BP(BP.L)：TURNINGPOINTINTHEGOM1019

1、bp 66 f 67788 f 89 q q q f q q q q f 209001122 f 4 deutsche bank markets research rating buy europe united kingdom company bp date 18 october 2012 company update oil the growth in production expected to arise from higher margin tie back barrels; and the shift in the portfolio away from lower margin

2、gas and towards higher margin oil (figure 7) it is hard not to feel that our forward expectations are likely to prove conservative with the delivery of us profit at bp through the recovery period likely to consistently surpass analyst expectations. net income should gain from $7bn of macondo related

3、 deferred tax recovery operational improvement aside one other feature is in our opinion worthy of mention at this stage. through this period of low us profits and high macondo-related costs a review of bps financial statements shows that the company has also built up a now substantial deferred tax

4、credit. by the 2012 half year stage this stood at $7.3bn. consequently, not only would we expect reported ebit to improve as we move forwards. cash flow should also benefit nicely as bp moves to faster recover part of the negative of its macondo outlay. figure 7: bps us business mix is not only less

5、 gassy. its liquid barrels are also shifting to higher margin areas figure 8: gross production for producers on thunder horse by month high decline but huge initial flow kboe/d 100% gom oilalaska oilother oilnatural gas 60000 90% 80% 70% 60% 50% 40% 30% 20% 50000 40000 30000 20000 10000 10% 0 123456

6、78910111213141516171819 0% 2006200720082009201020112012201320142015 ta001ta003ta004td001average source: deutsche bank deutsche bank ag/london source: deutsche bank page 7 3000 18 october 2012 integrated oils bp away from the gom angola and the whiting upgrade look key operationally our clear view is

7、 that recovery in gulf of mexico volumes will prove absolutely central to an improvement in profits at bp with performance here proving key to forecast upside. staying with those operational aspects of the business that we believe are likely to prove central to performance over the next 12-18 months

8、 we would however also highlight two other developments that we believe will be important, namely the build in production in angola and the commissioning of the upgraded 450kb/d whiting refinery. angola project start ups drive strong cash flow starting with angola, and as illustrated below, with sev

9、eral significant, very high margin projects scheduled to commence production and ramp over the 2012-14 period we would expect the country to prove an important source of barrel growth and profit improvement for bps upstream. to the extent that the start up of several of these strikes us as having be

10、en pushed back through the course of 2012, most significantly psvm and angola lng, this suggests additional profit momentum in 2013/2014 with cash flow benefitting significantly from initial cost recovery under the various pscs. overall, we estimate that angolan volumes should expand by c40% over th

11、e 2012-14 period with cash flow by 2014 some $1.5bn above its 2011 levels. refining completion of the wrmp should add material cash in 2014 upstream actions aside, the near term gom and angolan driven improvement in bps cash flow should also be augmented by the completion of both its refinery modern

12、ization programme at whiting and the sale of some 700kb/d of disadvantaged refining capacity at texas city and carson. designed to allow the 450kb/d whiting, ohio refinery to utilize canadian heavy crudes the start up here should not only add significantly to the refinerys margin capture adding a po

13、tential $500m or so to post tax cash flows. it should also see a c$800m reduction in annual downstream capex requirements. combined with the capex obviation achieved post the recent sales of the texas city and carson refineries, neither of which was believed to be contributing meaningfully to profit

14、, this should also help support a marked $1.0-1.5bn improvement in downstream cash flow, the full impact of which we would expect to be felt in the 2014 year. figure 9: angola: the start up of several projects should prove a strong near term driver of production . figure 10: and an even more signifi

15、cant uplift in free cash flow over the 2011-14 period kboe/d 250 block 17 base psvm - b31 angola lng block 15 base pazflor - b17 clochas - b15 greater plutonio - b18 clov - b17 $m free cash 3500 delivery of psvm, angola lng, angolan cash flow 200 150 100 50 2500 2000 1500 1000 500 0 -500 clochas and

