore oil and gas activities, and as a consequence of appraisal results, BP has decided not to proceed with development plans in the Utica shale. The Upstream result includes a write-off relating to the Utica acreage.



The Downstream segment reported $1.0 billion underlying pre-tax replacement cost profit for the first quarter, compared with $70 million for the fourth quarter of 2013 and $1.6 billion for the first quarter last year. Compared with a year ago, the result was primarily impacted by a weaker refining environment. Both Upstream and Downstream results included a strong contribution from trading activities.



BP also reported an estimated underlying pre-tax replacement cost profit for Rosneft2 of $271 million for the quarter. This result was adversely affected by depreciation of the rouble against the US dollar.



Total group reported production of oil and gas for the quarter, including Russia, was 3.13 million barrels of oil equivalent a day (boe/d). BPs share of Rosneft oil and gas production for the quarter2 was one million boe/d.



Excluding Russia, underlying production3 was slightly lower than a year earlier as higher output from new projects in the North Sea, Angola and Gulf of Mexico was offset by turnaround activity in Angola and lower production elsewhere. Reported production, excluding Russia, was 8.5% lower reflecting both the expiry in January of the onshore concession in Abu Dhabi and the impact of divestments.



Reported production, excluding Russia, is expected to be lower in the second quarter due to planned seasonal turnaround activity.



Strategic progress


Eight exploration wells have been completed so far in 2014, including the Cobalt-operated Orca discovery in Angola and the BG-operated Notus discovery in Egypt, and BP is on track to participate in at least 15 exploration wells over the full year. In the quarter, following the lifting of BPs suspension and debarment by the US EPA, BP was the highest bidder on 24 new leases in the Gulf of Mexico, with final awards subject to regulatory approval.



Three new major upstream projects started production during the first quarter Chirag Oil in Azerbaijan, Na Kika Phase 3 and the Shell-operated Mars B in the Gulf of Mexico. Production has also since begun from the Atlantis North Expansion Phase 2 development in the Gulf of Mexico and three further projects continue to make progress towards start up in 2014.



In the Downstream, refining availability was maintained at 95% or above for the seventh consecutive quarter. Heavy crude processing at the upgraded Whiting refinery continues to ramp-up; the refinery was processing around 200,000 barrels a day (b/d) of heavy oil at the end of the first quarter and is expected to reach up to 280,000 b/d during the second quarter.



Active management of BPs portfolio also continues with the agreement to focus BPs activities in Alaska, divesting interests in four fields to Hilcorp, and BPs plans to form a separate business to run its US lower 48 onshore oil and gas assets. BP has decided not to proceed with the development of Utica shale assets in Ohio and earlier this month also announced the decision to halt processing at its Bulwer refinery in Australia.



US legal update


The Court has yet to rule on either the first or second phases of the MDL 2179 trial in New Orleans and could issue its decision at any time. The next phase, in which the court will hear evidence regarding the penalty factors set out in the Clean Water Act, has been scheduled to begin in January 2015.



The total cumulative net charge for the Gulf of Mexico oil spill remains at $42.7 billion. This does not include any provision for business economic loss claims that are not yet received, processed and paid. BP continues to contest the payment of those business economic loss claims which it believes to be unfounded.



Unallocated headroom in the $20 billion Trust Fund remains at approximately $700 million. At the end of the quarter, the remaining aggregate cash balance in the Trust and associated funds was $6.6 billion, with $13.4 billion having been paid out.





Note: BP has leased 84,000 acres in Trumbull County. But initial drilling in that area was less than successful.