27th Jan 2014 08:38
LONDON (Alliance News) - BG Group Monday said it has achieved production in line with estimates but has issued force majeure notices under its liquefied natural gas agreements in Egypt and lowered its guidance for 2014 and 2015.
The FTSE 100 major oil and gas company said it achieved full-year 2013 production volumes of roughly 633,000 barrels of oil equivalent per day, achieving the lower end of the company's outlook of 630,000 to 660,000 barrels.
However, BG Group revised down its 2014 forecast production volumes to be in the range of 590,000 to 630,000 barrels of oil equivalent per day in 2014, and 2015 levels in the range of 710,000 to 750,000 barrels of oil equivalent per day, down from the company's 775,000 to 825,000 barrels of oil equivalent per day guidance given in September.
The company said year-on-year decline in Egypt and the US are the drivers of volume decline.
BG Group said it expects LNG shipping and marketing total operating profit in 2013 of around USD2.6 billion, in line with its guidance but that it is expecting non-cash, post-tax impairments of roughly USD2.4 billion, associated mainly with losses in Egypt.
The company said that diversions to the energy market in Egypt during the fourth quarter were higher than expected and, as a result, the company has been unable to meet its Egyptian LNG obligations. The company said that due to the current political problems in Egypt, it has served force majeure notices under its LNG agreements in Egypt to buyers and lenders.
BG Group said that it remains committed to the Egyptian LNG Project and will continue to negotiate with the Egyptian authorities and other stakeholders to seek a long-term solution.
The company said it expects a total 2013 earnings, after impairments, to be down roughly 33% at roughly USD2.2 billion, and business performance earnings, which excludes disposals, certain re-measurements and some impairments, to be flat at roughly USD4.4 billion.
However, the company said its long-term strategy remains unchanged, and it expects to be free cash flow to be positive in 2015.
BG Group shares were down 15% to 1,172.00 pence, making it the biggest FTSE 100 faller in early trading Monday.
By Tom McIvor; [email protected]; @TomMcIvor1
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