BP

Very long - should have waited until New Year, but can't see it staying this low, couldn't see it staying this low this side of Xmas. Oh well.


Spent yet more time ploughing through the BP financials. Just recording them here for future reference.

Market cap at 618p = £133.6 bn = $230bn at £:$=1.72.

(per ADVFN - per other sources and per BP's version of number of shares, market cap = £127.5 bn at 618p, or some £6bn/$10bn lower. Still, what's $10 billion between friends, eh?)

9 month after tax profit to Sep 2005 : $18.7 bn
EPS (9 month) : 87.8 cents / 47.7p
Replacement cost profit (9 month) : $14.9 bn
Replacement cost EPS (9 month) : 70 cents / 38p
Operating cash flow (after tax, 9 months) :$22.5 bn
Working capital movement included in cash figure above (normally neutral) : $9.3 bn negative (mainly tax paid and inventory increase)

average crude realisation during above: $49.07
average natural gas realisations : $31.3
crude production : 2,385 mb/d
natural gas production : 8,412 (units)
shares in issue during 9 month period : 20,984 million


Will want to look at full year version of this when available, but it seems reasonable to assume a full year operating cash flow (generation) of $30 billion, after $9bn negative working capital movement and with average crude price of around $50, maybe a little higher. All production is being replaced, so no diminution in reserves. 2005 has actually been a pretty poor year in terms of production and screw-ups - Thunder Horse delays, Katrina and Rita damage - but the upside of that is the stuff is still in the ground, and will be sold at higher prices.

So for 2006, we're looking at higher crude prices than in 2005, on average, neutral working capital movement, ergo around $40 billion operating cash generation.

Or in earnings terms, full year replacement cost EPS will be around 52-55p. Again, with higher crude prices and fewer screw-ups, we're looking at probably 60p for 2006. Reported 2006 EPS for 2005 will be that much higher again, around 65-67p, and for 2006 in excess of 75p, possibly 80p.

And the business is valued at $230 billion / 618p per share? Is it really this much of a bargain? Am I going mad?

Oh well, until the trading statement...