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The New York Times: BP Profit Jumps on High Oil Price

Published: February 7, 2006
Filed at 2:37 a.m. ET
LONDON (Reuters) – BP Plc (BP.L) reported a 26 percent surge in fourth-quarter replacement cost profit to $4.432 billion on Tuesday thanks to high oil prices.
The world's second-largest listed oil firm by market value said in a statement the replacement cost profit, which excludes changes in inventory values, would have been higher but for a $553 million charge for non-operating items, mainly due to a notional, non-cash loss on North Sea gas contracts.
Excluding such one-offs, BP's underlying profit was $4.985 billion, versus $4.765 billion for the last quarter of 2004.
A Reuters poll of eight analysts gave an average forecast of $5.75 billion for BP's fourth quarter replacement cost profit excluding exceptional items.
BP's replacement cost profit for 2005 rose 25 percent to $19.314 billion. This was short of the $23 billion profit, calculated on a similar basis, that Royal Dutch Shell Plc (RDSa.L) reported for 2005, last week.
Europe's biggest company by market value said it had replenished reserves by 100 percent on a UK reporting basis and 95 percent under SEC rules which take account of year-end prices, giving it a proven reserve base of over 18 billion barrels of oil and gas equivalent at end-2005.
On top of proven reserves, BP also added nearly 2 billion new barrels to its non-proven resource base last year, taking it to a total of 41 billion barrels, of which the company expects to convert some 11 billion barrels into proven reserves by 2010.
BP said that assuming an oil price of $40 a barrel, output this year would be between 4.1 million and 4.2 million barrels a day.
At a similar price, BP said it should be able to distribute around $50 billion to shareholders between 2006 and 2008, and that this would rise to around $65 billion if the oil price was around $60 a barrel.

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