Seatrium awarded letter of intent for deepwater new-build production unit in US Gulf of Mexico
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jun 04 2024
0mins
Should l Buy BP?
Source: Yahoo Finance
- Seatrium awarded LOI by BP: Seatrium has been awarded a letter of intent (LOI) by BP Exploration & Production to conduct early engineering works for the Kaskida FPU project in the US Gulf of Mexico.
- Project Details: The Kaskida FPU project is a greenfield development located 250 miles southwest of New Orleans in the Keathley Canyon area of the Gulf of Mexico, with a single topside module supported by a four-column semi-submersible hull.
- Contract Conditions: The contract award is subject to mutually agreed terms, management approval, and the final investment decision by BP.
- Impact on Seatrium: The LOI is not expected to significantly impact Seatrium's net tangible assets (NTA) and earnings per share (EPS) for the fiscal year ending Dec 31, 2024.
- Stock Performance: Shares in Seatrium closed 0.56% down at $1.78 on June 4 following the announcement of the LOI from BP.
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Analyst Views on BP
Wall Street analysts forecast BP stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for BP is 84.26 USD with a low forecast of 6.38 USD and a high forecast of 503.69 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
11 Analyst Rating
5 Buy
5 Hold
1 Sell
Moderate Buy
Current: 39.220
Low
6.38
Averages
84.26
High
503.69
Current: 39.220
Low
6.38
Averages
84.26
High
503.69
About BP
BP p.l.c. is a United Kingdom-based integrated energy company. The Company's segments include Gas & low carbon energy, Oil production & operations, Customers & products, and Other businesses & corporate. Its gas business includes regions with upstream activities that produce natural gas, integrated gas and power, and gas trading. Its low carbon business includes solar, offshore and onshore wind, hydrogen and carbon capture and storage and power trading. Oil production & operations segment comprises regions with upstream activities that predominantly produce crude oil, including bpx energy. Customers & products segment comprises its customer-focused businesses, which include convenience and retail fuels, electric vehicle charging, as well as Castrol, aviation and business to business and midstream. It also includes its products businesses, refining and oil trading, as well as its bioenergy businesses. Other businesses & corporate segment comprises technology and bp ventures.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Earnings Beat: BP exceeded top-line estimates in Q4, demonstrating resilience in the oil and gas market while laying a positive foundation for Q1 and FY26 outlook, which may attract more investor interest.
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- Investor Sentiment: As energy prices become more volatile, market expectations for future energy demand are becoming more cautious, potentially leading to short-term capital shifts towards more stable sectors, thereby affecting the financing capabilities of energy companies.
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- BP Suspends Buyback: BP Plc suspended its stock buyback program to strengthen its balance sheet, resulting in a 6% drop in its ADRs in the U.S., reflecting the company's cautious approach amid market volatility.
- ZoomInfo Downgrade: ZoomInfo Technologies forecasted first-quarter earnings per share between 25 to 27 cents, below analysts' expectations of 27 cents, leading to a 10% decline in its stock price, which may affect market confidence and investor sentiment.
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- Debt Target Unchanged: Despite potential savings from halting buybacks, BP has kept its net debt target unchanged at $14B-$18B through 2027, highlighting ongoing challenges in debt reduction, which surprised analysts given the expected savings.
- Capital Expenditure Cuts: BP plans to lower its capital expenditure cap for 2026 to $13.5B from $14.5B last year, while increasing its cost reduction target to $6.5B by the end of 2027, reflecting a strong emphasis on cost control and financial prudence.
- New Discovery Assessment: BP's Bumerangue discovery offshore Brazil, touted as the largest hydrocarbon find in 25 years, is set to undergo an appraisal program by year-end to assess commercial viability, with estimated reserves of 8B barrels of liquids, potentially driving future growth.
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- Debt Management Strategy: The company has decided to suspend stock buybacks to allocate excess cash towards debt reduction, aiming to lower net debt to between $14 billion and $18 billion by the end of 2027, reflecting a strong emphasis on financial stability.
- Segment Performance: The Oil Production & Operations segment recorded a replacement cost profit of $1.7 billion, with underlying profit adjusted down to $2.0 billion due to impacts from production mix and lower income share, highlighting pressures in the market environment.
- Future Outlook: BP anticipates capital expenditures in the range of $13 billion to $13.5 billion for 2026, with upstream production expected to slightly decline, demonstrating a cautious approach in response to industry challenges while also projecting approximately $1.6 billion in Gulf of America settlement payments.
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