BP plc’s strong exploration and production (E&P) earnings drove 4Q2004 earnings, with the London-based major reporting profit up 80% over a year earlier. Oil and natural gas production was up more than 4%, reflecting the ramp-up from new Gulf of Mexico wells and overseas investments.

BP also announced a 26% jump in its quarterly dividend to 8.5 cents.

“Our strategy is unchanged and our operations are on track with the plans laid out last year,” said John Browne, BP Group CEO. “We continue to focus on positioning the company for the future and on post-tax cash flow, and shareholder distributions in the form of dividends and share buybacks. BP’s financial condition is very healthy with gearing at 24%, at the bottom of the target range. I believe all of this gives us a strong base for a sustainable future.”

Pro forma profit in the quarter rose to $3.646 billion. Adding back nonoperating charges of $1.13 billion, BP’s profit was $4.8 billion, 80% higher than 4Q2003 and ahead of Thomson First Call estimates of $4.6 billion. For full-year 2004, profits were more than $16 billion, which was short of the UK record of $17.59 billion posted last week by Royal Dutch/Shell Group.

Production for the quarter was 4.095 MMboe/d. Total production for the year was 3.997 MMboe/d, up more than 10% from 2003. For 2005, based on oil prices of $20/bbl, production is expected to fall 4.1-4.2 MMboe/d before any acquisitions or asset sales.

Total natural gas sales volumes worldwide in 4Q2004 were down slightly to 31.4 Bcf/d, compared with 31.726 Bcf/d in 4Q2003. In the United States, gas sales in the quarter were 13.8 Bcf/d, up from 12.12 Bcf/d for the same period a year ago. In North America, average sales of natural gas for 4Q2004 were 24.5 Bcf/d, up from 22.3 Bcf/d in 4Q2003. For the year, average sales were 23.7 Bcf/d, compared with 20.2 Bcf/d in 2003.

BP’s proved reserve replacement ratio, on both UK and U.S.-based accounting standards, was 106% for subsidiaries, 118% for equity-accounted entities and 110% on a combined basis. BP also calculated its reserve replacement ratio on a Securities and Exchange Commission basis, which requires the use of year-end prices. On this basis, the proved reserve replacement ratio for subsidiaries was 78%, for equity-accounted entities was 114% and was 89% on a combined basis.

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