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BG Group (BG.)

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Wednesday 31 October, 2012

BG Group

3rd Quarter Results

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

·   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
$m

2011
$m



Business Performance(a)

 

2012
$m

2011
$m


2 273

1 943

+17%


Total operating profit including share of pre-tax

operating results from joint 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)

 

 

 

2 308

1 892

+22%

 

Operating profit before share of results from joint ventures and associates

5 044

5 563

-9%

2 403

2 013

+19%

 

Total operating profit including share of pre-tax

operating results from joint ventures and associates

5 388

5 930

-9%

1 289

1 060

+22%

 

Earnings for the period continuing operations

2 539

2 900(b)

-12%

37.9c

31.3c

+21%

 

Earnings per share continuing 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
$m

 

2011   
$m   

 

 

Business Performance

2012
$m

 

2011   
$m   

 

 

5 588

 

5 397

 

+4%

Revenue and other operating 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

 

-

2 273

 

1 943

 

 

+17%

Total operating profit including share of pre-tax results from joint ventures and 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%

 

 


 

 

 

 

 


 

 

2 770

 

2 869

 

-3%

Capital investment on a 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
$m

 

2011  
$m   

 

 

Business Performance

2012
$m

 

2011   
$m   

 

 

59.4

 

56.8

 

+5%

Production volumes (mmboe)

181.6

 

173.9

 

+4%

 

 


 

 

 

 

 


 

 

2 859

 

2 497

 

+14%

Revenue and other operating income

8 648

 

7 794

 

+11%

 

 


 

 

 

 

 


 

 

1 440

 

1 310

 

+10%

Total operating profit before 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%

 

 


 

 

 

 

 


 

 

2 057

 

2 014

 

+2%

Capital investment on a 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
$m

 

2011   
$m   

 

 

Business Performance

2012
$m

 

2011  
$m   

 

 

2 048

 

2 235

 

-8%

Revenue and other operating income

6 254

 

5 776

 

+8%

 

 


 

 

 

 

 


 

 

 

 


 

 

 

 

 


 

 

716

 

572

 

+25%

Shipping and marketing

2 020

 

1 567

 

+29%

87

 

81

 

+7%

Liquefaction

258

 

249

 

+4%

(36)

 

(33)

 

+9%

Business development and other

(105)

 

(73)

 

+44%

767

 

620

 

+24%

Total operating profit

2 173

 

1 743

 

+25%

 

 


 

 

 

 

 


 

 

622

 

773

 

-20%

Capital investment on a 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
$m

 

2011  
$m   

 

 

Business Performance

2012
$m

 

2011  
$m   

 

 

 

 

 

 

 

 

 

 

 

 

 

700

 

685

 

+2%

Comgás

1 996

 

1 857

 

+7%

219

 

250

 

-12%

Other

761

 

731

 

+4%

919

 

935

 

-2%

Revenue and other operating income

2 757

 

2 588

 

+7%

 

 


 

 

 

 

 


 

 

 

 


 

 

 

 

 


 

 

155

 

153

 

+1%

Comgás before gas cost 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%

 

 


 

 

 

 

 


 

 

91

 

82

 

+11%

Capital investment on a 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

 

 

 

Notes

Business    Perform-  
ance(a)
$m   

Disposals,   
re-measure-   
ments and     impairments    
(Note 2)(a)
$m   

Total
Result
$m


Business    Perform-  
ance(a)
$m   

Disposals,   
re-measure-   
ments and     impairments    
(Note 2)(a)
$m    

Total
Result
$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

 

 

Operating costs

 

(3 410)

-

(3 410)

 

(3 575)

-

(3 575)

 

 

Profits and losses on disposal of non-current assets and impairments

2

-

132

132

 

-

(1)

(1)

 

 

Operating profit/(loss)(b)

3

2 178

130

 2 308

 

1 822

70

 1 892

 

 

Finance income

2, 4

30

15

45

 

23

(51)

(28)

 

 

Finance costs

2, 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

 

 

Taxation

2, 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

 

 

 

Notes

Business    Perform-  
ance(a)
$m    

Disposals,   
 re-measure-   
ments and     impairments    
(Note 2)(a)
$m    

Total
Result
$m

 

Business    Perform-  
ance
(a)
$m   

Disposals,   
re-measure-   
ments and     impairments    
(Note 2)
(a)
$m    

Total
Result
$m

 

 

Group revenue

 

16 928

-

16 928

 

15 303

-

15 303

 

 

Other operating income

2

30

148

178

 

12

(148)

(136)

 

 

Group revenue and other operating income

3

16 958

148

17 106

 

15 315

(148)

15 167

 

 

Operating costs

 

(10 680)

-

(10 680)

 

(9 622)

-

(9 622)

 

 

Profits and losses on disposal of non-current assets and impairments

2

-

(1 382)

(1 382)

 

-

18

18

 

 

Operating profit/(loss)(b)

3

6 278

(1 234)

5 044

 

5 693

(130)

5 563

 

 

