BP shares rise on strong Q2 results, debt reduction

Investing.com -- Shares of BP (LON:BP) climbed on Tuesday after the company reported robust financial performance for the second quarter of 2024. Strong operating cash flow and a significant reduction in net debt fueled the positive results.

The company generated substantial cash flow of $8.1 billion, enabling it to lower net debt to $22.6 billion. BP's net income of $2.76 billion slightly exceeded analyst expectations, while its underlying cash flow from operations (CFFO) excluding working capital also surpassed forecasts, as per RBC Capital Markets.

The company reported a 10% dividend increase, in line with RBC's expectations but surpassing market consensus. Additionally, BP confirmed that its share buyback program will continue at a quarterly pace of $1.75 billion, aligning with RBC's forecast.

BP is advancing several key growth projects, including the Kaskida development in the Gulf of Mexico. The company is also streamlining its bioenergy business by taking full ownership of bp Bunge (NYSE:BG) Bioenergia and scaling back new biofuels initiatives.

"We are driving focus across the business and reducing costs, all while building momentum in our drive to 2025," said BP CEO Murray Auchincloss.

BP remains confident in its ability to generate strong cash flow and plans to return at least 80% of surplus cash flow to shareholders through dividends and buybacks. 

The company aims to balance investments in traditional operations with allocations toward lower-carbon energy initiatives, while maintaining financial discipline.