BP PLC (NYSE: BP) reported second-quarter 2017 results before markets opened Tuesday. The oil and gas supermajor posted adjusted diluted earnings per American depositary share (ADS) of $0.21 on revenues of $57.37 billion. In the same period a year ago, the company reported earnings per ADS of $0.23 on revenues of $47.28 billion. Analysts estimated earnings per ADS of $0.18 on revenues of $48.88 billion. One ADS is equal to six ordinary shares.

BP’s adjusted replacement cost profit (essentially the company’s adjusted net income/loss) in the second quarter totaled $553 million, compared with a loss of $2.25 billion in the year-ago quarter. Unadjusted, the replacement cost profit totaled $144 million, or $0.17 per ADS, compared with a net loss of $1.42 billion and a net loss per ADS of $0.72 in the second quarter of 2016.

The company’s chief financial officer said in an interview that BP has lowered its break-even price from $60 a barrel (for Brent crude) in the first quarter of this year to $47 a barrel. That is good news for BP and its investors because prospects for a Brent price above $55 a barrel have dimmed. The company has set a break-even price target of $35 to $40 a barrel.

CEO Bob Dudley said:

We continue to position BP for the new oil price environment, with a continued tight focus on costs, efficiency and discipline in capital spending. We delivered strong operational performance in the first half of 2017 and have considerable strategic momentum coming into the rest of the year and 2018, with rising production from our new Upstream projects and marketing growth in the Downstream.

Daily average hydrocarbons production totaled 2.43 million barrels of oil equivalent, up by 9.9% from year-ago production of 2.21 million barrels. Sequentially, production rose about 1.8%.

BP’s price realizations for liquids fell from $49.87 a barrel in the first quarter of 2017 to $46.27. In the year-ago quarter the price realization was $39.68 a barrel. Natural gas averaged $3.19 per thousand cubic feet in the second quarter, down from $3.50 in the 2017 first quarter and up from $2.66 in the second quarter of 2016.

Downstream (refining) adjusted pretax profits slipped from $1.51 billion a year ago to $1.41 billion. In its outlook statement BP said it expects a similar level of industry refining margins and that North American heavy crude oil differentials will remain under pressure. BP’s refining marker margin was $13.80 a barrel in the second quarter, up from $11.70 in the first quarter and flat with the year-ago second quarter.

To date BP has paid out $63.21 billion in pretax charges related to the disaster that claimed the lives of 11 workers and dumped millions of barrels of crude oil into the Gulf of Mexico in April 2010. In the second quarter the company paid out $2 billion in claims and took a charge of $347 million for further outstanding claims and a charge of $121 million related to financing costs. BP expects total payouts of $4.5 billion to $5.5 billion for the year, unchanged from its estimate at the end of the prior quarter.

BP’s organic capital spending totaled $4.3 billion in the second quarter and totals $7.9 billion for the first half of the year. Divestment proceeds in the second quarter totaled $500 million and $700 million for the first half of 2017.

The company also announced its regular quarterly dividend of $0.60 per ADS, a dividend yield of 6.83% at Monday night’s closing price.

BP’s ADSs closed down less than 0.1% on Monday, at $35.14 in a 52-week range of $32.50 to $38.68. They traded up about 3.3% in Tuesday’s premarket session to $36.32. The 12-month consensus price target was $37.52 before Tuesday’s report.

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