1st Quarter Results

2013 FIRST QUARTER RESULTS

First Quarter Key Points

·; Earnings down 3% to $1.2 billion

·; Production down 3%; LNG segment total operating profit up 3%; both in line with guidance

·; Cash flow from operations up 3% to $2.7 billion; gearing at 23.5%

·; Q1 project milestones delivered: Sapinhoá and Everest East start-ups; Elgin/Franklin re-start

·; De-risking future milestones: FPSO 3 on location at Lula NE; all Jasmine modules installed

·; QCLNG remains on track: critical Narrows Crossing pipe-pull safely completed

·; FPSO 2 onstream in Brazil bringing total gross production to around 140 000 boed

·; Successful appraisal results in Tanzania: very good results from Jodari and Mzia drill stem tests

·; Completion of long-term sales agreement for up to 2.5 mtpa of LNG to India

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 9) and notes 1 to 3(pages 16 to 19). Unless otherwise stated, the results discussed in this release relate to BG Group's Business Performance.

b) 2012 results have been restated to reflect the presentation of the majority of the businesses that comprised the Transmission & Distribution segment as discontinued operations and the adoption of the amended IAS 19 in respect of defined benefit pension obligations (see note 1, page 16).

BG Group's Chief Executive, Chris Finlayson said:

"As I outlined in February, we continue a relentless focus on safety as well as excellence in execution across our growth projects and base assets. We have made a good start to the year, delivering the three key milestones for the first quarter, whilst also making progress with our project execution programme for the year.

"First quarter results were consistent with our expectations and guidance. Earnings were down 3%, reflecting the impact of lower production volumes and increased costs in the Upstream segment. LNG Shipping & Marketing total operating profit was up 3% at $742 million, which is in line with our 2013 outlook. Additionally, cash flow from operations was up 3% to $2.7 billion and gearing ended the quarter at 23.5%.

"We set three key project milestones for the first quarter and we have delivered on those commitments. In Brazil, the second FPSO began operations on time and on budget, while in the UK, Elgin/Franklin resumed production from three wells and our Everest East expansion project was brought onstream. Additionally, future 2013 project milestones remain on target, most notably with FPSO 3 now moored on location and all modules for Jasmine installed ahead of expected start-up in the fourth quarter."

On the Group's major growth projects, Chris highlighted continuing progress saying: "In Australia, despite the impact of heavy rain throughout the first quarter on our drilling activities and pipeline construction, we made good progress on the QCLNG project and remain on target for both first LNG in 2014 and the $20.4 billion Phase 1 cost estimate. We were slightly behind our first quarter well target; however, we have already recovered the impact on drilling activities and expect to make up the pipeline schedule impacts during the course of the year.

"We achieved a critical milestone by safely connecting Curtis Island to the mainland via Australia's longest large-diameter underwater pipe-pull beneath the Narrows Crossing. At the terminal on Curtis Island, all 62 modules required for Train 1 and the common facilities have been delivered, and the 900 tonne steel dome roof on the first LNG storage tank has been raised.

"In Brazil, the start-up of our second FPSO, on schedule and budget, has increased total gross production from our interests in the Santos Basin to around 140 000 barrels of oil equivalent per day. The third FPSO is on schedule to start production in the second quarter, while work on the fourth and fifth FPSOs is around 60% complete, with one en route from China to Brazil."

Chris added: "Elsewhere in our portfolio, we completed a successful appraisal at the Jodari and Mzia fields offshore Tanzania with results showing better than expected reservoir properties. We also finalised the agreement for the long-term sale of up to 2.5 million tonnes per annum of LNG to India, and in Egypt, as part of our recovery plan, we sanctioned the next development phase for the West Delta Deep Marine concession with drilling now started ahead of new production in 2014. While our receivable balance in respect of domestic gas sales was reduced by $0.1 billion from year end, we continue to monitor the business environment in Egypt closely."

In conclusion Chris said: "I am pleased with the delivery of our key milestones in the first quarter. We have made a good start to the year and while there is still more to accomplish, I am encouraged by the progress we are making against our remaining 2013 targets."

Business Review - Group

a) See note 1 (page 16).

b) Includes capital investment relating to discontinued operations for the quarter of $5 million (2012 $85 million).

First quarter

Revenue and other operating income increased 1% to $4 917 million, reflecting the benefit of higher realised gas prices partially offset by a 3% decrease in production volumes and fewer LNG cargo deliveries.

Total operating profit of $2 147 million was 5% lower as the increase in revenue and other operating income was more than offset by higher operating costs and depreciation in the Upstream segment.

Net finance costs of $35 million included foreign exchange gains of $5 million (2012 included $21 million of interest received on tax refunds and foreign exchange losses of $9 million).

