Last checked at 
LONDON (Alliance News) - BP PLC Tuesday reported a drop in earnings during the fourth quarter of 2014 and announced further cuts to its capital expenditure budget for 2015 and significant impairment charges as it reacted to the recent steep drop in oil prices.
Underlying cost replacement profit for the fourth quarter ended December 31, was USD2.2 billion, significantly lower than the USD2.8 billion reported a year earlier, but higher than analysts had expected.
BP has slashed its capital expenditure for 2015 to USD20 billion compared woth its previous budget of USD24 billion to USD26 billion.
At the end of 2014, BP carried net debt of USD22.6 billion, equivalent to a gearing level of 16.7%, which is in the company's guidance of between 10% to 20%
BP posted a USD3.6 billion post-tax net charge for non operating items in the fourth quarter, mainly relating to impairments of its upstream assets and to reflect the current low oil price environment. As a result, BP reported a replacement cost loss of USD969 million in the fourth quarter.
The total cumulative pretax charge for the Gulf of Mexico oil spillthe end of 2014 was USD43.5 billion. An additional charge of USD477 million was taken in the fourth quarter reflecting increased provision for litigation costs and additional business economic loss claims, it said.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
Copyright 2015 Alliance News Limited. All Rights Reserved.
