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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| BG Grp. | LSE:BG. | London | Ordinary Share | GB0008762899 | ORD 10P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 1,062.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Jun 2019 to Jun 2024
TIDMBG.
RNS Number : 9379P
BG GROUP plc
31 October 2012
BG Group plc
2012 THIRD QUARTER & NINE MONTHS RESULTS
Third Quarter Key Points
-- Earnings up 16% to $1 189 million -- E&P production up 5% to 59.4 mmboe; E&P total operating profit up 13%
-- Full year 2012 E&P production growth forecast at some 3%; 2013 production expected in line with 2012
-- LNG total operating profit up 24%; full year forecast at upper end of guidance range -- QCLNG progressed towards first LNG in 2014, with a record 135 wells drilled in the quarter
-- In Brazil, good progress with drilling and FPSO programmes; reserves/resources independently certified
Hot Features
Premium
-- Heads of agreement signed to sell QCLNG stake and an additional 5 mtpa of LNG to CNOOC
-- Portfolio rationalisation to release $7.6 billion of capital by mid-2013, exceeding target
-- Tanzania gross recoverable resources near 10 tcf after sixth consecutive gas discovery
-- Exploration progress in Australia, Brazil, India, Kenya and Uruguay
Third Quarter Nine Months
==================== ==================
2012 2011 2012 2011
$m $m Business Performance(a) $m $m
========= ========= ==== ================================= ======= ========= ====
Total operating profit including
share of pre-tax
operating results from joint
2 273 1 943 +17% ventures and associates 6 622 6 060 +9%
1 189 1 021 +16% Earnings for the period 3 529 2 960(b) +19%
35.0c 30.1c +16% Earnings per share 103.9c 87.4c +19%
Total results for the period
(including disposals,
re-measurements and impairments)
========= ========= ==== ================================= ======= ========= ====
Operating profit before
share of results from joint
2 308 1 892 +22% ventures and associates 5 044 5 563 -9%
Total operating profit including
share of pre-tax
operating results from joint
2 403 2 013 +19% ventures and associates 5 388 5 930 -9%
Earnings for the period
1 289 1 060 +22% continuing operations 2 539 2 900(b) -12%
Earnings per share continuing
37.9c 31.3c +21% operations 74.8c 85.6c -13%
========= ========= ==== ================================= ======= ========= ====
a) 'Business Performance' excludes disposals, certain re-measurements and impairments as exclusion of these items provides a clear and consistent presentation of the underlying operating performance of the Group's ongoing business. For further information see Presentation of Non-GAAP measures (page 11) and notes 1 to 3
(pages 18 to 20). Unless otherwise stated, the results discussed in this release relate to BG Group's Business Performance.
b) Includes a charge in respect of prior period taxation (Business Performance $195 million, Total results $148 million) arising on the revision of deferred tax balances at
1 January 2011 due to changes in UK taxation rates.
BG Group's Chief Executive, Sir Frank Chapman said:
"BG Group produced strong third quarter financial results across the business. We achieved good cost and schedule performance on key projects in Australia and Brazil and reached further asset sales agreements placing us well ahead of our capital release plan.
"Earnings for the third quarter increased 16% to $1.2 billion, driven by a 13% rise in E&P operating profit to $1.3 billion and a continued robust performance of the LNG business, where operating profit was up 24% to $767 million.
"Production rose by some 5% 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% is now forecast.
"Alongside these factors, which will continue to affect production in 2013, we have adjusted our 2013 plans to accommodate an extended sub-sea tie-in schedule for Brazil's Sapinhoá and Lula NE wells. We have also reflected lower production in Egypt where the Phase 7 compression project has been less effective than expected in arresting reservoir decline. In aggregate, these factors are expected to result in 2013 volumes being broadly in line with 2012.
"Looking ahead, our growth projects continue with the planned installation in Brazil of the two new FPSOs in 2013.
This will be followed in 2014 by the installation of two further FPSOs in Brazil and the start-up of QCLNG in Australia. We also progressed the six further FPSOs planned to come onstream in Brazil in 2015 and 2016. The BM-S-9 partners intend to tender for a further FPSO for Carioca, which will bring to 15 the total number of FPSOs to be deployed on the 'big-five' Santos Basin discoveries."
Sir Frank commented: "Critical to our investment proposition is the delivery of our Australia and Brazil ventures. These projects will deliver unit earnings substantially higher than the current Group average, which alongside the growing contribution from the expanding LNG business, will result in Group earnings growing considerably faster than upstream production.
"In Australia, we continued to make good progress with our Queensland Curtis LNG project, keeping it on track for first LNG in 2014. We now have contracts and other agreements in place for more than 90% of the project scope to 2014, and we reconfirm the $20.4 billion capital budget. In the upstream, 135 wells were drilled in the quarter, a 71% increase on the second quarter. Construction of the pipeline infrastructure continues, with the gas collection header system and more than 50% of the gas export pipeline now welded. On Curtis Island, the construction of the LNG plant continues on track, with the first pre-fabricated modules from Thailand being installed."
Sir Frank added: "In Brazil, drilling momentum continues with up to 11 drilling rigs operating simultaneously. Drilling costs, which account for some 50% of project capex, have continued to fall as average drilling durations this year have fallen to 75 days, with the best well taking just 43 days. The prospect of continued drilling cost reductions in the future is highlighted by the best composite well duration of just 34 days.
"Additionally, contracts are in place for 90% of the next four leased and eight locally purchased FPSOs and costs are tracking on or under budget. Falling drilling durations and the confirmation of costs for FPSOs and other capital scope reconfirms the developments' very low unit costs*. The conversion of the two FPSOs scheduled for 2013 start-up continued on track. These units will more than triple gross production capacity from around 130 000 boed to
430 000 boed. Production will ramp up as wells are connected, until plateau is reached in 2014 and 2015.
"In the quarter, we received independent certification from Miller and Lents of the reserves and resources within our 'big-five' Santos Basin discoveries. This confirmed our view of both the mean reserves and resources of 6 billion boe and the upside case of 8 billion boe respectively, net to BG Group*."
On the portfolio rationalisation programme, Sir Frank said: "Our agreement today to sell an interest in part of the QCLNG project to CNOOC means that we have now completed or reached asset sales agreements that should release a total of $7.6 billion of capital by mid-2013, with a material benefit to the Group's balance sheet."
On the Group's exploration programme, he noted: "The Papa-1 discovery in Block 3 produced our sixth consecutive exploration success offshore Tanzania. We currently estimate gross recoverable resources discovered to date to be near 10 tcf with extensive further potential to be explored.
"Elsewhere, exploration of other high potential prospects continued in Australia, Brazil and Egypt. In Kenya, seismic activity identified significant prospectivity in multiple gas and oil prone plays and future opportunities were added to our portfolio offshore Uruguay and India."
In conclusion, Sir Frank said: "During the quarter, BG Group produced good financial results, advanced the execution of our key growth projects within our capital cost estimates and reached agreements that will release substantially more capital earlier than planned. We also delivered exploration success while securing new exploration potential for the future."
*BG Group view, not the operator or relevant consortium
Business Review - Group
Third Quarter Nine Months
================= =======================
2012 2011 2012 2011
$m $m Business Performance $m $m
====== ===== ===== ================================ ======= ========== ====
Revenue and other operating
5 588 5 397 +4% income 16 958 15 315 +11%
1 331 1 183 +13% Exploration and Production 4 041 3 861 +5%
767 620 +24% Liquefied Natural Gas 2 173 1 743 +25%
198 130 +52% Transmission and Distribution 425 442 -4%
(23) 10 - Other activities (17) 14 -
====== ===== ======= ==========
Total operating profit including
share of pre-tax results
from joint ventures and
2 273 1 943 +17% associates 6 622 6 060 +9%
(57) (50) +14% Net finance costs (136) (188) -28%
(986) (851) +16% Taxation for the period (2 886) (2 837)(a) +2%
1 189 1 021 +16% Earnings for the period 3 529 2 960 +19%
35.0c 30.1c +16% Earnings per share (cents) 103.9c 87.4c +19%
2 701 2 738 -1% Cash generated by operations 8 467 7 118 +19%
Capital investment on a
2 770 2 869 -3% cash basis(b) 7 660 8 026 -5%
====== ===== ===== ================================ ======= ========== ====
a) Includes a charge of $195 million in respect of prior period taxation arising on the revision of deferred tax balances at 1 January 2011 due to changes in UK taxation rates.
b) For a definition of capital investment on a cash basis see Glossary (page 31). For a reconciliation between capital investment on a cash basis and total capital investment see Supplementary Information (page 28).
Third quarter
Revenue and other operating income increased by 4% to $5 588 million, reflecting the benefit in the E&P segment of higher realised gas prices and a 5% increase in production volumes.
Total operating profit increased by 17% to $2 273 million as a result of the increase in E&P revenue and other operating income and strong results in the LNG segment as a result of continuing favourable market conditions.
Cash generated by operations of $2 701 million decreased by 1% as higher operating profits were offset by adverse working capital movements, primarily resulting from the timing of LNG cargoes.
As of 30 September 2012, the Group's net debt was $10 974 million and the gearing ratio was 25.3%. The average maturity of the Group's gross borrowings remains at around 17 years.
Net finance costs of $57 million included foreign exchange losses of $18 million (2011 net finance costs of $50 million including foreign exchange gains of $1 million).
Capital investment (excluding acquisitions and on a cash basis) of $2 770 million comprised investment in
E&P ($2 057 million), LNG ($622 million) and T&D ($91 million). This investment was focused primarily on the Group's major projects in Australia, Brazil and the UK. Further details on key project developments are provided in the third quarter business highlights section.
Nine months
Revenue and other operating income increased by 11% to $16 958 million, reflecting the benefit in the E&P segment of higher realised gas and liquids prices, a 4% increase in production volumes and favourable changes in the production mix. This was combined with continued strong demand for the Group's LNG cargoes, particularly from Asia.
Total operating profit increased by 9% to $6 622 million, as the increase in revenue and other operating income was partly offset by higher operating costs and depreciation in the E&P segment. Cash generated by operations increased by 19% to $8 467 million, reflecting the combined result of the strong business performance and the reversal of prior period margin calls on the Group's hedged LNG contracts.
The Group's effective tax rate (including BG Group's share of joint venture and associates' tax) for the full year is expected to be 44.5%, slightly lower than the underlying rate of 45% for 2011, excluding the $195 million prior period charge in 2011 which resulted primarily from the increase in UK North Sea taxation.
Net finance costs of $136 million included interest received on tax refunds of $23 million and foreign exchange losses of $9 million (2011 net finance costs of $188 million including foreign exchange losses of $14 million).
