Editing BP p.l.c.
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== '''<u>Operations</u>''' == | == '''<u>Operations</u>''' == | ||
=== | === Business Overview & Industry Chain ([https://www.youtube.com/watch?v=o_m0a1JZdco&ab_channel=bp youtube]) === | ||
* Exploration: one of BP's distinctive strengths | * Exploration: one of BP's distinctive strengths | ||
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*** operating a <u>wind business</u> in the United States | *** operating a <u>wind business</u> in the United States | ||
=== | === Sustainability Strategy -- "The Three Pillars" === | ||
* Resilient Hydrocarbons | * Resilient Hydrocarbons | ||
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** <u>Target Source</u>: Hydrogen & Renewables and Power | ** <u>Target Source</u>: Hydrogen & Renewables and Power | ||
=== | === Productions & Operations ([https://www.bp.com/en/global/corporate/what-we-do/production-and-operations.html site]) === | ||
[[File:Production- -operations.png|thumb|2400x2400px|BP global production asset distribution|center]] | [[File:Production- -operations.png|thumb|2400x2400px|BP global production asset distribution|center]] | ||
Mission: find and develop hydrocarbon resources, operate oil and gas production assets, as well as refineries, pipelines and terminals around the world. | Mission: find and develop hydrocarbon resources, operate oil and gas production assets, as well as refineries, pipelines and terminals around the world. | ||
=== | === Products & Offerings === | ||
==== Global Consumer Project ==== | ==== Global Consumer Project ==== | ||
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** "Moving the products that keep our customers moving" – by pipeline or truck, rail or ship. We <u>safely deliver energy</u> to where it is needed, while developing low carbon biofuels for the future. | ** "Moving the products that keep our customers moving" – by pipeline or truck, rail or ship. We <u>safely deliver energy</u> to where it is needed, while developing low carbon biofuels for the future. | ||
=== | === Recent Projects === | ||
* <u>2021</u> [https://www.bp.com/en_gb/united-kingdom/home/where-we-operate/reimagining-teesside/hygreenteesside.html Green hydrogen project in Teesside, UK]: This project will produce green hydrogen from renewable energy sources, such as wind and solar. The hydrogen will be used to power buses, trucks, and other vehicles. | * <u>2021</u> [https://www.bp.com/en_gb/united-kingdom/home/where-we-operate/reimagining-teesside/hygreenteesside.html Green hydrogen project in Teesside, UK]: This project will produce green hydrogen from renewable energy sources, such as wind and solar. The hydrogen will be used to power buses, trucks, and other vehicles. | ||
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The table below shows revenue, EBIT and other financials for the previous 5 years. Revenue has shown an overall decline over the previous five years. The steep decline in 2020 was due to the global coronavirus pandemic. The jump in earnings from 2020 to 2021 and 2022 is due to the global volatility in oil prices as a result of the conflict in Ukraine. NCWC is non-cash working capital, and is calculated to be used in the DCF valuation below. | The table below shows revenue, EBIT and other financials for the previous 5 years. Revenue has shown an overall decline over the previous five years. The steep decline in 2020 was due to the global coronavirus pandemic. The jump in earnings from 2020 to 2021 and 2022 is due to the global volatility in oil prices as a result of the conflict in Ukraine. NCWC is non-cash working capital, and is calculated to be used in the DCF valuation below. | ||
{| class="wikitable" | {| class="wikitable" | ||
|+Historical Financials | |+Historical Financials | ||
| '''Units ($m)''' | | '''Units ($m)''' | ||
|'''2018''' | |'''2018''' | ||
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Notes - P&M = Production and Manufacturing, D&A = Distribution and Administration. | Notes - P&M = Production and Manufacturing, D&A = Distribution and Administration. | ||
[[File:Historical Revenue bp.png|center|thumb|735x735px]] | [[File:Historical Revenue bp.png|center|thumb|735x735px]] | ||
=== Forecasts === | === Forecasts === | ||
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|+WACC Calculation | |+WACC Calculation | ||
| '''Risk Free Rate of Return''' | | '''Risk Free Rate of Return''' | ||
|4.5% | |4.5% | ||
|- | |- | ||
| '''Beta''' | | '''Beta''' | ||
|1.17 | |1.17 | ||
|- | |- | ||
| '''Market Rate of Return''' | | '''Market Rate of Return''' | ||
|7.4% | |7.4% | ||
|- | |- | ||
| '''Cost of Equity''' | | '''Cost of Equity''' | ||
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|- | |- | ||
| '''Credit Spread''' | | '''Credit Spread''' | ||
|1.42% | |1.42% | ||
|- | |- | ||
| '''Cost of Debt''' | | '''Cost of Debt''' | ||
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|- | |- | ||
|'''Shares Outstanding''' | |'''Shares Outstanding''' | ||
|17,270.00 | |17,270.00 | ||
|- | |- | ||
|'''Share Price''' | |'''Share Price''' | ||
|$ 6.13 | |$ 6.13 | ||
|- | |- | ||
| '''Equity''' | | '''Equity''' | ||
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|- | |- | ||
|'''Weighted Average Maturity''' | |'''Weighted Average Maturity''' | ||
|14.00 | |14.00 | ||
|- | |- | ||
|'''Interest Expense''' | |'''Interest Expense''' | ||
|1,632.00 | |1,632.00 | ||
|- | |- | ||
| '''Debt''' | | '''Debt''' | ||
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|'''5.8%''' | |'''5.8%''' | ||
|} | |} | ||
The WACC for bp used in the DCF valuation was 5.8%, note the share price is of bp on it's primary listing, the London stock exchange | The WACC for bp used in the DCF valuation was 5.8%, note the share price is of bp on it's primary listing, the London stock exchange. The price has been converted from GBP to USD for ease of calculation. | ||
=== DCF === | === DCF === | ||
Units are in $ millions. | Units are in $ millions. | ||
{| class="wikitable" | {| class="wikitable" | ||
| '''FCF''' | | '''FCF''' | ||
|'''25,351.15''' | |'''25,351.15''' | ||
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The following table compares bp to it's major competitors in the oil and gas industry globally. | The following table compares bp to it's major competitors in the oil and gas industry globally. | ||
{| class="wikitable" | {| class="wikitable" | ||
|'''Company''' | |'''Company''' | ||
|'''P/E''' | |'''P/E''' |