BG shares tumble as UK oil and gas group warns growth is over

| October 31, 2012 | 0 Comments

By
This Is Money Reporter

06:23 EST, 31 October 2012


|

11:31 EST, 31 October 2012

BG shares fell 14 per cent today after the British oil and gas group announced it did not expect to grow production next year.

The firm, posting its third quarter results, blamed delays to projects in the North Sea, Egypt, as well as a scaling back of activities in U.S. shale gas, while it said production growth this year would be 3 per cent.

Third quarter earnings rose by 16 per cent to $1.189billion, beating forecasts of $1.1billion, on production that was 5 per cent higher in the quarter and helped by a robust performance in its LNG business.

Shares fall: BG blamed delays to projects at its Egyptian site (pictured), in the North Sea and a scaling back of activities in U.S. shale gas

Shares fall: BG blamed delays to projects at its Egyptian site (pictured), in the North Sea and a scaling back of activities in U.S. shale gas

BG Group’s chief executive Frank
Chapman said: ‘Production rose by some 5 per cent as new projects ramped
up, but was held back by the previously announced shutdown of the
non-operated Elgin/Franklin field and our earlier decision to scale back
drilling in the USA due to low natural gas prices.

‘As a result of these factors, along with the deferral of the Jasmine
start-up to 2013, production growth in 2012 of some 3 per cent is now
forecast.’

BG Group had downgraded a year-production rate in July following an
ongoing shut-down of a field in the North Sea, among other issues.

BG Group, which is expected to develop big projects in Australia and
Brazil over the next three years, said it had signed a $1.93billion,
20-year agreement to supply China’s CNOOC with LNG from a project in
Australia.

Shares were last down 182.50p at 1,147p.
 

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