Finance income

2, 4

108

164

272

 

62

19

81

 

 

Finance costs

2, 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

 

 

Taxation

2, 5

(2 794)

241

(2 553)

 

(2 743)

104

(2 639)

 

 

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
$m

2011
$m 

 

 

2012
$m

2011
$m 

1 331

1 078

 

Profit for the period

2 869

2 971

 


 

 

 


668

197

 

Hedge adjustments net of tax(a)

776

(51)

23

6

 

Fair value movements on 'available-for-sale' assets net of tax(b)

14

3

37

(943)

 

Currency translation adjustments

(548)

(674)

728

(740)

 

Other comprehensive income, net of tax

242

(722)

 


 

 

 


2 059

338

 

Total comprehensive income for the 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
30 Sept
2012
$m

As at
31 Dec
2011
$m

As at   
30 Sept   
2011  
$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)

 

 

(9 107)

(9 085)

(12 597)

Non-current liabilities

 

 



Borrowings

 

(14 357)

(13 977)

(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)

 

 

(23 573)

(22 523)

(15 365)

Liabilities associated with assets classified as held for sale(a)

 

(1 729)

(99)

(102)

Total liabilities

 

(34 409)

(31 707)

(28 064)

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 up share capital
$m

Share premium account

$m

Hedging reserve
$m

Translation reserve
$m

Other reserves
$m

Retained earnings
$m

Total
$m

Non-con-trolling interest
$m

Total
$m

 

Equity as at 31 December 2011

577

584

(642)

2 508

2 710

23 647

29 384

291

29 675

 

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 September 2012

578

612

(245)

2 358

2 710

25 658

31 671

334

32 005

 

 

 

 

 

 

 

 

 

 

 

 

 

Called up share capital
$m

Share premium account

$m

Hedging reserve
$m

Translation reserve
$m

Other reserves
$m

Retained earnings
$m

Total
$m

Non-con-trolling interest
$m

Total
$m

 

Equity as at 31 December 2010

576

537

(457)

2 877

2 710

20 085

26 328

356

26 684

 

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 September 2011

577

570

(505)

2 225

2 710

22 267

27 844

307

28 151

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   
$m   

2011 
$m 

 

 

2012   
$m   

2011  
$m  

 

 

 

Cash flows from operating activities

 

 

2 323

1 918

 

Profit before tax(a)

5 423

5 611

(63)

(73)

 

Share of post-tax results from joint ventures and associates

(224)

(227)

630

573

 

Depreciation of property, plant and equipment and amortisation
of intangible assets

1 944

1 706

-

(53)

 

Fair value movements in commodity based contracts

(176)

200

(132)

1

 

Profits and losses on disposal of non-current assets and impairments(b)

1 127

(18)

4

61

 

Unsuccessful exploration expenditure 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

 


63

13

 

Dividends received from joint ventures and associates

115

108

176

1

 

Proceeds from disposal of property, plant and equipment, intangible assets and investments

1 265

196

(2 638)

(2 770)

 

Purchase of property, plant and equipment and intangible assets

(7 372)

(7 726)

(3)

(41)

 

Loans to joint ventures and associates

(14)

(129)

308

25

 

Repayments from joint ventures and associates

662

75

(129)

(58)

 

Investments in subsidiaries, joint 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)

(5)

(56)

 

Dividends paid to non-controlling interest

(18)

(93)

28

860

 

Net proceeds from issue and repayment of borrowings

1 815

2 912

10

7

 

Issue of shares

29

34

-

-

 

Purchase of own shares

(16)

(25)

(433)

399

 

Net cash inflow/(outflow) from financing activities

667

1 882

(726)

(536)

 

Net increase/(decrease) in cash and cash equivalents(d)

1 098

(857)

5 380

2 204

 

Cash and cash equivalents at beginning of period(e)

3 601

2 551

13

(41)

 

Effect of foreign exchange rate changes

(32)

(67)

4 667

1 627

 

Cash and cash equivalents at end 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
$m

2011
$m

 

 

2012
$m

2011
$m

(2)

71

 

Revenue and other operating income - re-measurements of commodity based contracts

148

(148)

132

(1)

 

Profits and losses on disposal of non-current assets and impairments

(1 382)

18

5

(11)

 

Net finance (costs)/income - re-measurements 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

Business Performance

Disposals,
re-measurements and impairments

Total Result

Analysed by operating segment

Third Quarter

2012
$m

2011
$m

2012
$m

2011
$m

2012
$m

2011
$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

 

Business Performance

Disposals,
re-measurements and impairments

Total Result

Nine Months

2012
$m

2011
$m

2012
$m

2011
$m

2012
$m

2011
$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

 

Business Performance

Disposals,
re-measurements and impairments

Total Result

Third Quarter

2012
$m

2011
$m

2012
$m

2011
$m

2012
$m

2011
$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

 

 

Business Performance

Disposals,
re-measurements and impairments

Total Result

Nine Months

2012
$m

2011
$m

2012
$m

2011
$m

2012
$m

2011
$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
$m

2011
$m

 

