The Deepwater Horizon explosion that resulted in a historically large oil slick in the Gulf of Mexico began on April 20, 2010. BP PLC (BP), which operated the well, would like the world to believe that is ages ago. Although the U.K.-based firm continues to be dogged by what adds up to billions of dollars in claims, it can say that its global business largely has recovered. And it has, to the extent that the oil firm raised its dividend and reported a solid quarter. What the passage of time may not have been able to do, the price of oil has:
BP today announced its financial results for the third quarter of 2013. Underlying replacement cost profit for the period was $3.7 billion, compared to $2.7 billion for the previous quarter. Operating cash flow in the quarter was $6.3 billion.
Consistent with its commitment to maintaining a progressive and sustainable dividend policy, BP also announced that it will increase its quarterly dividend by 5.6%, to 9.5 cents per ordinary share, payable in December. Moving forward, BP's board intends to review the level of dividend with the first and third quarter results each year.
As a sign of its rebound, BP is number 18 in the Forbes 2000 list of Global Companies. That is a special distinction because it puts the U.K. company in a league that includes Chevron Corp. (CVX), PetroChina Co. Ltd. (PTR), Royal Dutch Shell PLC (RDS-A) and Exxon Mobil Corp. (XOM). And BP's stock has outperformed Exxon's over the past year.
The good news about BP's dividend follows a court victory earlier in the month in which a district judge put a limit on the amount that BP would have to pay to a portion of the claimants who say they were damaged by the Deepwater Horizon disaster. More importantly, BP is back in the Gulf drilling as quickly as deposits and engineering allow it to.
Many financiers once believed the company would go bankrupt, but BP has done quite the opposite, as it returns more and more money to shareholders.