BG Profits Down Five Per Cent

By MarEx 2014-02-04 17:50:00

Integrated gas company BG Group’s 2013 financial results have been released with highlights including:

• Business performance total operating profit down 5 per cent at $7.6 billion 
• Upstream total operating profit down 9 per cent; LNG shipping & marketing (S&M) up 3 per cent 
• Delivered all 10 key milestones in 2013; continued to make progress in Brazil and Australia 
• Business performance EPS flat at 128.6 cents; total results EPS down 33 per cent at 64.8 cents 
• Total results included non-cash post-tax impairments in Egypt and US totaling $2.4 billion 
• Issued Force Majeure notices in respect of LNG agreements in Egypt 
• Full year dividend increased by 10 per cent to 28.75 cents per share (18.02 pence per share) 
• 2014 production outlook of 590 - 630 kboed; 2014 profit outlook for LNG S&M at $2.1 - $2.4 billion 
• 2014 unit operating costs range $15.50 – 16.25 / boe; Unit DD&A costs range $12.25 – 13.00 / boe 
• 2015 production outlook of 710 - 750 kboed: expect to be free cash flow positive in 2015 

BG Group’s chief executive, Chris Finlayson said: “In 2013, we met all of our key milestones and continued to progress our growth projects in Australia and Brazil. In 2014, we will see first LNG exports from our QCLNG project in the final quarter and we will continue to ramp up production in Brazil. Clearly, we also have to address the near-term challenges we face in Egypt, and deliver our plans consistently and effectively. Our capital expenditure will begin to decline in 2014 and we continue to expect to be free cash flow positive in 2015.” 
 In 2013, BG Group made important progress on its growth projects and delivered on all of its key milestones. First gas was delivered onto Curtis Island in Australia before year end and the QCLNG project remains on track for first LNG in the fourth quarter of 2014 and within the $20.4 billion first phase budget. Importantly, QCLNG delivered a very good safety performance during its peak construction period. In Brazil, two new FPSOs were brought onstream, and the production performance from the Santos Basin wells continues to exceed expectations. 

Throughout 2013, the business environment in Egypt remained difficult due to the ongoing political and social instability. This contributed to a reduction of 19 LNG cargoes for the year when compared to 2012. The increased exploration spend for the year continued to deliver results focusing on new and existing basins. In particular, the appraisal activity in Tanzania led to total gross recoverable resources being increased from 10 tcf to 15 tcf in 2013, while in Brazil there were excellent flow rates from the fourth appraisal well at Iara. In addition, the group continued to increase its acquisition of acreage, securing more than 48 000 square kilometres and access to two new basins. 

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