Capital investment (excluding acquisitions and on a cash basis) of $7 660 million comprised investment in
E&P ($5 452 million), LNG ($1 955 million) and T&D ($253 million).
2013 production
For 2013, BG Group now expects production to be in line with 2012. This revised outlook for 2013 reflects predominantly production deferrals related to:
-- the shutdown at Elgin/Franklin; -- delay of the Jasmine start-up; -- an extended sub-sea tie-in schedule for the Sapinhoá and Lula NE wells; and -- scaling back drilling in the USA due to low natural gas prices.
In respect of the deferrals, the Elgin/Franklin and Jasmine effects are restricted to 2013 as Elgin/Franklin will be progressively returned to production in 2013 and Jasmine will enter service in the second half of the year.
At Sapinhoá and Lula NE, a semi-rigid riser sub-sea architecture will be deployed for the first time. An extended
tie-in period for each well-head has been allowed for following detailed execution planning.
The decision to scale back the US rig count was driven by capital expenditure rationing considerations in the light of falling US gas prices. BG Group has a short lead time to re-establish rig count, and therefore can increase production, should US gas price levels improve the economic ranking of the US opportunities. Meanwhile, BG Group continues to develop its US LNG export opportunities, which benefit from the effects of low US gas prices.
In addition, the Phase 7 compression project in Egypt has been less effective than expected in arresting reservoir decline. Near-field exploration to mature resources for plateau extension already forms part of our 2012 work programme.
Beyond 2013, the Group's production plans, including Brazil and Australia, are unchanged.
Disposals, re-measurements and impairments
Total results included a post-tax gain of $101 million (2011 $38 million gain) for the third quarter in respect of disposals, re-measurements and impairments, and a post-tax charge of $985 million for the nine months (2011 $62 million charge). The nine months comprised a non-cash, post-tax charge of $1 295 million as a result of the impairment of certain assets associated with the shale gas business in the USA following the weaker outlook for US natural gas prices, and a post-tax credit of $310 million in respect of other disposals, re-measurements and impairments.
For further information see Presentation of Non-GAAP measures (page 11) and notes 1 to 3 (pages 18 to 20).
Third quarter business highlights
Australia
The Queensland Curtis LNG (QCLNG) project continues on track. A further $1.3 billion was invested during the quarter, bringing total capital expenditure for the first nine months of 2012 to $3.7 billion. The Group now has contracts and other agreements in place for more than 90% of the project scope to 2014, reconfirming BG Group's $20.4 billion capital budget.
In the upstream, the pace of drilling ramped up with 135 wells in the quarter and a record 51 wells in August. This brings the total number of wells drilled to more than 1 000. In September, the Group added its eighth rig and expects to be operating 11 drilling rigs by the year end. In addition, compressors at the Argyle field compression station (FCS) are undergoing final commissioning. Pre-construction and site preparation work has commenced on an additional six FCSs and one central gas processing plant.
Construction of the pipeline infrastructure continues to progress. Welding of the 200 kilometre gas collection header system has been completed, and approximately 40% of the pipeline has been lowered in and backfilled in the right of way. The 340 kilometre export pipeline to Curtis Island is more than 50% welded. During the third quarter, the Group reached a key milestone with the receipt of the required environmental and government permits to enable dredging to begin for the Narrows Crossing to Curtis Island.
Good progress on the LNG plant at Curtis Island continued with delivery of the second shipment of pre-fabricated LNG plant modules from Thailand. The steel roof on the first of the two LNG storage tanks is now complete and will soon be lifted in place. Construction on the second LNG storage tank is progressing.
Exploration activity is ongoing, with stimulation and production testing of three of the Bowen Basin tight gas sands wells, each of which has intersected gas-bearing sections. Testing of coal seam gas discoveries in the Bowen Basin is also continuing. The results of both programmes to date have been encouraging.
Brazil
Significant development and exploration and appraisal activities continue in the Santos Basin with up to 11 drilling rigs operating simultaneously. BG Group lifted five cargoes from FPSO 1 on Lula for export this year totalling in excess of
5 million barrels of oil.
The development of the FPSO fleet continues as planned. Construction of FPSO 2, the 150 000 boed Cidade de São Paulo which will be located on the Sapinhoá field, is 95% complete, and the unit is scheduled to leave the shipyard in Brazil to be ready to start production in early 2013.
The topside integration work on FPSO 3, the 150 000 boed Cidade de Paraty, is more than 91% complete. This unit is destined for Lula NE and is due onstream later in 2013. Five producer wells and five injector wells for these two FPSOs have been pre-drilled. Hull conversions continue in China for FPSOs 4 and 5, which are both around 35% complete.
In addition, the BM-S-9 partners intend to tender for an additional FPSO to develop the Carioca area which will bring to
15 the total number of FPSOs to be deployed on the 'big-five' discoveries.
During the third quarter, BG Group received updated independent expert certification of the resource estimates on the Lula, Cernambi, Sapinhoá, Iara and Carioca discoveries from the oil and gas consulting firm Miller and Lents, Ltd. (MLL). This certification confirmed BG Group's current estimate of the reserves and resources range of 4 billion barrels of oil equivalent (boe) to 8 billion boe, with a mean of 6 billion boe*. MLL was given full access to BG Group's data and development models for these fields in order to undertake its probabilistic analysis**.
India
In September, BG Group signed a production sharing contract (PSC) with the Government of India for the deep-water block MB-DWN-2010/1, offered under the NELP IX bidding round. BG India (50% interest) is the operator for this block. This block represents BG Group's first deep-water operated exploration licence on the west coast of India.
Tanzania
In August, BG Group achieved its sixth consecutive Tanzanian gas discovery with the Papa-1 exploration well located in Block 3, offshore southern Tanzania. Papa-1 is BG Group's first discovery in Block 3 and is within the deeper Cretaceous play section. This discovery is located approximately 100 kilometres offshore and 50 kilometres south-east of the earlier Pweza-1 discovery.
The Group currently estimates gross recoverable resources discovered to date to be near 10 tcf with extensive further potential to be explored.
*BG Group view, not the operator or relevant consortium
**Miller and Lents, Ltd. were not asked to differentiate reserves from total discovered resource volumes.
Third quarter business highlights (continued)
Tanzania (continued)
The drillship, Deepsea-Metro 1, has now commenced the third phase of the drilling campaign which is anticipated will consist of at least four wells. The initial focus will be on appraisal of the Jodari area in Block 1 with the first well being the Jodari North appraisal. Additional targets may include new prospects arising from the Group's recent 3D seismic programme in the eastern outboard area of Block 1.
Trinidad and Tobago
In October, BG Group sanctioned the Starfish field development in the East Coast Marine Area (ECMA), which also contains the existing producing fields Dolphin and Dolphin Deep. This project represents the next planned development phase for the ECMA joint venture and is expected onstream in 2014.
Uruguay
In October, final PSCs were signed in relation to Blocks 8, 9 and 13, initially awarded in April 2012, outlining an extensive geophysical work programme. The first phase will be 3D seismic evaluation of the three blocks over a
three-year period.
Portfolio rationalisation and funding plan
BG Group has now completed or reached asset sales agreements that should release approximately $7.6 billion of capital by mid-2013, surpassing the plan announced in February.
These transactions include the Heads of Agreement (HOA) signed today to sell a part of the QCLNG project to CNOOC for $1.93 billion. CNOOC will reimburse BG Group for its proportionate share of capital for the period from
1 January 2012 to the completion of the transaction, which is expected in mid-2013.
In addition, the HOA provides that BG Group will supply CNOOC with 5 mtpa of LNG for 20 years, making BG Group the largest LNG provider to China, the world's fastest growing energy market.
In September, BG Group completed the sale of the initial tranche of 20% equity in the Quintero LNG regasification facility in Chile for $176 million. The second tranche of 20% equity is expected to complete by the end of 2012.
In addition, the Group has completed the transfer of the associated project financing to third parties, realising additional cash inflow of $326 million.
In October, BG Group received final approval from ARSESP required to complete the sale of the Group's entire
60.1% holding in Comgás, originally announced in May, for Brazilian Reais 3.4 billion in cash ($1.7 billion) to
Cosan S.A. Indústria e Comércio. The transaction is expected to complete in November and will also eliminate
$1.0 billion of debt currently presented within liabilities associated with assets held for sale on the Group's balance sheet.
In October, BG Group announced it had reached agreement to sell its 65.12% interest in Gujarat Gas Company Limited (GGCL) in India for approximately Indian Rupees 24.6 billion ($470 million) to GSPC Distribution Networks Limited, a subsidiary of Gujarat State Petroleum Corporation. The agreement, which is subject to regulatory approval,
is expected to complete during the first half of 2013.
In light of the agreements to sell Comgás and GGCL, BG Group plans to review the structure and constituent parts of its operating business segments, including the presentation of certain businesses in the Transmission & Distribution segment as discontinued operations.
Exploration and Production (E&P)
Third Quarter Nine Months
====================== ====================
2012 2011 2012 2011
$m $m Business Performance $m $m
======== === ======= ==== ============================= ======= === ====== ====
59.4 56.8 +5% Production volumes (mmboe) 181.6 173.9 +4%
Revenue and other operating
2 859 2 497 +14% income 8 648 7 794 +11%
Total operating profit before
1 440 1 310 +10% exploration charge 4 465 4 292 +4%
(109) (127) -14% Exploration charge (424) (431) -2%
======== ======= ======= ======
1 331 1 183 +13% Total operating profit 4 041 3 861 +5%
Capital investment on a
2 057 2 014 +2% cash basis 5 452 5 648 -3%
======== === ======= ==== ============================= ======= === ====== ====
Additional operating and financial data is given on page 28.
Third quarter
Revenue and other operating income increased by 14% to $2 859 million, reflecting a 5% increase in production volumes, higher realised gas prices and improved production mix.
The Group's average realised gas price increased by 18% to 47.95 cents per therm. International gas price realisations were 19% higher at 46.32 cents per therm, reflecting higher market prices and changes in the production mix. The average realised gas price in the UK increased by 7% to 41.86 pence per therm as a result of higher market prices.
Total operating profit of $1 331 million was 13% higher as a result of the increase in revenue and other operating income and a lower exploration charge, partially offset by higher operating costs and depreciation.
The exploration charge of $109 million was $18 million lower than the third quarter of 2011 mainly as a result of lower well write-offs. Gross exploration expenditure of $298 million included spend in Australia ($73 million),
Egypt ($64 million), Brazil ($43 million), the UK ($38 million) and Tanzania ($31 million).
