ВР: First quarter 2011 results

Non-operating items (including amounts relating to the Gulf of Mexico oil spill) and fair value accounting effects for the first quarter, on a post-tax basis, had a net favourable impact of $107 million compared with a net unfavourable impact of $49 million in the first quarter of 2010.
Finance costs and net finance income or expense relating to pensions and other post-retirement benefits were $239 million for the first quarter, compared with $228 million for the same period last year.
The effective tax rate on replacement cost profit for the first quarter was 37% compared with 34% a year ago. For the full year, our expectation is that the effective tax rate will be around 32-34%, in line with previous guidance. Excluding the impact of a $683-million one-off deferred tax adjustment in respect of the recently enacted increase in the supplementary charge on UK oil and gas production, the effective tax rate for the first quarter was 30%. The UK government has also announced its intention to restrict the tax relief available on decommissioning expenditure to 50% in 2012. This change is not yet substantively enacted but would be likely to give rise to an additional tax charge in 2012 in the order of $0.4 billion.
Including the impact of the Gulf of Mexico oil spill, net cash provided by operating activities for the first quarter was $2.4 billion, compared with $7.7 billion in the same period of last year. The amounts for the first quarter of 2011 included a net cash outflow of $2.8 billion relating to the Gulf of Mexico oil spill and also included the impact of increases in working capital as a consequence of higher oil prices.
Net debt at the end of the quarter was $27.5 billion, compared with $25.2 billion a year ago. The ratio of net debt to net debt plus equity was 21% compared with 19% a year ago.
Total capital expenditure for the first quarter was $4.0 billion, all of which was organic. Disposal proceeds were $1.0 billion for the quarter.
The quarterly dividend expected to be paid on 28 June 2011 is 7 cents per share ($0.42 per ADS). The corresponding amount in sterling will be announced on 14 June 2011. A scrip dividend alternative is available, allowing shareholders to elect to receive their dividend in the form of new ordinary shares and ADS holders in the form of new ADSs.
On 14 April, BP announced that, as a result of the continuing interim injunction prohibiting completion, it had agreed with Rosneft to extend the deadline for completing their previously announced share swap agreement until 16 May 2011. This is to allow more time for the arbitration process that was convened to resolve issues raised by Alfa Petroleum Holdings Limited and OGIP Ventures Limited and to determine whether or not the interim injunction prohibiting completion should remain in effect.