BP has reported its best quarterly result for three years after notching up a 71% surge in profits thanks to surging oil prices.
BP has chosen to return part of the windfall to investors by buying back stock issued in lieu of dividends during the downturn, spending $120 million repurchasing 18 million shares in the first quarter. "Our safe and reliable operations and strong financial delivery have continued into 2018", said BP's chief executive.
Operating cash flow excluding payments made following the oil spill in the Gulf of Mexico stood at $5.4bn, including a $1.8bn negative impact from an increase in working capitals.
BP was forced to take a surprise US$1.7 billion charge to net income in the fourth quarter because the cases that did remain were among the largest and most complex.
BP's cash flow - a closely watched measure for oil groups - rose to 3.6 billion U.S. dollars (£2.6 billion) from 2.1 billion United States dollars (£1.5 billion) a year earlier.
BP's results follow a mixed picture from the sector with Royal Dutch Shell RDSa.L and Exxon Mobil XOM.N falling short of forecasts while results from Chevron CVX.N and France's Total TOTF.PA were stronger than expected.
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BP launched seven oil and gas fields in 2017, a record year, and is set to inaugurate six more projects this year including in Egypt, Azerbaijan and Britain's North Sea, which will help it boost production by 800,000 barrels per day (bpd) by 2020, most of it gas.
Continued Downstream earnings growth with strong refining availability in the US.
"The spill payment in the first quarter was "$500 million more than I expected", although that probably means the burden will be lower later this year, said Redburn analyst Rob West, as quoted by Bloomberg. BP left the dividend unchanged at 10 cents a share.
Chief financial officer Brian Gilvary cautioned that the performance was energised only partly by the oil price recovery.
It paid out some US$1.6bn in payments connected to the Gulf of Mexico oil spill, including the US$1.2bn final payment relating to the 2012 settlement with the US Department of Justice. Payments are expected to be just over US$3 billion in 2018, weighted to the first half of the year.
The further hit from the spill in the first quarter sent the firm's debt levels rising to 40 billion United States dollars (£29 billion) from 38.6 billion U.S. dollars (£28.2 billion) a year ago.