Unit operating expenditure increased to $10.75 per barrel of oil equivalent, principally reflecting the impact of higher royalty costs arising from changes in the production mix and higher commodity prices. As a result of changes in the production mix, lower than expected volumes and higher commodity prices, BG Group now expects unit operating costs for the full year to be between $10.10 and $10.30 per barrel of oil equivalent. The unit depreciation charge increased to $9.07 per barrel of oil equivalent due to higher depreciation from new developments and as a result of changes in the production mix.
Capital investment on a cash basis of $2 057 million included investment in Australia ($727 million),
Brazil ($414 million), the UK ($312 million) and Egypt ($159 million).
Nine months
Revenue and other operating income increased by 11% to $8 648 million, reflecting higher realised gas and liquids prices, a 4% increase in production volumes and improved production mix. Total operating profit was 5% higher as a result of the increase in revenue and other operating income, partially offset by higher operating costs and depreciation charges.
The Group's average realised gas price increased by 9% to 44.44 cents per therm, reflecting generally higher market prices and changes in the production mix.
Unit operating expenditure increased to $10.00 per barrel of oil equivalent, principally reflecting the impact of higher royalty costs arising from changes in the production mix and higher commodity prices. The unit depreciation charge increased to $8.93 per barrel of oil equivalent as a combined result of changes in the production mix and the impact of new fields coming onstream.
Capital investment on a cash basis of $5 452 million included investment in Australia ($1 776 million),
Brazil ($1 019 million), the UK ($869 million), Egypt ($450 million) and the USA ($332 million).
Liquefied Natural Gas (LNG)
Third Quarter Nine Months
====================== ====================
2012 2011 2012 2011
$m $m Business Performance $m $m
======== === ======= ==== =========================== ======= === ====== ====
Revenue and other operating
2 048 2 235 -8% income 6 254 5 776 +8%
716 572 +25% Shipping and marketing 2 020 1 567 +29%
87 81 +7% Liquefaction 258 249 +4%
Business development and
(36) (33) +9% other (105) (73) +44%
======== ======= ======= ======
767 620 +24% Total operating profit 2 173 1 743 +25%
Capital investment on a
622 773 -20% cash basis 1 955 2 138 -9%
======== === ======= ==== =========================== ======= === ====== ====
Additional operating and financial data is given on page 28.
Third quarter
LNG total operating profit increased by 24% to $767 million due to a 25% increase in Shipping and marketing operating profit, reflecting continuing favourable market conditions. These results were in line with expected phasing and the Group continues to expect total operating profit to be at the upper end of its $2.6 billion to $2.8 billion guidance for 2012.
BG Group delivered 88% of cargoes (2011 89%) to global markets outside the USA including 31 to Asia, 8 to
South America and 4 to Europe (2011 35 Asia, 12 South America and 2 Europe). Deliveries to Japan increased
from 13 to 20 as LNG imports remained near record high levels.
BG Group's share of operating profit from liquefaction activities increased by 7% to $87 million.
Capital investment on a cash basis of $622 million was primarily associated with the development of the QCLNG project.
Nine months
LNG total operating profit of $2 173 million was 25% higher than last year as a result of favourable market conditions, with continuing strong demand for cargo deliveries, particularly from Japan.
BG Group delivered 90% of cargoes (2011 86%) to global markets outside the USA including 92 to Asia, 34 to South America and 7 to Europe (2011 76 Asia, 35 South America and 21 Europe). Deliveries to Japan increased from
24 to 52, reflecting record demand as all nuclear units were offline by the end of the second quarter, only two of which are back online to date.
BG Group's share of operating profit from liquefaction activities increased by 4% to $258 million.
Capital investment on a cash basis of $1 955 million was primarily associated with the development of the QCLNG project.
Transmission and Distribution (T&D)
Third Quarter Nine Months
====================== ====================
2012 2011 2012 2011
$m $m Business Performance $m $m
======== === ======= ==== ============================= ======= === ====== ====
700 685 +2% Comgás 1 996 1 857 +7%
219 250 -12% Other 761 731 +4%
======== ======= ======= ======
Revenue and other operating
919 935 -2% income 2 757 2 588 +7%
Comgás before gas cost
155 153 +1% recovery 407 404 +1%
4 (72) - Comgás gas cost recovery (110) (137) -20%
======== ======= ======= ======
159 81 +96% Comgás 297 267 +11%
39 49 -20% Other 128 175 -27%
198 130 +52% Total operating profit 425 442 -4%
Capital investment on a
91 82 +11% cash basis 253 240 +5%
======== === ======= ==== ============================= ======= === ====== ====
Additional operating and financial data is given on page 28.
Third quarter
Total operating profit of $198 million was 52% higher, primarily as a result of the timing effect of gas cost recovery at Comgás in Brazil. In the quarter, $4 million was recovered from customers compared with $72 million passed back to customers in 2011. At the end of the quarter, the cost of gas to be recovered from customers in future periods was $178 million.
Excluding the timing effect of gas cost recovery, total operating profit at Comgás was 1% higher.
Other T&D activities' operating profit decreased by $10 million principally as a result of lower volumes at
BG Italia Power and higher gas costs at Gujarat Gas in India.
Nine months
Revenue and other operating income increased by 7% to $2 757 million, principally as a result of higher prices and volumes at Comgás and higher prices at Gujarat Gas.
T&D total operating profit decreased by 4% to $425 million. Total operating profit at Comgás of $297 million was
11% higher as a result of the timing effect of gas cost recovery. In the first nine months of the year, $110 million was passed back to customers compared with $137 million passed back to customers in 2011. Excluding this timing effect, total operating profit at Comgás was 1% higher than in 2011.
The $47 million reduction in Other T&D activities' operating profit included the impact of adverse foreign exchange movements and higher gas costs at Gujarat Gas and BG Italia Power.
Capital investment on a cash basis of $253 million mainly represents the development of the Comgás pipeline network.
Legal Notice
Certain statements included in these results contain forward-looking information concerning BG Group's strategy, operations, financial performance or condition, outlook, growth opportunities or circumstances in the countries, sectors or markets in which BG Group operates. By their nature, forward-looking statements involve uncertainty because they depend on future circumstances, and relate to events, not all of which are within BG Group's control or can be predicted by BG Group. Although BG Group believes that the expectations and opinions reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations and opinions will prove to have been correct. Actual results and market conditions could differ materially from those set out in the forward-looking statements. For a detailed analysis of the factors that may affect our business, financial performance or results of operations, we urge you to look at the 'Principal risks and uncertainties' included in BG Group plc's Annual Report and Accounts 2011. No part of these results constitutes, or shall be taken to constitute, an invitation or inducement to invest in BG Group plc or any other entity, and must not be relied upon in any way in connection with any investment decision. BG Group undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent legally required. ===============================================================
Presentation of Non-GAAP measures
Business Performance 'Business Performance' excludes discontinued operations and disposals, certain re-measurements and impairments (see below) as exclusion of these items provides a clear and consistent presentation of the underlying operating performance of the Group's ongoing business. BG Group uses commodity instruments to manage price exposures associated with its marketing and optimisation activity. This activity enables the Group to take advantage of commodity price movements. It is considered more appropriate to include both unrealised and realised gains and losses arising from the mark-to-market of derivatives associated with this activity in 'Business Performance'. Disposals, certain re-measurements and impairments BG Group's commercial arrangements for marketing gas include the use of long-term gas sales contracts. Whilst the activity surrounding these contracts involves the physical delivery of gas, certain gas sales contracts are classified as derivatives under the rules of IAS 39 and are required to be measured at fair value at the balance sheet date. Unrealised gains and losses on these contracts reflect the comparison between current market gas prices and the actual prices to be realised under the gas sales contract and are disclosed separately as 'disposals, re-measurements and impairments'. BG Group also uses commodity instruments to manage certain price exposures in respect of optimising the timing and location of its physical gas and LNG sales commitments. These instruments are also required to be measured at fair value at the balance sheet date under IAS 39 and where practical have been designated as formal hedges. However, IAS 39 does not always allow the matching of fair values to the economically hedged value of the related commodity, resulting in unrealised movements in fair value being recorded in the income statement. These movements in fair value, together with any unrealised gains and losses associated with discontinued hedge accounting relationships that continue to represent economic hedges, are disclosed separately as 'disposals, re-measurements and impairments'. BG Group also uses financial instruments, including derivatives, to manage foreign exchange and interest rate exposure. These instruments are required to be recognised at fair value or amortised cost on the balance sheet in accordance with IAS 39. Most of these instruments have been designated either as hedges of foreign exchange movements associated with the Group's net investments in foreign operations, or as hedges of interest rate risk. Where these instruments represent economic hedges but cannot be designated as hedges under IAS 39, unrealised movements in fair value, together with foreign exchange movements associated with the underlying borrowings, are recorded in the income statement and disclosed separately as 'disposals, re-measurements and impairments'. Realised gains and losses relating to the instruments referred to above are included in Business Performance. This presentation best reflects the underlying performance of the business since it distinguishes between the temporary timing differences associated with re-measurements under IAS 39 rules and actual realised gains and losses. BG Group has also separately identified profits and losses associated with the disposal of non-current assets, impairments of non-current assets and certain other exceptional items, as they require separate disclosure in order to provide a clearer understanding of the results for the period. For a reconciliation between the overall results and Business Performance and details of disposals, re-measurements and impairments, see the consolidated income statement (page 12), note 2 (page 19) and note 3 (page 20). Joint ventures and associates Under IFRS, the results from jointly controlled entities (joint ventures) and associates, accounted for under the equity method, are required to be presented net of finance costs and tax on the face of the income statement. Given the relevance of these businesses within BG Group, the results of joint ventures and associates are presented before interest and tax, and after tax. This approach provides additional information on the source of BG Group's operating profits. For a reconciliation between operating profit and earnings including and excluding the results of joint ventures and associates, see note 3 (page 20). Net borrowings BG Group provides a reconciliation of net borrowings and an analysis of the amounts included within net borrowings as this is an important liquidity measure for the Group. ==============================================================
Consolidated Income Statement
Third Quarter
2012 2011
====================================== ======================================
Disposals, Disposals,
re-measure- re-measure-
Business ments Business ments
Perform- and impairments Total Perform- and impairments Total
(Note (Note
ance(a) 2)(a) Result ance(a) 2)(a) Result
Notes $m $m $m $m $m $m
=================== ===== ========= ================= ======== ========= ================= ========
Group revenue 5 581 - 5 581 5 394 - 5 394
Other operating income 2 7 (2) 5 3 71 74
======================= ===== ========= ================= ======== ========= ================= ========
Group revenue and other
operating income 3 5 588 (2) 5 586 5 397 71 5 468
(3 (3 (3 (3
Operating costs 410) - 410) 575) - 575)
Profits and losses on
disposal of
non-current
assets and impairments 2 - 132 132 - (1) (1)
======================= ===== ========= ================= ======== ========= ================= ========
Operating 1
profit/(loss)(b) 3 2 178 130 2 308 1 822 70 892
======================= ===== ========= ================= ======== ========= ================= ========
2,
Finance income 4 30 15 45 23 (51) (28)
2,
Finance costs 4 (83) (10) (93) (57) 40 (17)
Share of post-tax
results
from joint ventures
and associates 3 63 - 63 73 - 73
======================= ===== ========= ================= ======== ========= ================= ========
Profit/(loss) before
tax 2 188 135 2 323 1 861 59 1 920
2,
Taxation 5 (958) (34) (992) (819) (21) (840)
======================= ===== ========= ================= ======== ========= ================= ========
Profit/(loss) for the
period from continuing
operations 3 1 230 101 1 331 1 042 38 1 080
======================= ===== ========= ================= ======== ========= ================= ========
Profit/(loss) for the
period from
discontinued
operations 6 - - - - (2) (2)
======================= ===== ========= ================= ======== ========= ================= ========
Profit/(loss) for the
period 1 230 101 1 331 1 042 36 1 078
======================= ===== ========= ================= ======== ========= ================= ========
Attributable to:
BG Group shareholders
(earnings) 1 189 100 1 289(c) 1 021 37 1 058(c)
Non-controlling
interest 41 1 42 21 (1) 20
======================= ===== ========= ================= ======== ========= ================= ========
1 230 101 1 331 1 042 36 1 078
======================= ===== ========= ================= ======== ========= ================= ========
Earnings per share
continuing
operations - basic 7 35.0c 2.9c 37.9c 30.1c 1.2c 31.3c
Earnings per share
discontinued
operations - basic - - - - (0.1c) (0.1c)
Earnings per share
continuing
operations - diluted 7 34.8c 2.9c 37.7c 29.9c 1.2c 31.1c
Earnings per share
discontinued
operations - diluted - - - - (0.1c) (0.1c)
======================= ===== ========= ================= ======== ========= ================= ========
Total operating
profit/(loss)
including share of
pre-tax
operating results from
joint ventures and
associates(d) 3 2 273 130 2 403 1 943 70 2 013
======================= ===== ========= ================= ======== ========= ================= ========
a) See Presentation of Non-GAAP measures (page 11) for an explanation of results excluding disposals, certain re-measurements and impairments and presentation of the results of joint ventures and associates.
