BG Group’s profit beats estimates as LNG sales improve from prior year

By RAKTEEM KATAKEY
Bloomberg

BG Group, which agreed to be acquired by Royal Dutch Shell for $70 billion in April, reported second-quarter profit that beat analyst estimates as production climbed to a record.

Net income fell 65% to $429 million from a year earlier, Reading, England-based BG said Friday in a statement. That beat the $343.7 million estimate of 11 analysts surveyed by Bloomberg.

BG, the UK’s third-biggest oil company, raised its 2015 production forecast to the upper range of its guidance. That underlines the appeal to Shell of BG’s natural-gas assets in Australia and deepwater fields in Brazil. Output in those two countries more than doubled.

“Our production performance was ahead of market expectations,” chief financial officer Simon Lowth said on a conference call. “On the back of that beat on production, notwithstanding the lower prices, we’ve kept a tight lid on costs.”

BG shares rose as much as 1.1% in London trading and were up 0.7% at 1,087 pence as of 8:21 a.m. The stock has gained 19% since the Shell acquisition was announced, after falling 33% last year.

BG’s output forecast for 2015 is 650,000 to 690,000 bpd of oil equivalent. The company produced 703,000 bpd in the quarter, 19% higher than a year earlier, it said. Production doubled to 80,000 bpd in Australia and to 143,000 bbl in Brazil.

Output dropped 23% to 44,000 bpd in Egypt and by 8.9% to 102,000 bbl in the UK.

The company sold 58 cargoes, or 3.6 million metric tons, of liquefied natural gas (LNG) in the quarter, eight more cargoes compared with a year earlier. Sales of LNG climbed after BG started a new project in Australia.

Brent crude in London trading averaged $63.50/bbl in the second quarter, 42% lower than a year earlier.

• Most Read
• Most Commented