BP Forecasts Increased Production and Financial Adjustments for Q2, Net Debt Expected to Decline

BP anticipates increased upstream production in Q2, primarily due to higher oil production and operations, as well as a slight boost in gas and low carbon energy production. Net debt is expected to decline marginally by the end of Q2, while underlying charges in other corporate sectors are steady. BP forecasts post-tax asset impairment costs between $0.5 billion and $1.5 billion, affecting various segments. Analysts forecast an average target price of $34.43 with a 9.22% upside from the current price.

BP (BP, Financial) has reported optimistic projections for the second quarter (Q2) of 2025, indicating an anticipated increase in upstream production, primarily driven by heightened oil production and operations. The company expects to see a marginal decline in net debt by the end of Q2, with underlying charges in other corporate sectors remaining steady. Additionally, BP forecasts post-tax asset impairment costs between $0.5 billion and $1.5 billion, which will affect various segments.

The increase in upstream production is largely attributed to higher oil production and operations, with notable contributions from BPX Energy. There is also a slight boost expected in gas and low carbon energy production. The gas and low carbon energy segment is projected to impact results by approximately $0.1 billion to $0.3 billion, primarily due to shifts in non-Henry Hub natural gas prices. Oil production and operations are expected to see a $0.6 billion to $0.8 billion effect, owing to variations in production mix and pricing lags in regions such as the Gulf of America and the UAE.

Seasonal factors are anticipated to enhance volumes and fuel margins in the customers and products unit, while refining margins are expected to improve by $0.3 billion to $0.5 billion. Despite increased turnaround activity, oil trading performance is predicted to remain robust.

BP's net debt is projected to decline marginally by the end of Q2, compared to the first quarter. Meanwhile, underlying charges in other corporate sectors are expected to remain steady. Adjusting for certain items, BP forecasts post-tax asset impairment costs between $0.5 billion and $1.5 billion, affecting various segments but excluded from the underlying profit calculations based on replacement costs.

Wall Street analysts have forecasted an average target price of $34.43 for BP PLC (BP, Financial), with a high estimate of $50.00 and a low estimate of $28.10. The average target implies an upside of 9.22% from the current price of $31.52. The consensus recommendation from 19 brokerage firms is currently "Hold" status, indicating a neutral outlook.

For more detailed information, please refer to the BP PLC (BP) Forecast page and the complete transcript of the earnings call.

References:
[1] https://www.gurufocus.com/news/2972122/bp-bp-projects-increased-production-and-financial-adjustments-in-q2-bp-stock-news
[2] https://www.proactiveinvestors.co.uk/companies/news/1074589/bp-up-2-as-fear-over-prospects-recedes-to-acceptance-1074589.html
[3] https://www.rttnews.com/3552645/bp-expects-up-to-1-5-bln-q2-asset-write-downs-sees-sequential-growth-in-upstream-output.aspx