b) Operating profit/(loss) is before share of results from joint ventures and associates.
c) Comprises earnings from continuing operations of $1 289 million (2011 $1 060 million) and from discontinued operations of $nil (2011 $(2) million).
d) This measurement is shown by BG Group as it is used as a means of measuring the underlying performance of the business.
The notes on pages 18 to 27 form an integral part of these condensed financial statements.
Consolidated Income Statement
Nine Months
2012 2011
====================================== ======================================
Disposals, Disposals,
re-measure- re-measure-
Business ments Business ments
Perform- and impairments Total Perform- and impairments Total
(Note (Note
ance(a) 2)(a) Result ance(a) 2)(a) Result
Notes $m $m $m $m $m $m
================== ===== ========= ================= ======== ========= ================= ========
16 16 15 15
Group revenue 928 - 928 303 - 303
Other operating income 2 30 148 178 12 (148) (136)
====================== ===== ========= ================= ======== ========= ================= ========
Group revenue and
other 16 17 15 15
operating income 3 958 148 106 315 (148) 167
(10 (10 (9 (9
Operating costs 680) - 680) 622) - 622)
Profits and losses on
disposal of
non-current
assets and (1
impairments 2 - (1 382) 382) - 18 18
====================== ===== ========= ================= ======== ========= ================= ========
Operating
profit/(loss)(b) 3 6 278 (1 234) 5 044 5 693 (130) 5 563
====================== ===== ========= ================= ======== ========= ================= ========
2,
Finance income 4 108 164 272 62 19 81
2,
Finance costs 4 (216) (156) (372) (204) (55) (259)
Share of post-tax
results
from joint ventures
and
associates 3 224 - 224 227 - 227
====================== ===== ========= ================= ======== ========= ================= ========
Profit/(loss) before
tax 6 394 (1 226) 5 168 5 778 (166) 5 612
2, (2 (2 (2 (2
Taxation 5 794) 241 553) 743) 104 639)
====================== ===== ========= ================= ======== ========= ================= ========
Profit/(loss) for the
period from
continuing
operations 3 3 600 (985) 2 615 3 035 (62) 2 973
====================== ===== ========= ================= ======== ========= ================= ========
Profit/(loss) for the
period from
discontinued
operations 6 - 254 254 - (2) (2)
====================== ===== ========= ================= ======== ========= ================= ========
Profit/(loss) for the
period 3 600 (731) 2 869 3 035 (64) 2 971
====================== ===== ========= ================= ======== ========= ================= ========
Attributable to:
BG Group shareholders
(earnings) 3 529 (736) 2 793(c) 2 960 (62) 2 898(c)
Non-controlling
interest 71 5 76 75 (2) 73
====================== ===== ========= ================= ======== ========= ================= ========
3 600 (731) 2 869 3 035 (64) 2 971
====================== ===== ========= ================= ======== ========= ================= ========
Earnings per share
continuing
operations - basic 7 103.9c (29.1c) 74.8c 87.4c (1.8c) 85.6c
Earnings per share
discontinued
operations - basic - 7.5c 7.5c - (0.1c) (0.1c)
Earnings per share
continuing
operations - diluted 7 103.3c (28.9c) 74.4c 86.8c (1.7c) 85.1c
Earnings per share
discontinued
operations - diluted - 7.4c 7.4c - (0.1c) (0.1c)
====================== ===== ========= ================= ======== ========= ================= ========
Total operating
profit/(loss)
including share of
pre-tax
operating results
from
joint ventures and
associates(d) 3 6 622 (1 234) 5 388 6 060 (130) 5 930
====================== ===== ========= ================= ======== ========= ================= ========
a) See Presentation of Non-GAAP measures (page 11) for an explanation of results excluding disposals, certain re-measurements and impairments and presentation of the results of joint ventures and associates.
b) Operating profit/(loss) is before share of results from joint ventures and associates.
c) Comprises earnings from continuing operations of $2 539 million (2011 $2 900 million) and from discontinued operations of $254 million (2011 $(2) million).
d) This measurement is shown by BG Group as it is used as a means of measuring the underlying performance of the business.
The notes on pages 18 to 27 form an integral part of these condensed financial statements.
For information on dividends paid in the period, see note 9 (page 26).
Consolidated Statement of Comprehensive Income
Third Quarter Nine Months
==================== ==================
2012 2011 2012 2011
$m $m $m $m
========= ========= ============================================ ======== ========
1 331 1 078 Profit for the period 2 869 2 971
668 197 Hedge adjustments net of tax(a) 776 (51)
Fair value movements on 'available-for-sale'
23 6 assets net of tax(b) 14 3
37 (943) Currency translation adjustments (548) (674)
========= ========= ============================================ ======== ========
Other comprehensive income, net of
728 (740) tax 242 (722)
Total comprehensive income for the
2 059 338 period 3 111 2 249
========= ========= ============================================ ======== ========
Attributable to:
2 017 352 BG Group shareholders 3 054 2 201
42 (14) Non-controlling interest 57 48
========= ========= ============================================ ======== ========
2 059 338 3 111 2 249
========= ========= ============================================ ======== ========
a) Income tax relating to hedge adjustments is a $208 million charge for the quarter (2011 $72 million charge) and a $258 million charge for the nine months
(2011 $5 million credit).
b) Income tax relating to fair value movements on 'available-for-sale' assets is a $2 million credit for the quarter (2011 $3 million charge) and a $6 million credit for the nine months (2011 $1 million charge).
The notes on pages 18 to 27 form an integral part of these condensed financial statements.
Consolidated Balance Sheet
As at As at As at
30 31 30
Sept Dec Sept
2012 2011 2011
$m $m $m
=============================================================== === ======= ======= =======
Assets
Non-current assets
Goodwill 27 752 765
Other intangible assets 4 766 6 159 7 267
Property, plant and equipment 41 607 37 316 32 940
Investments 2 478 3 044 2 969
Deferred tax assets 929 589 481
Trade and other receivables 944 695 722
Commodity contracts and other derivative financial instruments 525 366 487
==================================================================== ======= ======= =======
51 276 48 921 45 631
Current assets
Inventories 733 768 727
Trade and other receivables 6 483 7 375 7 377
Current tax receivable 140 141 284
Commodity contracts and other derivative financial instruments 231 331 377
Cash and cash equivalents 4 598 3 601 1 627
==================================================================== ======= ======= =======
12 185 12 216 10 392
Assets classified as held for sale(a) 2 953 245 192
==================================================================== ======= ======= =======
Total assets 66 414 61 382 56 215
==================================================================== ======= ======= =======
Liabilities
Current liabilities
Borrowings (1 616) (1 160) (3 976)
Trade and other payables (5 324) (5 342) (5 388)
Current tax liabilities (1 475) (1 238) (1 716)
Commodity contracts and other derivative financial instruments (692) (1 345) (1 517)
==================================================================== ======= ======= =======
(12
(9 107) (9 085) 597)
Non-current liabilities
(14 (13
Borrowings 357) 977) (8 838)
Trade and other payables (180) (72) (77)
Commodity contracts and other derivative financial instruments (497) (696) (722)
Deferred income tax liabilities (4 637) (3 961) (3 656)
Retirement benefit obligations (99) (214) (217)
Provisions for other liabilities and charges (3 803) (3 603) (1 855)
==================================================================== ======= ======= =======
(23 (22 (15
573) 523) 365)
Liabilities associated with assets classified as held
for sale(a) (1 729) (99) (102)
==================================================================== ======= ======= =======
(34 (31 (28
Total liabilities 409) 707) 064)
==================================================================== ======= ======= =======
Net assets 32 005 29 675 28 151
==================================================================== ======= ======= =======
Equity
Total shareholders' equity 31 671 29 384 27 844
Non-controlling interest in equity 334 291 307
==================================================================== ======= ======= =======
Total equity 32 005 29 675 28 151
==================================================================== ======= ======= =======
a) As at 30 September 2012 assets classified as held for sale include Comgás in Brazil and GNL Quintero S.A. in Chile (2011 includes First Gas in the Philippines).
The notes on pages 18 to 27 form an integral part of these condensed financial statements.
