First Quarter Key Points
· Total operating profit up 21% to $2.4 billion
· Cash generated by operations up 47% to $2.6 billion
· LNG operating profit up 42% to $812 million
· E&P production up 5% to 60.9 mmboe
· New projects onstream in Norway, Thailand, Bolivia and Egypt
· Fourth gas discovery in Tanzania, mean total gross recoverable resources approaching 7 tcf
· Execution of funding plan on track, with disposals and new funding agreements announced
BG Group's Chief Executive, Sir Frank Chapman said:
"BG Group has posted a strong set of first quarter results with total operating profit up 21% to
$2.4 billion, earnings up 55% to $1.3 billion and cash generated by operations up 47% to
$2.6 billion."
"Our exploration and production business delivered a 5% increase in volumes and total operating profit for our LNG business was up 42% to $812 million, boosted by continuing strong demand from Asian markets."
"This year we have brought key new developments into production, continued to make material progress across our major projects, and we announced further exploration success."
Sir Frank added, "four of our 2012 projects were successfully brought onstream and began production build-up."
"In Egypt, phase seven of the West Delta Deep Marine development was brought online; offshore Norway, we achieved first production from the Gaupe field; in Thailand, new facilities at Greater Bongkot South began delivering volumes; and, in Bolivia, the first phase of production from the Margarita field commenced."
"These new sources of production will, at plateau, add around 50 000 barrels of oil equivalent per day net to the Group's production; helping to keep us on track to deliver our 6% to 8% annual average growth rate through to 2020."
On BG Group's major projects Sir Frank said, "we're making rapid progress in Brazil with the development of the 'big five' Santos Basin discoveries. A fourth producing well has been connected to FPSO1 and the construction and conversion programmes for the further 12 FPSOs continue to advance providing tangible progress towards 2.3 mmboe per day of installed capacity by 2017."
"In Australia, we have increased drilling capacity as planned and delivered over 70 wells in the quarter; 31 in the month of March. Significant upstream contract awards for facilities and infrastructure are progressing. At the LNG plant on Curtis Island, dredging continues to progress to schedule; construction of the two LNG storage tanks is ongoing; and the first of 47 modules from Thailand is due for delivery in the second half of 2012. Despite cost pressures, the project remains firmly on track for first LNG in 2014."
Sir Frank continued, "in addition to project delivery, the Group continued to enjoy exploration and appraisal success, maintaining our position as one of the industry's leading explorers."
"In Tanzania, a fourth consecutive success in this emerging new province raised the estimated gross mean recoverable resources to approaching some 7 trillion cubic feet of gas. Offshore Brazil, a new appraisal well confirmed the westerly extension of the Iara accumulation in the BM-S-11 concession, underlining the potential of the Group's interests in the world-class pre-salt Santos Basin."
Commenting on the Group's funding programme, Sir Frank highlighted that, "since the start of the year, BG Group has met important milestones, executing a Memorandum of Understanding to sell our stake in Comgás and reaching an agreement for the sale of the Quintero regasification terminal in Chile; we are also moving further ahead with our plans to divest our interests in
gas-fired power generation plants in the Philippines. The execution of our funding plan was complemented by an agreement with Export Development Canada for a credit facility of
$500 million and, also, by the acceptance from the Brazilian Federal Development Bank of
BG Group's eligibility for up to $1.8 billion in long-term financing for its projects in Brazil."
Sir Frank also remarked upon the Elgin incident in the UK North Sea, in which BG Group holds a 14.11% interest, "we continue to work closely with the operator, Total, to ensure the issue is resolved in a safe and timely manner."
In conclusion, Sir Frank said, "BG Group has delivered significantly stronger financial results in the first quarter and with new production coming onstream, further progress on our major projects, and continued exploration success, we remain firmly on track to achieve our long-term objectives."
