Business | Oil & Gas
BG posts 59% jump in earnings
BG Group Plc, the UK's third- largest oil and gas producer, said earnings surged 59 per cent to a record in the second quarter because of higher prices for liquefied natural gas and increased production.
- Bloomberg
- Published: 23:37 July 24, 2008
London: BG Group Plc, the UK's third- largest oil and gas producer, said earnings surged 59 per cent to a record in the second quarter because of higher prices for liquefied natural gas and increased production.
Net income climbed to £747 million ($1.49 billion), or 22.1 pence a share, from £471 million, or 13.8 pence, in the year-earlier period, the Reading, England-based company said today in a statement. Excluding disposals and other one- time items, profit beat analysts' estimates.
"BG has a good track record of beating the market'' consensus and "surprising positively with exploration success," said Jason Kenney, an analyst at ING Wholesale Banking in Edinburgh. "Profit-taking is possible despite the record numbers" as oil prices slip from recent highs, he said.
Largest supplier
BG is the largest supplier of LNG from the Atlantic Basin to Asia.
It switched some cargoes from the US market after Asian demand for the fuel rose following the closure of the world's biggest nuclear power plant in Japan last year.
Oil prices, which were on average 90 per cent higher in the second quarter compared with a year earlier, have dropped 14 per cent from a record $147.27 a barrel on July 11.
Profit excluding disposals and other one-time items was £807 million. That beat the £800 million median estimate of seven analysts surveyed by Bloomberg.
BG fell 38 pence, or 3.3 per cent, to 1,102 pence as of 8:31 a.m. in London. The stock is down 4.2 per cent this year.
Together with its partners, BG discovered gas at the Hassi Ba Hamou field in Algeria in the quarter. It's also evaluating results from the Ververis well in the Barents Sea.
BG also had its "seventh consecutive success" at the Bongkot North field in Thailand. It also confirmed the "presence of hydrocarbons in a separate structure" to an initial discovery at the Jasmine field in the UK sector of the North Sea.
LNG is natural gas that has been chilled to liquid form for transportation by ship to destinations not connected by pipeline.
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