Consolidated Statement of Changes in Equity
Called Share
up share premium Hedging Translation Other Retained Non-con-trolling
capital account reserve reserve reserves earnings Total interest Total
$m $m $m $m $m $m $m $m $m
==================== ========= ======== ======== =========== ========= ========= ===== ================ =====
Equity as at 31 23 29 29
December 2011 577 584 (642) 2 508 2 710 647 384 291 675
Total comprehensive
income for the
period - - 397 (150) - 2 807 3 054 57 3 111
Issue of shares 1 28 - - - - 29 - 29
Purchase of own
shares - - - - - (16) (16) - (16)
Adjustment in
respect of employee
share schemes - - - - - 67 67 - 67
Dividends on
ordinary
shares - - - - - (847) (847) - (847)
Dividends to
non-controlling
interest - - - - - - - (14) (14)
==================== ========= ======== ======== =========== ========= ========= ===== ================ =====
Equity as at 30 25 31 32
September 2012 578 612 (245) 2 358 2 710 658 671 334 005
==================== ========= ======== ======== =========== ========= ========= ===== ================ =====
Called Share
up share premium Hedging Translation Other Retained Non-con-trolling
capital account reserve reserve reserves earnings Total interest Total
$m $m $m $m $m $m $m $m $m
==================== ========= ======== ======== =========== ========= ========= ===== ================ =====
Equity as at 31 20 26 26
December 2010 576 537 (457) 2 877 2 710 085 328 356 684
Total comprehensive
income for the
period - - (48) (652) - 2 901 2 201 48 2 249
Issue of shares 1 33 - - - - 34 - 34
Purchase of own
shares - - - - - (25) (25) - (25)
Adjustment in
respect of employee
share schemes - - - - - 66 66 - 66
Dividends on
ordinary
shares - - - - - (760) (760) - (760)
Dividends to
non-controlling
interest - - - - - - - (97) (97)
==================== ========= ======== ======== =========== ========= ========= ===== ================ =====
Equity as at 30 22 27 28
September 2011 577 570 (505) 2 225 2 710 267 844 307 151
==================== ========= ======== ======== =========== ========= ========= ===== ================ =====
The notes on pages 18 to 27 form an integral part of these condensed financial statements.
Consolidated Cash Flow Statement
Third Quarter Nine Months
==================== ==================
2012 2011 2012 2011
$m $m $m $m
========= ========= ========================================== ======== ========
Cash flows from operating activities
2 323 1 918 Profit before tax(a) 5 423 5 611
Share of post-tax results from joint
(63) (73) ventures and associates (224) (227)
Depreciation of property, plant and
equipment and amortisation
630 573 of intangible assets 1 944 1 706
Fair value movements in commodity
- (53) based contracts (176) 200
Profits and losses on disposal of
(132) 1 non-current assets and impairments(b) 1 127 (18)
Unsuccessful exploration expenditure
4 61 written off 207 184
(88) (52) Decrease in provisions (198) (118)
(45) 28 Finance income (272) (82)
93 17 Finance costs 372 259
20 18 Share-based payments 60 58
(41) 300 (Increase)/decrease in working capital 204 (455)
========= ========= ========================================== ======== ========
2 701 2 738 Cash generated by operations 8 467 7 118
(789) (843) Income taxes paid (2 111) (2 210)
========= ========= ========================================== ======== ========
1 912 1 895 Net cash inflow from operating activities 6 356 4 908
========= ========= ========================================== ======== ========
Cash flows from investing activities
Dividends received from joint ventures
63 13 and associates 115 108
Proceeds from disposal of property,
plant and equipment, intangible assets
176 1 and investments 1 265 196
Purchase of property, plant and equipment
(2 638) (2 770) and intangible assets (7 372) (7 726)
(3) (41) Loans to joint ventures and associates (14) (129)
Repayments from joint ventures and
308 25 associates 662 75
Investments in subsidiaries, joint
(129) (58) ventures and associates (274) (171)
18 - Other loan (advances)/repayments (307) -
========= ========= ========================================== ======== ========
(2 205) (2 830) Net cash outflow from investing activities (5 925) (7 647)
========= ========= ========================================== ======== ========
Cash flows from financing activities
(58) (50) Net interest paid(c) (287) (178)
(408) (362) Dividends paid (856) (768)
Dividends paid to non-controlling
(5) (56) interest (18) (93)
Net proceeds from issue and repayment
28 860 of borrowings 1 815 2 912
10 7 Issue of shares 29 34
- - Purchase of own shares (16) (25)
========= ========= ========================================== ======== ========
Net cash inflow/(outflow) from financing
(433) 399 activities 667 1 882
========= ========= ========================================== ======== ========
Net increase/(decrease) in cash and
(726) (536) cash equivalents(d) 1 098 (857)
Cash and cash equivalents at beginning
5 380 2 204 of period(e) 3 601 2 551
13 (41) Effect of foreign exchange rate changes (32) (67)
========= ========= ========================================== ======== ========
Cash and cash equivalents at end
4 667 1 627 of period(e) 4 667 1 627
========= ========= ========================================== ======== ========
a) Includes profit/(loss) before tax from discontinued operations for the quarter of $nil (2011 $(2) million) and for the nine months of $255 million
(2011 $(1) million).
b) Includes profit on disposal of discontinued operations for the quarter of $nil (2011 $nil) and for the nine months of $255 million (2011 $nil).
c) Includes capitalised interest for the quarter of $131 million (2011 $51 million) and for the nine months of $336 million (2011 $118 million).
d) Cash and cash equivalents comprise cash and short-term liquid investments that are readily convertible to cash.
e) The balance at 30 September 2012 includes cash and cash equivalents of $4 598 million (31 December 2011 $3 601 million; 30 September 2011 $1 627 million) and cash included within assets held for sale of $69 million (31 December 2011 $nil; 30 September 2011 $nil).
The notes on pages 18 to 27 form an integral part of these condensed financial statements.
Notes
1. Basis of preparation
These primary statements are the condensed financial statements ('the financial statements') of BG Group plc for the quarter ended and the nine months ended 30 September 2012. The financial statements do not comprise statutory accounts within the meaning of Section 434 of the Companies Act 2006, and should be read in conjunction with the Annual Report and Accounts for the year ended 31 December 2011 which have been prepared in accordance with IFRS as adopted by the EU, as they provide an update of previously reported information. The latest statutory accounts delivered to the registrar were for the year ended 31 December 2011 which were audited by BG Group's statutory auditors PricewaterhouseCoopers LLP and on which the Auditors' Report was unqualified and did not contain statements under Sections 498(2) or 498(3) of the Companies Act 2006. These financial statements have been prepared in accordance with IAS 34 'Interim Financial Reporting' as adopted by the EU and the accounting policies, methods of computation and presentation as set out in the 2011 Annual Report and Accounts.
The preparation of the financial statements requires management to make estimates and assumptions that affect the reported amount of revenues, expenses, assets and liabilities at the date of the financial statements. If in the future such estimates and assumptions, which are based on management's best judgement at the date of the financial statements, deviate from the actual circumstances, the original estimates and assumptions will be modified as appropriate in the year in which the circumstances change.
Presentation of results
The presentation of BG Group's results separately identifies the effect of:
-- The re-measurement of certain financial instruments; and
-- Profits and losses on the disposal and impairment of non-current assets and businesses and certain other exceptional items.
These items, which are detailed in note 2 to the financial statements (page 19) are excluded from Business Performance in order to provide readers with a clear and consistent presentation of the underlying operating performance of the Group's ongoing businesses.
New accounting standards and interpretations
A number of amendments to accounting standards issued by the IASB are applicable from 1 January 2012. They have not had a material impact on the Group's financial statements for the quarter ended and nine months ended
30 September 2012.
2. Disposals, re-measurements and impairments
Third Quarter Nine Months
=============== ==============
2012 2011 2012 2011
$m $m $m $m
======= ====== ============================================ ======= =====
Revenue and other operating income
- re-measurements of commodity based
(2) 71 contracts 148 (148)
Profits and losses on disposal of
132 (1) non-current assets and impairments (1 382) 18
Net finance (costs)/income - re-measurements
5 (11) of financial instruments 8 (36)
(34) (21) Taxation 241 104
======= ====== ============================================ ======= =====
101 38 (985) (62)
(1) 1 Non-controlling interest (5) 2
======= ====== ============================================ ======= =====
100 39 Impact on earnings - continuing operations (990) (60)
======= ====== ============================================ ======= =====
Third quarter and nine months: Revenue and other operating income
Re-measurements included within revenue and other operating income amount to a charge of $2 million for the quarter (2011 $71 million credit), of which a credit of $2 million (2011 $4 million credit) represents non-cash mark-to-market movements on certain long-term gas contracts. For the nine months, a credit of $148 million in respect of
re-measurements is included within revenue and other operating income (2011 $148 million charge), of which a credit
of $74 million represents non-cash mark-to-market movements on certain long-term gas contracts (2011 $1 million credit). Whilst the activity surrounding these contracts involves the physical delivery of gas, the contracts fall within the scope of IAS 39 and meet the definition of a derivative instrument. In addition, re-measurements include a $4 million charge for the quarter (2011 $67 million credit) and a $74 million credit for the nine months (2011 $149 million charge) representing unrealised mark-to-market movements associated with economic hedges.
Third quarter and nine months: Disposals and impairments of non-current assets
In September, BG Group completed the sale of the initial tranche of 20% equity in the Quintero LNG regasification facility in Chile. This resulted in a pre-tax profit on disposal of $146 million (post-tax $110 million).
The second quarter included a pre-tax charge of $1 800 million (post-tax $1 295 million charge) in respect of the impairment of certain assets associated with the shale gas business in the USA, as a result of the weaker outlook for US natural gas prices.
In June 2012, the Group disposed of 10% of its interest in the Karachaganak gas-condensate project for $651 million in cash, additional capacity in the Caspian Pipeline Consortium pipeline, and the final settlement of cost recovery and other claims. This resulted in the recognition of a pre-tax profit on disposal in the quarter of $9 million (post-tax
$9 million) and in the nine months of $400 million (post-tax $164 million).
Other disposals, impairments and other items in 2012 resulted in a pre-tax charge to the income statement of
$23 million in the third quarter (post-tax $23 million charge) and a pre-tax charge of $128 million in the nine months (post-tax $68 million charge).
In April 2011, BG Group signed and completed a Sale and Purchase Agreement (SPA) with its partners in Genting Sanyen Power in Malaysia for them to acquire the Group's 20% interest in the power plant. This resulted in a pre and post-tax profit of $28 million in the second quarter of 2011. Other disposals and write-offs resulted in a pre and post-tax charge of $1 million in the third quarter of 2011 and a pre-tax charge of $10 million in the nine months (post-tax
$3 million credit).
