BP Amoco Earnings Drop 41%
BP Amoco first quarter replacement cost profit, before
exceptional items, was $761 million after adjusting for special
charges of $84 million for merger integration costs. Results were
down 12% from the previous quarter and down 41% from the first
quarter of 1998. The decrease reflected a substantial deterioration
in the trading environment, the company said.
Domestic gas prices averaged $1.60/Mcf in the first quarter,
compared to $1.80/Mcf in the first quarter of 1998. Domestic gas
production was 2,433 MMcf/d in the first quarter of 1999, up from
2,428 MMcf/d in the first quarter of 1998.
Exploration and production operating profit for the quarter of
$904 million, after adjusting for special charges of $86 million,
was down 26% from the first quarter last year when oil and gas
prices were significantly higher. The effect of lower prices was
partially offset by cost savings and higher production.
Lower cash costs contributed $200 million to results. There was
an exceptional charge for the quarter of $860 million after tax
that related mainly to the first phase of restructuring following
the merger of BP with Amoco. The major components of the
restructuring charge are severance and property rationalization.
BP Amoco Group CEO John Browne said, "This is a good debut
result for BP Amoco in a tough environment. The reasons are
twofold. First, there are underlying performance improvements from
lower cash costs and higher volumes in all businesses and, second,
we are beginning to see the benefits of the merger coming through
to the bottom line."
©Copyright 1999 Intelligence Press Inc. All rights reserved. The
preceding news report may not be republished or redistributed, in
whole or in part, in any form, without prior written consent of
Intelligence Press, Inc.