Half yearly results

Wednesday, Jul 29 2009 by

Second Quarter Highlights


Exploration & Production volumes increased 7% year-on-year
Gas introduced to Hasdrubal facilities in Tunisia and commissioning underway
Egypt's WDDM Phase V brought onstream
Dragon LNG (Wales) and GNL Quintero (Chile) regasification terminals received first LNG
Excellent flow rates from Tupi Extended Well Test, Santos Basin, Brazil
Iara and Guara: planned capacity up 20%; targeting sanction end 2009
Success at Iracema - step-out appraisal well 33 kilometres from Tupi
Agreement with CNOOC for 20 year sale of 3.6 mtpa from QCLNG
Alliance with EXCO Resources to develop shale gas in Louisiana and Texas
Interim dividend up 20% year-on-year

BG Group Chief Executive Frank Chapman said: "These results demonstrate a resilient performance and rapid progress with the development of our business. In Brazil, we continue to make excellent progress across our pre-salt developments. Our agreement with CNOOC adds further impetus to our plans to establish two LNG trains in the first phase of development of QCLNG in Queensland. Our alliance with EXCO Resources in the US gives us substantial competitively priced resources in the heart of the world's largest gas market."


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BG Group Limited, formerly BG Group plc, is a United Kingdom-based natural gas company. The Company has a portfolio of business interests focused on gas and oil exploration and production and on liquefied natural gas (LNG). It has two business segments: Upstream, which includes exploration and production and liquefaction, and LNG Shipping & Marketing, which combines the development and use of LNG import facilities with the purchase, shipping and sale of LNG and re-gasified natural gas. Its remaining Transmission and Distribution businesses, principally Mahanagar Gas Limited in India, and certain corporate activities are included in the Other activities segment. The Upstream business segment covers exploration and production activities plus liquefaction operations associated with integrated LNG projects. The LNG Shipping & Marketing segment covers activities, including purchases, ships, markets and sells LNG, as well as the Company's interests and capacity in re-gasification facilities. more »

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6 Posts on this Thread show/hide all

MrT 29th Jul '09 1 of 6

The company increased oil and gas output by 7% to 58.5 million barrels of oil equivalent but sales sank 28% to 2.3 billion pounds and second-quarter profit fell 31% due to price declines for gas.

U.S. gas futures averaged $3.81 a million British thermal units in the second quarter, down 67 percent from a year earlier, curbing revenue for producers. In liquefied natural gas, BG Group has shifted to term contracts from spot trades as global economic turmoil erodes demand for energy. LNG prices have fallen as much as 75 percent from last year’s levels.


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StrollingMolby 28th Oct '09 2 of 6

Third Quarter Highlights

? Total operating profit of £856 million and cash generated by operations of £1,186 million
? Production volumes up 5% on third quarter 2008
? Hasdrubal now expected onstream by 30 November
? Material exploration and appraisal success in Brazil - enhances development options
? Tupi development progressing well and tendering for next phases underway
? Good progress with QCLNG upstream, trunkline and plant towards 2010 sanction
? EXCO drilling activity ramping up; seven rigs now operating, 14 planned by Q1 2010

BG Group's Chief Executive, Frank Chapman said:

These results demonstrate once again the strength of BG Group's integrated gas business and this, together with current production levels around 700 000 barrels per day, up 12% on Q4 2008, provides us with confidence in the outlook for the Group's performance. BG Group has assembled an array of material, long-life projects, and we are now entering a period where we can look forward to these projects driving exceptional growth to the end of the next decade.

Plenty more information contained in the announcement regarding production and development from fields in Brazil, US, Egypt, Norway, Thailand, North Sea, and India. Not much on Aussie LNG, just capex really.

BG also announce the results of DST at Corcovado on the edge of the Santos Basin:

BG Group has completed testing operations on Corcovado 1 (BM-S-52, BG Group 40%). The well flowed both condensate and gas on drill stem testing. The drilling of both Corcovado 1 and 2 has extended the partners' understanding of the Corcovado structure, one of the major structural highs on the edge of the Santos Basin pre-salt area, where the play is still evolving. The two-well campaign has successfully proved both the presence of moveable hydrocarbons and identified additional prospectivity on the flanks of the high. The well results are being evaluated to determine future drilling plans.


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djpreston 28th Oct '09 3 of 6

In reply to StrollingMolby (post #2)

Another very solid set of results from BG. The company remains, to me at least, a classic long term hold (if it isnt acquired). The reason is, as they highlight, the fact that they have assembled a portfolio of long life and highly material assets that will ensure they are capable of driving production growth ahead of the super majors for many years to come.

Fund Management: European Wealth
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StrollingMolby 29th Oct '09 4 of 6

Questor says BUY

The numbers released yesterday were reassuringly solid, slightly beating analyst expectations. Third-quarter pre-tax profits fell 45pc to £838m on the lower commodity prices, but production was up 5pc to 56m barrels of oil equivalent per day and rising.

One project in Tunisia has been delayed but over the next quarter production levels are expected to be around 700,000 barrels per day, up 12pc on the fourth quarter of last year.

BG Group's potential for growth is its most attractive quality. Its recent oil discovery at Guara off the coast of Brazil was materially larger than even BP's "giant" Tiber prospect, with a floating facility due to start work in 2012.

The Brazilian Santos Basin area, where BG has a very strong presence, has provided the largest hydrocarbon discovery in the world for 30 years.

BG has a 30pc stake in the Carioca field, which could contain up to 33bn barrels of oil equivalent. News flow from this location has supported the share price throughout 2009 – and there ought to be more updates in the same vein next year.

Part of the company's strength lies in its mix of long-term supply contracts negotiated when energy prices were higher and more flexible liquefied natural gas (LNG) shipments, leaving it able to divert supply to markets where there is a premium.

In its quest to become the world's third-largest supplier of LNG, the company entered the Australian market with its Queensland Curtis project, where it expects coalbed methane production to come online by 2014.

It is also taking an interest in US shale gas, where there is huge potential to supply the domestic American market through existing infrastructure.

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StrollingMolby 23rd Mar '10 5 of 6

Sale of non-core US power assets announced today, for $450m, which allows greater management focus on the oil, gas & LNG businesses.

BG Group today announced that it has signed a Sale and Purchase Agreement with Energy Capital Partners for the sale of all of its power plants in the USA for a total consideration of US$450 million.


The power plants to be sold under this agreement are:

·     Dighton power plant (168 MW) located in Dighton, Massachusetts;

·     Lake Road power plant (812 MW) located in Killingly, Connecticut; and

·     Masspower power plant (264 MW) located in Indian Orchard, Massachusetts.


Closing of the transaction is subject to receiving the customary Federal and State regulatory approvals. The transaction is expected to complete in second quarter 2010.

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djpreston 23rd Mar '10 6 of 6

In reply to StrollingMolby, post #5

Agreed. Its a sensible step but what a loss they made on the sale.

If I recall correctly, they bought the three plants back in 06/07 for $925m on the basis that it woudl help them maximise the value form its LNG business.

Given the economic headwinds, the price for power assets in the US has been tumbling so they have probably got a decent price, though I suspect the buyers will ultimately prove to have got the best of the deal.

The interesting thing is that the boom in unconventional gas production in the US has eaten away the margins for LNG given the unconventional gas supply is so plentiful and cheap. I cant see this changing much in the short to medium term so US Nat Gas prices look capped.

Sorry for rambling.

Fund Management: European Wealth
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