Third quarter and nine months: Net finance costs
Re-measurements presented in net finance costs include foreign exchange movements on certain borrowings, partly offset by certain derivatives used to hedge foreign exchange and interest rate risk.
Third quarter and nine months: Taxation
In 2011, taxation for the nine months includes a $47 million credit which primarily relates to the impact of the increase in UK North Sea taxation on re-measurement balances.
3. Segmental analysis
Profit for the period
==========
Analysed by operating segment Disposals,
Business re-measurements
Performance and impairments Total Result
======================== ======================= ===================
2012 2011 2012 2011 2012 2011
Third Quarter $m $m $m $m $m $m
================================== ================= ===== =========== ========== ========== =======
Group revenue
Exploration and Production 2 856 2 501 - - 2 856 2 501
Liquefied Natural Gas 2 050 2 228 - - 2 050 2 228
Transmission and Distribution 913 935 - - 913 935
Less: intra-group sales (238) (270) - - (238) (270)
================================== ================= ===== =========== ========== ========== =======
Group revenue 5 581 5 394 - - 5 581 5 394
Other operating income(a) 7 3 (2) 71 5 74
================================== ================= ===== =========== ========== ========== =======
Group revenue and other operating
income 5 588 5 397 (2) 71 5 586 5 468
================================== ================= ===== =========== ========== ========== =======
Operating profit/(loss) before
share of results from joint
ventures and associates
Exploration and Production 1 329 1 172 (54) 25 1 275 1 197
Liquefied Natural Gas 693 527 190 46 883 573
Transmission and Distribution 179 113 (5) (1) 174 112
Other activities (23) 10 (1) - (24) 10
================================== ================= ===== =========== ========== ========== =======
2 178 1 822 130 70 2 308 1 892
================================== ================= ===== =========== ========== ========== =======
Share of pre-tax operating
results from joint ventures
and associates
Exploration and Production 2 11 - - 2 11
Liquefied Natural Gas 74 93 - - 74 93
Transmission and Distribution 19 17 - - 19 17
95 121 - - 95 121
================================== ================= ===== =========== ========== ========== =======
Total operating profit/(loss)
Exploration and Production 1 331 1 183 (54) 25 1 277 1 208
Liquefied Natural Gas 767 620 190 46 957 666
Transmission and Distribution 198 130 (5) (1) 193 129
Other activities (23) 10 (1) - (24) 10
================================== ================= ===== =========== ========== ========== =======
2 273 1 943 130 70 2 403 2 013
================================== ================= ===== =========== ========== ========== =======
Net finance (costs)/income
Finance income 30 23 15 (51) 45 (28)
Finance costs (83) (57) (10) 40 (93) (17)
Share of joint ventures and
associates (4) (16) - - (4) (16)
================================== ================= ===== =========== ========== ========== =======
(57) (50) 5 (11) (52) (61)
================================== ================= ===== =========== ========== ========== =======
Taxation
Taxation (958) (819) (34) (21) (992) (840)
Share of joint ventures and
associates (28) (32) - - (28) (32)
================================== ================= ===== =========== ========== ========== =======
(986) (851) (34) (21) (1 020) (872)
================================== ================= ===== =========== ========== ========== =======
Profit/(loss) for the period
from continuing operations 1 230 1 042 101 38 1 331 1 080
================================== ================= ===== =========== ========== ========== =======
Attributable to:
BG Group shareholders (earnings) 1 189 1 021 100 39 1 289 1 060
Non-controlling interest 41 21 1 (1) 42 20
================================== ================= ===== =========== ========== ========== =======
1 230 1 042 101 38 1 331 1 080
================================== ================= ===== =========== ========== ========== =======
a) Business Performance Other operating income is attributable to segments as follows: E&P $3 million (2011 $(4) million), LNG $(2) million (2011 $7 million) and
T&D $6 million (2011 $nil).
3. Segmental analysis continued
Disposals,
Business re-measurements
Performance and impairments Total Result
========================== ======================= ===================
2012 2011 2012 2011 2012 2011
Nine Months $m $m $m $m $m $m
================================== ================= ======= ============= ======== ========= ========
Group revenue(a)
Exploration and Production 8 637 7 804 - - 8 637 7 804
Liquefied Natural Gas 6 251 5 754 - - 6 251 5 754
Transmission and Distribution 2 741 2 588 - - 2 741 2 588
Less: intra-group sales (701) (843) - - (701) (843)
================================== ================= ======= ============= ======== ========= ========
Group revenue 16 928 15 303 - - 16 928 15 303
Other operating income(b) 30 12 148 (148) 178 (136)
================================== ================= ======= ============= ======== ========= ========
Group revenue and other operating
income 16 958 15 315 148 (148) 17 106 15 167
================================== ================= ======= ============= ======== ========= ========
Operating profit/(loss) before
share of results from joint
ventures and associates
Exploration and Production 4 024 3 836 (1 483) 23 2 541 3 859
Liquefied Natural Gas 1 894 1 453 259 (180) 2 153 1 273
Transmission and Distribution 377 390 (9) 27 368 417
Other activities (17) 14 (1) - (18) 14
================================== ================= ======= ============= ======== ========= ========
6 278 5 693 (1 234) (130) 5 044 5 563
================================== ================= ======= ============= ======== ========= ========
Share of pre-tax operating
results from joint ventures
and associates
Exploration and Production 17 25 - - 17 25
Liquefied Natural Gas 279 290 - - 279 290
Transmission and Distribution 48 52 - - 48 52
344 367 - - 344 367
================================== ================= ======= ============= ======== ========= ========
Total operating profit/(loss)
Exploration and Production 4 041 3 861 (1 483) 23 2 558 3 884
Liquefied Natural Gas 2 173 1 743 259 (180) 2 432 1 563
Transmission and Distribution 425 442 (9) 27 416 469
Other activities (17) 14 (1) - (18) 14
================================== ================= ======= ============= ======== ========= ========
6 622 6 060 (1 234) (130) 5 388 5 930
================================== ================= ======= ============= ======== ========= ========
Net finance (costs)/income
Finance income 108 62 164 19 272 81
Finance costs (216) (204) (156) (55) (372) (259)
Share of joint ventures and
associates (28) (46) - - (28) (46)
================================== ================= ======= ============= ======== ========= ========
(136) (188) 8 (36) (128) (224)
================================== ================= ======= ============= ======== ========= ========
Taxation
Taxation (2 794) (2 743) 241 104 (2 553) (2 639)
Share of joint ventures and
associates (92) (94) - - (92) (94)
================================== ================= ======= ============= ======== ========= ========
(2 886) (2 837) 241 104 (2 645) (2 733)
================================== ================= ======= ============= ======== ========= ========
Profit/(loss) for the period
from continuing operations 3 600 3 035 (985) (62) 2 615 2 973
================================== ================= ======= ============= ======== ========= ========
Attributable to:
BG Group shareholders (earnings) 3 529 2 960 (990) (60) 2 539 2 900
Non-controlling interest 71 75 5 (2) 76 73
================================== ================= ======= ============= ======== ========= ========
3 600 3 035 (985) (62) 2 615 2 973
================================== ================= ======= ============= ======== ========= ========
a) External sales are attributable to segments as follows: E&P $8 162 million (2011 $6 961 million), LNG $6 025 million (2011 $5 754 million) and T&D $2 741 million
(2011 $2 588 million). Intra-group sales are attributable to segments as follows: E&P $475 million (2011 $843 million) and LNG $226 million (2011 $nil).
b) Business Performance Other operating income is attributable to segments as follows: E&P $11 million (2011 $(10) million), LNG $3 million (2011 $22 million) and
T&D $16 million (2011 $nil).
3. Segmental analysis continued
Disposals,
Business re-measurements
Performance and impairments Total Result
=================== ======================= ===================
2012 2011 2012 2011 2012 2011
Third Quarter $m $m $m $m $m $m
================================== ========= ======== =========== ========== ========= ========
Total operating profit/(loss)
Exploration and Production 1 331 1 183 (54) 25 1 277 1 208
Liquefied Natural Gas 767 620 190 46 957 666
Transmission and Distribution 198 130 (5) (1) 193 129
2 296 1 933 131 70 2 427 2 003
================================== ========= ======== =========== ========== ========= ========
Other activities (23) 10 (1) - (24) 10
================================== ========= ======== =========== ========== ========= ========
2 273 1 943 130 70 2 403 2 013
================================== ========= ======== =========== ========== ========= ========
Less: Pre-tax share of operating
results
of joint ventures and associates (95) (121)
Add: Share of post-tax results
from
joint ventures and associates 63 73
Net finance costs (48) (45)
================================== ========= ======== =========== ========== ========= ========
Profit before tax 2 323 1 920
Taxation (992) (840)
================================== ========= ======== =========== ========== ========= ========
Profit for the period from
continuing operations 1 331 1 080
================================== ========= ======== =========== ========== ========= ========
Disposals,
Business re-measurements
Performance and impairments Total Result
=================== ======================= ===================
2012 2011 2012 2011 2012 2011
Nine Months $m $m $m $m $m $m
================================== ========= ======== ============= ======== ========= ========
Total operating profit/(loss)
Exploration and Production 4 041 3 861 (1 483) 23 2 558 3 884
Liquefied Natural Gas 2 173 1 743 259 (180) 2 432 1 563
Transmission and Distribution 425 442 (9) 27 416 469
6 639 6 046 (1 233) (130) 5 406 5 916
================================== ========= ======== ============= ======== ========= ========
Other activities (17) 14 (1) - (18) 14
================================== ========= ======== ============= ======== ========= ========
6 622 6 060 (1 234) (130) 5 388 5 930
================================== ========= ======== ============= ======== ========= ========
Less: Pre-tax share of operating
results
of joint ventures and associates (344) (367)
Add: Share of post-tax results
from
joint ventures and associates 224 227
Net finance costs (100) (178)
================================== ========= ======== ============= ======== ========= ========
Profit before tax 5 168 5 612
Taxation (2 553) (2 639)
================================== ========= ======== ============= ======== ========= ========
Profit for the period from
continuing operations 2 615 2 973
================================== ========= ======== ============= ======== ========= ========
4. Net finance (costs)/income
Third Quarter Nine Months
===================== ==================
2012 2011 2012 2011
$m $m $m $m
=========== ======== ============================================= ======== ========
(163) (71) Interest payable(a) (399) (199)
Interest on obligations under finance
(26) (27) leases (78) (80)
131 51 Interest capitalised 336 118
(25) (10) Unwinding of discount on provisions(b) (75) (43)
(10) 40 Disposals, re-measurements and impairments(c) (156) (55)
=========== ======== ============================================= ======== ========
(93) (17) Finance costs (372) (259)
=========== ======== ============================================= ======== ========
30 23 Interest receivable 108 62
15 (51) Disposals, re-measurements and impairments(c) 164 19
=========== ======== ============================================= ======== ========
45 (28) Finance income 272 81
=========== ======== ============================================= ======== ========
(48) (45) Net finance costs(d) (100) (178)
=========== ======== ============================================= ======== ========
a) In 2012, interest payable includes foreign exchange losses of $18 million for the quarter and foreign exchange losses for the nine months of $9 million. In 2011, interest payable includes foreign exchange gains of $1 million for the quarter and foreign exchange losses for the nine months of $14 million.
b) Relates to the unwinding of the discount on provisions and amounts in respect of pension obligations which represent the unwinding of discount on the plans' liabilities offset by the expected return on the plans' assets.
c) Net finance (costs)/income on disposals, re-measurements and impairments for the quarter of $5 million (2011 $(11) million) and for the nine months of $8 million
(2011 $(36) million) is included in note 2 (page 19) and principally reflects foreign exchange movements on certain borrowings, partly offset by mark-to-market movements on certain derivatives used to hedge foreign exchange and interest rate risk.
d) Excludes Group share of net finance costs from joint ventures and associates for the quarter of $4 million (2011 $16 million) and for the nine months of $28 million
(2011 $46 million).
