July 31, 2018 / 6:39 AM / 14 days ago

CORRECTED-UPDATE 1-BP Q2 profit above expectations at $2.8 bln

(Corrects production numbers in paragraph six)

* H1 output rises to 3.662 mln barrels of oil equivalent per day

* Confirms dividend rise to 10.25 cents/share

* Gearing at end-June 27.8 pct

LONDON, July 31 (Reuters) - Higher oil prices and increased output boosted BP’s second-quarter profit to $2.8 billion, four times that of a year earlier.

The company also confirmed it would increase its quarterly dividend for the first time in nearly four years, offering 10.25 cents a share.

BP is turning a corner after the slump in oil prices and as it gradually shakes off a $65 billion bill for penalties and clean-up costs of the deadly 2010 Deepwater Horizon spill.

Underlying replacement cost profit, the company’s definition of net income, exceeded forecasts of $2.7 billion, according to a company-provided survey of analysts.

It earned $0.7 billion a year earlier and $2.6 billion in the first quarter.

First-half production rose to 3.662 million barrels of oil equivalent per day, including output at Rosneft, from 3.544 million barrels of oil equivalent per day a year earlier.

Benchmark Brent crude futures, currently over $74 a barrel, have risen around 16 percent over the first half of 2018 and around 60 percent since June 30, 2017.

In its biggest deal in nearly 20 years, BP last week agreed to buy U.S. shale oil and gas assets from global miner BHP Billiton for $10.5 billion, expanding the British oil major’s footprint in oil-rich onshore basins.

BP was also buying back shares to the tune of $200 million in the first half of this year.

In the second quarter, it paid off $700 million for the spill on a post-tax basis.

Gearing, the ratio between debt and BP’s market value, declined to 27.8 percent at the end of the quarter from 28.1 percent at the end of March. Net debt was $39.3 billion at the end of June compared with $40 billion at the end of March.

Reporting by Shadia Nasralla; editing by Jason Neely and Kirsten Donovan

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