16、 pazflor drives substantial angolan cash uplift 0 200820092010201120122013201420152016 -1000 2003200420052006200720082009201020112012201320142015 source: deutsche bank page 8 source: deutsche bank deutsche bank ag/london a) b) 18 october 2012 integrated oils bp valuation and outlook with multiple ev

17、ents of potentially significant materiality anticipated over the coming weeks, not least a conclusion on the tnk-bp transaction, a possible share buy back (we doubt it) and the potential for settlement with the doj (lump payment, staged payment, tax deductible or not?) the outlook for profits, earni

18、ngs and cash flow is clearly confronted by a significant number of variables at present. as a consequence trying to pinpoint earnings or free cash flow/dacf yields and multiples at the present time with any great confidence is we would say somewhat challenging to put it mildly. certainly as things s

19、tand we see bp as modestly undervalued. neither a multiple on 2013 eps of 7.5x nor a fcfy including m nyse: bp). bp is acquiring devons operations in azerbaijan, offshore brazil and the deepwater gulf of mexico. the two parties have also signed a joint venture heads of agreement to combine their res

20、pective jackfish and kirby oil sands projects in alberta, canada. for disclosures pertaining to recommendations or estimates made on securities other than the primary subject of this research, please see the most recently published company report or visit our global disclosure look-up page on our we

21、bsite at http:/ page 14deutsche bank ag/london securityprice 11 4 1.7. 2.8. 3.9. 4. 5. 6. 18 october 2012 integrated oils bp analyst certification the views expressed in this report accurately reflect the personal views of the undersigned lead analyst(s) about the subject issuer and the securities o

22、f the issuer. in addition, the undersigned lead analyst(s) has not and will not receive any compensation for providing a specific recommendation or view in this report. lucas herrmann historical recommendations and target price: bp (bp.l) (as of 10/18/2012) 700.00 600.00 1 23 previous recommendation

23、s strong buy buy 500.00 5 6 7 8 9 1012 market perform underperform not rated suspended rating 400.00 300.00 200.00 100.00 0.00 current recommendations buy hold sell not rated suspended rating *new recommendation structure as of september 9,2002 oct 09jan 10 apr 10jul 10oct 10jan 11 apr 11 date jul 1

24、1oct 11jan 12 apr 12jul 12 27/10/2009: 11/01/2010: 31/03/2010: 17/06/2010: 27/07/2010: 07/01/2011: buy, target price change gbp640.00 buy, target price change gbp680.00 buy, target price change gbp720.00 buy, target price change gbp480.00 buy, target price change gbp520.00 buy, target price change g

25、bp580.00 02/02/2011: 04/04/2011: 07/02/2012: 10. 01/05/2012: 11. 03/07/2012: 12. 31/07/2012: buy, target price change gbp550.00 buy, target price change gbp575.00 buy, target price change gbp550.00 buy, target price change gbp525.00 buy, target price change gbp500.00 buy, target price change gbp480.

26、00 deutsche bank ag/londonpage 15 18 october 2012 integrated oils bp equity rating keyequity rating dispersion and banking relationships buy: based on a current 12- month view of total share-holder return (tsr = percentage change in share price from current price to projected target price plus pro-j

27、ected dividend yield ) , we recommend that 400 350 300 250 41 % 52 % investors buy the stock. sell: based on a current 12-month view of total share- holder return, we recommend that investors sell the stock hold: we take a neutral view on the stock 12-months 200 150 100 50 0 38 % buy 30 % hold 6 %40

28、 % sell out and, based on this time horizon, do not recommend either a buy or sell. notes: companies coveredcos. w/ banking relationship 1. newly issued research recommendations and target prices always supersede previously published research. 2. ratings definitions prior to 27 january, 2007 were: b

29、uy: expected total return (including dividends) of 10% or more over a 12-month period european universe hold:expectedtotalreturn(including dividends) between -10% and 10% over a 12- month period sell: expected total return (including dividends) of -10% or worse over a 12-month period page 16deutsche

30、 bank ag/london 18 october 2012 integrated oils bp regulatory disclosures 1. important additional conflict disclosures aside from within this report, important conflict disclosures can also be found at https:/ under the disclosures lookup and legal tabs. investors are strongly encouraged to review t

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