5. Taxation
The tax charge for the third
quarter was as follows:
========= =========== ==========
Disposals,
Business re-measurements
Performance and impairments Total Result
=================== ======================= ===================
2012 2011 2012 2011 2012 2011
Third Quarter $m $m $m $m $m $m
============================== ========= ======== =========== ========== ========== =======
Tax charge/(credit) for the
period excluding share of
taxation from joint ventures
and associates 958 819 34 21 992 840
Share of taxation from joint
ventures and associates 28 32 - - 28 32
============================== ========= ======== =========== ========== ========== =======
Total including share of
taxation from joint ventures
and associates 986 851 34 21 1 020 872
============================== ========= ======== =========== ========== ========== =======
The tax charge for the nine
months was as follows:
========= =========== =========
Disposals,
Business re-measurements
Performance and impairments Total Result
=================== ======================= ===================
2012 2011 2012 2011 2012 2011
Nine Months $m $m $m $m $m $m
============================== ========= ======== =========== ========== ========= ========
Tax charge/(credit) for the
period 2 794 2 548 (241) (57) 2 553 2 491
Prior period taxation(a) - 195 - (47) - 148
Total excluding share of
taxation from joint ventures
and associates 2 794 2 743 (241) (104) 2 553 2 639
Share of taxation from joint
ventures and associates 92 94 - - 92 94
============================== ========= ======== =========== ========== ========= ========
Total including share of
taxation from joint ventures
and associates 2 886 2 837 (241) (104) 2 645 2 733
============================== ========= ======== =========== ========== ========= ========
a) Prior period taxation relates to the revision of deferred tax balances at 1 January 2011, primarily as a result of the increase in UK North Sea taxation announced in
March 2011.
Business Performance taxation for the nine months, excluding prior period taxation but including share of taxation from joint ventures and associates, was $2 886 million (2011 $2 642 million). The effective tax rate of 44.5% for the nine months is based on the best estimate of the weighted average annual income tax rate expected for the full year.
6. Discontinued operations
The post-tax profit/loss of the businesses comprising discontinued operations for the third quarter, including profits and losses on disposals and impairments, was $nil (2011 $2 million loss) and for the nine months was a $254 million gain (2011 $2 million loss).
In May 2012, the Group disposed of its 40% equity interest in two gas-fired power generation plants in the Philippines to its partner, First Gen Corporation, for net cash proceeds of $360 million. The sale and purchase agreement, completed on signing, covers the 1 000 megawatt Santa Rita power plant and the 500 megawatt San Lorenzo power plant, both on the island of Luzon. This resulted in a pre and post-tax profit of $252 million in the second quarter of 2012.
7. Earnings per ordinary share - continuing operations
Third Quarter Nine Months
============================ ============================
2012 2011 2012 2011
cents cents cents cents
per per per per
$m share $m share $m share $m share
===== ====== ===== ====== =========================== ===== ====== ===== ======
Earnings - continuing
operations excluding
disposals, re-measurements
1 189 35.0 1 021 30.1 and impairments 3 529 103.9 2 960 87.4
Disposals, re-measurements
and impairments
(after tax and
non-controlling
100 2.9 39 1.2 interest) (990) (29.1) (60) (1.8)
===== ====== ===== ====== =========================== ===== ====== ===== ======
Earnings - continuing
1 289 37.9 1 060 31.3 operations 2 539 74.8 2 900 85.6
===== ====== ===== ====== =========================== ===== ====== ===== ======
Basic earnings per share calculations in 2012 are based on the weighted average number of shares in issue of
3 397 million for the quarter and 3 396 million for the nine months.
The earnings figure used to calculate diluted earnings per ordinary share is the same as that used to calculate earnings per ordinary share given above, divided by 3 417 million for the quarter and 3 415 million for the nine months, being the weighted average number of ordinary shares in issue during the period as adjusted for dilutive equity instruments.
8. Reconciliation of net borrowings(a) - Nine Months
$m
=========================================== =======
(11
Net borrowings as at 31 December 2011 336)
=========================================== =======
Net increase in cash and cash equivalents 1 098
Cash inflow from changes in borrowings (1 815)
Inception of finance lease assets 2
Foreign exchange and other re-measurements 104
Net borrowings classified as held for sale 973
(10
Net borrowings as at 30 September 2012 974)
=========================================== =======
Net borrowings attributable to Comgás as at 30 September 2012 were $nil (31 December 2011 $963 million), with
$973 million included in assets and liabilities classified as held for sale.
As at 30 September 2012, BG Group's share of the net borrowings in joint ventures and associates amounted to approximately $1.4 billion, including BG Group shareholder loans of approximately $0.8 billion. These net borrowings are included in BG Group's share of the net assets in joint ventures and associates which are consolidated in
BG Group's accounts.
a) Net borrowings are defined on page 31.
Net borrowings comprise:
As at As at
30 31
Sept Dec
2012 2011
$m $m
Amounts receivable/(due) within one year
Cash and cash equivalents 4 598 3 601
Overdrafts, loans and finance leases (1 616) (1 160)
Derivative financial instruments(a) (41) (45)
============================================= ======= =======
2 941 2 396
Amounts receivable/(due) after more than one
year
(14 (13
Loans and finance leases(b) 162) 784)
Derivative financial instruments(a) 247 52
============================================= ======= =======
(13 (13
915) 732)
============================================= ======= =======
(10 (11
Net borrowings 974) 336)
============================================= ======= =======
a) These items are included within commodity contracts and other derivative financial instrument balances on the balance sheet.
b) Includes finance lease receivable of $195 million (2011 $193 million) included within non-current assets on the balance sheet.
8. Reconciliation of net borrowings - Nine Months continued
Liquidity and Capital Resources
All the information below is as at 30 September 2012
The Group's principal borrowing entities are: BG Energy Holdings Limited (BGEH), including wholly owned subsidiary undertakings, the majority of whose borrowings are guaranteed by BG Energy Holdings Limited (collectively BGEH), and Comgás and Gujarat Gas which conduct their borrowing activities on a stand-alone basis.
BGEH had a $4.0 billion US Commercial Paper Programme, of which $3.82 billion was unutilised, and a $2.0 billion Eurocommercial Paper Programme, which was unutilised. BGEH also had a $15.0 billion Euro Medium Term Note Programme, of which $7.98 billion was unutilised.
BGEH had aggregate committed revolving borrowing facilities of $5.0 billion, of which $2.32 billion expires in 2013, $2.18 billion in 2016 and $0.5 billion in 2017. There are no restrictions on the application of funds under these facilities, which were undrawn.
In addition, BGEH had uncommitted borrowing facilities including multicurrency lines, overdraft facilities of GBP45 million and credit facilities of $20 million, all of which were unutilised.
Comgás had committed borrowing facilities of Brazilian Reais 1 625 million, all of which were utilised.
9. Dividends
Nine Months
============================
2012 2011
cents
per cents
$m share $m per share
================================== === ====== === ==========
Prior year final dividend, paid
in the period 443 12.96 401 11.78
Interim dividend, paid in the
period 404 11.88 359 10.80
================================== === ====== === ==========
Total dividend paid in the period 847 24.84 760 22.58
================================== === ====== === ==========
The final dividend of 12.96 cents per ordinary share ($443 million) in respect of the year ended 31 December 2011 was paid on 25 May 2012 to shareholders on the register at the close of business on 13 April 2012. The interim dividend of 11.88 cents per ordinary share ($404 million) in respect of the year ending 31 December 2012 was paid on
7 September 2012 to shareholders on the register as at 3 August 2012.
10. Quarterly information: earnings and earnings per share
2012 2011 2012 2011
$m $m cents cents
========================================= ===== ===== ======= =======
First quarter
Total Result - continuing operations 1 219 595 35.9 17.5
Total Result - discontinued operations 2 2 0.1 0.1
Business Performance 1 267 819 37.3 24.2
Second quarter
Total Result - continuing operations 31 1 245 0.9 36.8
Total Result - discontinued operations 252 (2) 7.4 (0.1)
Business Performance 1 073 1 120 31.6 33.1
Third quarter
Total Result - continuing operations 1 289 1 060 37.9 31.3
Total Result - discontinued operations - (2) - (0.1)
Business Performance 1 189 1 021 35.0 30.1
Fourth quarter
Total Result - continuing operations 1 336 39.4
Total Result - discontinued operations - -
Business Performance 1 477 43.5
========================================= ===== ===== ======= =======
Full year
Total Result - continuing operations 4 236 125.0
Total Result - discontinued operations (2) (0.1)
Business Performance 4 437 130.9
========================================= ===== ===== ======= =======
11. Commitments and contingencies
Details of the Group's commitments and contingent liabilities as at 31 December 2011 can be found in note 24,
page 127 of the 2011 Annual Report and Accounts.
There have been no material changes to the Group's commitments in respect of capital expenditure, other commitments or contingent liabilities in the nine month period to 30 September 2012.
12. Related party transactions
The Group provides goods and services to, and receives goods and services from, its joint ventures and associates. In addition, the Group provides financing to some of these parties by way of loans. Details of related party transactions for the year ended 31 December 2011 can be found in note 25, page 129 of the 2011 Annual Report and Accounts. There have been no material changes in these relationships in the period ending 30 September 2012. No related party transactions have taken place in the first nine months of the current financial year that have materially affected the financial position or the performance of the Group during that period.