 

2012
$m

2011
$m

(163)

(71)

 

Interest payable(a)

(399)

(199)

(26)

(27)

 

Interest on obligations under finance 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:

Business Performance

Disposals,
re-measurements and impairments

Total Result

 

Third Quarter

2012
$m

2011
$m

2012
$m

2011
$m

2012
$m

2011
$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:

Business Performance

Disposals,
re-measurements and impairments

Total Result

 

Nine Months

2012
$m

2011
$m

2012
$m

2011
$m

2012
$m

2011
$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


$m

cents per share

$m

cents per share

 

 


$m

cents per share

$m

cents per share

1 189

35.0

1 021

30.1

 

Earnings - continuing operations excluding disposals, re-measurements and impairments

3 529

103.9

2 960

87.4

100

2.9

39

1.2

 

Disposals, re-measurements
and impairments (after tax and non-controlling interest)

(990)

(29.1)

(60)

(1.8)

1 289

37.9

1 060

31.3

 

Earnings - continuing 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

Net borrowings as at 31 December 2011

(11 336)

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

Net borrowings as at 30 September 2012

(10 974)

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
30 Sept
2012
$m

As at
31 Dec
2011
$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

 

 

Loans and finance leases(b)

(14 162)

(13 784)

Derivative financial instruments(a)

247

52

 

(13 915)

(13 732)

Net borrowings

(10 974)

(11 336)

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

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 £45 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


$m

cents
per share

$m

cents
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
$m

2011
$m

2012
cents

2011
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

Third Quarter

Second 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

 



 

 

 


$107.80

$113.71

$109.18

 

Average realised oil price per barrel

$111.22

$113.27

 



 

 

 


$95.57

$96.01

$89.95

 

Average realised liquids price per barrel

$95.02

$92.51

 



 

 

 


65.45c

63.09c

70.92c

 

Average realised UK gas price per produced therm

70.17c

68.40c

(41.86p)

(38.96p)

(44.61p)

 

(44.45p)

(42.42p)

 



 

 

 


46.32c

39.06c

41.08c

 

Average realised International gas price per produced therm

41.73c

38.05c

 



 

 

 


47.95c

40.62c

44.25c

 

Average realised gas price 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

 



 

 

 


1 785

1 785

1 623

 

Development expenditure (including acquisitions) ($m)

4 845

4 521

 



 

 

 


 



 

Gross exploration expenditure ($m)

 


193

193

164

 

Capitalised expenditure (including 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

Third Quarter

Second
 Quarter

 


Nine Months

2012

2011

2012

 

 

2012

2011

 

 

 

 

Exploration expenditure charge ($m)

 

 

4

61

143

 

Capitalised expenditure written 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

2 770

2 869

2 385

 

Capital investment on a cash 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

2 057

2 014

1 589

 

Capital investment on a cash 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

622

773

720

 

Capital investment on a cash 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

Third Quarter

Second
 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

91

82

76

 

Capital investment on a cash 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

 



 

 

 


3 036

3 433

2 957

 

LNG managed volumes (thousand 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

 

 

Capital investment

Comprises expenditure on property, plant and equipment, other intangible assets and investments, including business combinations

 

 

Capital investment on a cash basis

Comprises cash flows on purchase of property, plant and equipment and intangible assets, loans to joint ventures and associates and investments in subsidiaries, joint ventures and associates

 

 

E&P

Exploration and Production

 

 

FPSO

Floating Production Storage and Offloading system

 

 

Gearing ratio

net borrowings as a percentage of total shareholders' funds (excluding the re-measurement
of commodity financial instruments and associated deferred tax) plus net borrowings

 

 

IAS

International Accounting Standard issued by the IASB

 

 

IASB

International Accounting Standards Board

 

 

IFRIC

International Financial Reporting Interpretations Committee

 

 

IFRS

International Financial Reporting Standards

 

 

kboed

thousand barrels of oil equivalent per day

 

 

LNG

Liquefied Natural Gas

 

 

Managed
volumes

Comprises all LNG volumes contracted for purchase and having related revenue and other

operating income recognised in the applicable 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 profit

Operating profit plus share of pre-tax operating results of joint ventures and associates

 

 

UKCS

United Kingdom Continental Shelf

 

 

Unit operating expenditure
per boe

Production costs and royalties incurred over the period divided by the net production 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 lifting costs per boe

'Unit operating expenditure' as defined above, excluding royalty, tariff and insurance costs incurred over the period divided by the net production for the period.

 

 

 

Enquiries

 

 

Enquiries relating to BG Group's results, business
and financial position should be made to:

General enquiries about shareholder matters
should be made to:

 

Investor Relations Department
BG Group plc
Thames Valley Park Drive
Reading
Berkshire
RG6 1PT

Equiniti Limited
Aspect House
Spencer Road
Lancing
West Sussex
BN99 6DA

 

Tel: 0118 929 3025
e-mail: invrel@bg-group.com

Tel: 0871 384 2064
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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