Supplementary information: Operating and financial data
Second
Third Quarter Quarter Nine Months
==================== ======== ==================
2012 2011 2012 2012 2011
========= ========= ======== ================================== ======== ========
Production volumes (mmboe)
7.0 5.4 8.0 Oil 23.1 18.2
8.2 8.2 8.8 Liquids 25.4 25.7
44.2 43.2 44.5 Gas 133.1 130.0
========= ========= ======== ================================== ======== ========
59.4 56.8 61.3 Total 181.6 173.9
========= ========= ======== ================================== ======== ========
Production volumes (boed in
thousands)
76 58 87 Oil 84 67
89 89 97 Liquids 93 94
481 470 489 Gas 486 476
========= ========= ======== ================================== ======== ========
646 617 673 Total 663 637
========= ========= ======== ================================== ======== ========
Average realised oil price
$107.80 $113.71 $109.18 per barrel $111.22 $113.27
Average realised liquids price
$95.57 $96.01 $89.95 per barrel $95.02 $92.51
Average realised UK gas price
65.45c 63.09c 70.92c per produced therm 70.17c 68.40c
(41.86p) (38.96p) (44.61p) (44.45p) (42.42p)
Average realised International
46.32c 39.06c 41.08c gas price per produced therm 41.73c 38.05c
Average realised gas price
47.95c 40.62c 44.25c per produced therm 44.44c 40.95c
$6.01 $5.66 $5.68 Lifting costs per boe $5.97 $5.58
$10.75 $8.96 $9.71 Operating expenditure per boe $10.00 $8.63
$9.07 $7.84 $9.18 Depreciation per boe $8.93 $7.67
Development expenditure (including
1 785 1 785 1 623 acquisitions) ($m) 4 845 4 521
Gross exploration expenditure
($m)
Capitalised expenditure (including
193 193 164 acquisitions) 597 945
105 66 60 Other expenditure 237 247
========= ========= ======== ================================== ======== ========
298 259 224 Total 834 1 192
========= ========= ======== ================================== ======== ========
Gross exploration expenditure
by country ($m)
73 20 33 Australia 146 73
43 47 17 Brazil 134 191
64 3 42 Egypt 118 10
31 47 73 Tanzania 201 170
38 24 40 UK 113 72
49 118 19 Other 122 676
========= ========= ======== ================================== ======== ========
298 259 224 Total 834 1 192
========= ========= ======== ================================== ======== ========
Supplementary information: Operating and financial data continued
Second
Third Quarter Quarter Nine Months
====================== ========= ==================
2012 2011 2012 2012 2011
========== ========== ========= ================================= ======== ========
Exploration expenditure charge
($m)
Capitalised expenditure written
4 61 143 off 187 184
105 66 60 Other expenditure 237 247
===== ===== ===== =================================== ===== =====
109 127 203 Total 424 431
===== ===== ===== =================================== ===== =====
Group capital investment ($m)
1 345 1 308 1 274 Australia 3 713 3 380
495 264 359 Brazil 1 246 866
160 159 118 Egypt 451 412
312 267 259 UK 869 628
90 424 27 USA 343 1 402
368 447 348 Other 1 038 1 338
===== ===== ===== =================================== ===== =====
Capital investment on a cash
2 770 2 869 2 385 basis ($m)(a) 7 660 8 026
===== ===== ===== =================================== ===== =====
Other items:
(10) (20) 336 Movements in accruals/(prepayments) 477 (411)
131 51 106 Capitalised financing costs 336 118
===== ===== ===== =================================== ===== =====
2 891 2 900 2 827 Total capital investment ($m) 8 473 7 733
===== ===== ===== =================================== ===== =====
a) Capital investment on a cash basis includes acquisitions
for the third quarter 2012 of $nil (third quarter 2011
$nil; second quarter 2012 $nil) and for the nine months
of
$nil (2011 $432 million).
E&P capital investment ($m)
727 569 558 Australia 1 776 1 348
414 185 292 Brazil 1 019 633
159 158 118 Egypt 450 403
312 267 259 UK 869 628
90 404 24 USA 332 1 353
355 431 338 Other 1 006 1 283
===== ===== ===== =================================== ===== =====
Capital investment on a cash
2 057 2 014 1 589 basis ($m)(a) 5 452 5 648
===== ===== ===== =================================== ===== =====
86 86 315 Other items 388 196
===== ===== ===== =================================== ===== =====
2 143 2 100 1 904 Total capital investment ($m) 5 840 5 844
===== ===== ===== =================================== ===== =====
a) E&P capital investment on a cash basis includes
acquisitions for the third quarter 2012 of $nil (third
quarter 2011 $nil; second quarter 2012 $nil) and for
the nine months of $nil (2011 $432 million).
LNG capital investment ($m)
618 739 716 Australia 1 937 2 032
4 34 4 Other 18 106
========== ========== ========= ================================= ======== ========
Capital investment on a cash
622 773 720 basis ($m) 1 955 2 138
========== ========== ========= ================================= ======== ========
35 (61) 119 Other items 417 (490)
========== ========== ========= ================================= ======== ========
657 712 839 Total capital investment ($m) 2 372 1 648
========== ========== ========= ================================= ======== ========
Supplementary information: Operating and financial data continued
Second
Third Quarter Quarter Nine Months
==================== ======== ==================
2012 2011 2012 2012 2011
========= ========= ======== =============================== ======== ========
T&D capital investment ($m)
81 76 67 Brazil 227 220
10 6 9 Other 26 20
========= ========= ======== =============================== ======== ========
Capital investment on a cash
91 82 76 basis ($m) 253 240
========= ========= ======== =============================== ======== ========
- 6 8 Other items 8 1
========= ========= ======== =============================== ======== ========
91 88 84 Total capital investment ($m) 261 241
========= ========= ======== =============================== ======== ========
Depreciation and amortisation
by segment ($m)
584 485 600 E&P 1 742 1 443
39 42 40 LNG 118 128
6 46 32 T&D 81 133
1 - 1 Other 3 2
========= ========= ======== =============================== ======== ========
630 573 673 Total 1 944 1 706
========= ========= ======== =============================== ======== ========
LNG cargo deliveries by country
- 3 3 Argentina 5 6
- - 1 Brazil 1 -
8 9 10 Chile 28 29
1 6 2 China 3 9
- - - France - 2
1 - - Greece 1 -
3 2 3 India 7 4
20 13 16 Japan 52 24
- - - Netherlands 1 -
1 - - Portugal 2 -
3 4 3 South Korea 20 23
- - - Spain - 2
4 10 3 Taiwan 10 16
1 - - Turkey 1 -
1 1 - UAE 1 2
1 2 1 UK 2 17
6 6 4 USA 15 22
========= ========= ======== =============================== ======== ========
50 56 46 Total 149 156
========= ========= ======== =============================== ======== ========
LNG managed volumes (thousand
3 036 3 433 2 957 tonnes) 9 196 9 598
========= ========= ======== =============================== ======== ========
Historical supplementary information is available on the BG Group plc website: www.bg-group.com
Glossary
In BG Group's results some or all of the following
definitions are used:
bcf billion cubic feet
bcfd billion cubic feet per day
boe barrels of oil equivalent
boed barrels of oil equivalent per day
bopd barrels of oil per day
CAGR compound annual growth rate
Comprises expenditure on property, plant
and equipment, other intangible assets and
Capital investment investments, including business combinations
Capital investment Comprises cash flows on purchase of property,
on a cash plant and equipment and intangible assets,
basis loans to joint ventures and associates and
investments in subsidiaries, joint ventures
and associates
E&P Exploration and Production
Floating Production Storage and Offloading
FPSO system
net borrowings as a percentage of total
shareholders' funds (excluding the re-measurement
of commodity financial instruments and
Gearing ratio associated deferred tax) plus net borrowings
International Accounting Standard issued
IAS by the IASB
IASB International Accounting Standards Board
International Financial Reporting Interpretations
IFRIC Committee
IFRS International Financial Reporting Standards
kboed thousand barrels of oil equivalent per day
LNG Liquefied Natural Gas
Comprises all LNG volumes contracted for
purchase and having related revenue and
other
Managed operating income recognised in the applicable
volumes period
m million
mmboe million barrels of oil equivalent
mmbtu million british thermal units
mmcfd million cubic feet per day
mmcmd million cubic metres per day
mmscfd million standard cubic feet per day
mmscm million standard cubic metres
mmscmd million standard cubic metres per day
Mtpa million tonnes per annum
Net borrowings Comprise cash, current asset investments,
finance lease liabilities/assets, currency
and interest rate derivative financial instruments
and short and long-term borrowings. Excludes
net borrowings in respect of assets classified
as held for sale
PSC production sharing contract
SEC US Securities and Exchange Commission
T&D Transmission and Distribution
Tbtu trillion british thermal units
tcf trillion cubic feet
Total operating Operating profit plus share of pre-tax operating
profit results of joint ventures and associates
UKCS United Kingdom Continental Shelf
Unit operating Production costs and royalties incurred
expenditure over the period divided by the net production
per boe for the period. This measure does not include
the impact of depreciation and amortisation
costs and exploration costs as they are
not considered to be costs associated with
the operation of producing assets.
'Unit operating expenditure' as defined
Unit lifting above, excluding royalty, tariff and insurance
costs per costs incurred over the period divided by
boe the net production for the period.
================== ===================================================
Enquiries
Enquiries relating to BG Group's
results, business General enquiries about
and financial position should shareholder matters
be made to: should be made to:
Investor Relations Department Equiniti Limited
BG Group plc Aspect House
Thames Valley Park Drive Spencer Road
Reading Lancing
Berkshire West Sussex
RG6 1PT BN99 6DA
Tel: 0118 929 3025 Tel: 0871 384 2064
e-mail: invrel@bg-group.com e-mail: via https://help.shareview.co.uk
Media Enquiries:
Neil Burrows
Tel: 0118 929 2462
High resolution images are available
at www.vismedia.co.uk
BG Group is listed on the US
over-the-counter market known
as the International OTCQX.
Enquiries should be made to:
OTC Markets Group Inc.
304 Hudson Street
2nd Floor
New York, NY 10013
USA
e-mail: info@otcmarkets.com
Financial calendar
Announcement of 2012 fourth
quarter and full year results 5 February 2013
Announcement of 2013 first quarter
results 3 May 2013
BG Group plc website: www.bg-group.com
Registered office
100 Thames Valley Park Drive,
Reading RG6 1PT
Registered in England No. 3690065
====================================== =========================================
This information is provided by RNS
The company news service from the London Stock Exchange
END
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