The Group's effective tax rate (including BG Group's share of joint venture and associates' tax) was 44% for the quarter, slightly lower than the rate of 45% for the first quarter of 2012.

Cash generated by operations increased 3% to $2 734 million reflecting a lower working capital cash outflow.

As of 31 March 2013, the Group's net debt was $10 609 million, and the gearing ratio was 23.5%. The average maturity of the Group's gross borrowings remains around 17 years. 

Capital investment (excluding acquisitions and on a cash basis) of $2 636 million was predominantly in the Upstream segment ($2 628 million). This investment was focused primarily on the Group's major projects in Australia, Brazil, the UK and Egypt. Further details on key project developments are provided in the first quarter business highlights section.

Disposals, re-measurements and impairments - continuing operations

Total results included a pre-tax gain of $35 million ($25 million post-tax; 2012 pre-tax charge of $77 million,$55 million post-tax) for the first quarter in respect of disposals, re-measurements and impairments. This comprised a pre-tax gain of $93 million (2012 $53 million charge) in relation to mark-to-market movements on long-term commodity contracts and economic hedges, a pre-tax gain of $10 million (2012 $1 million charge) in respect of disposals and impairments, and $68 million of net finance costs (2012 $23 million). For further information see Presentation ofNon-GAAP measures (page 9) and notes 1 to 3 (pages 16 to 19).

First quarter business highlights

Australia

Good progress continues to be made on Queensland Curtis LNG (QCLNG) with Phase 1 of the project on track for both first LNG in 2014 and the $20.4 billion cost estimate.

In the upstream, despite severe wet weather throughout the quarter, the pace of drilling was good with 126 wells drilled against a target of 130. With better weather in April and 11 rigs in operation, the Group is now back on schedule.

Construction of the pipeline infrastructure achieved a critical milestone in February when the 2.3 kilometre Narrows Crossing pipeline was laid across Gladstone harbour without injury or incident. This was a significant engineering achievement being Australia's longest large-diameter underwater pipe-pull, and it is the first pipeline to connect Curtis Island with the mainland. While the severe weather and flooding slowed pipeline construction, those activities are back to a normal level, and the Group expects to make up lost time in the coming months. More than 90% of the 200 kilometre gas collection system is now in the ground and has been backfilled. Around 80% of the mainline welding for the 340 kilometre export pipeline is complete, with around 60% of the pipeline lowered into the ground.

On Curtis Island, the liquefaction plant and common facilities are on track. The 900 tonne steel dome roof was raised to the top of the first LNG storage tank in February. Additionally, all 62 modules required for Train 1 have been delivered, and the remaining 18 modules that support Train 2 are scheduled to be delivered by year end.

Brazil

Development in the Santos Basin proceeded as expected with the delivery of the second of 15 planned floating production, storage and offloading (FPSO) vessels. The FPSO Cidade de São Paulo (FPSO 2) came onstream on the Sapinhoá field in January on time and on budget. Following commissioning of the gas processing and reinjection systems in April, the facility is producing around 25 000 barrels of oil equivalent per day (boed). Gross production from BG Group's first two FPSOs increased to around 140 000 boed during April.

In February, an extended well test started in the Sapinhoá North area of the BM-S-9 concession using the FPSO Cidade de São Vicente. The FPSO will operate for up to six months, gathering technical information on reservoir behaviour and oil flow in the subsea lines, among other data, in preparation for the northern development. During this initial test phase the well is expected to produce around 15 000 barrels of oil per day (bopd).

Development of the remainder of the FPSO fleet remains on track, with FPSO 3 moored on location scheduled for start-up on the Lula field as planned in the second quarter. Work continues on FPSOs 4 and 5 planned for Sapinhoá and Iracema respectively, with one en route to Brazil. Both FPSOs are on budget and are around 60% complete, ahead of planned start-up in 2014.

To ensure continued timely delivery of the pre-salt development programme, BG Group and partners in BM-S-11 signed letters of intent to charter two FPSOs for deployment at Lula Alto and Lula Central. These FPSOs will replace the last two of the eight replicant FPSOs. The two new chartered FPSOs are planned to commence production in the first quarter of 2016, each with capacity of 150 000 bopd and 212 million standard cubic feet per day (mmscfd) of natural gas.

Further exploration and appraisal activity is also being undertaken in the Santos Basin. In February, BG Group made a discovery with the Sagitário well, the first to be drilled on the BM-S-50 concession. The well confirmed the presence of good quality oil and continues to be drilled to evaluate deeper targets. On BM-S-11, the Iara appraisal programme continues with the drilling of the Iara-4 well. Initial results have confirmed good quality oil in the reservoirs.

Egypt

In February, BG Group and its partner approved the next phase of development for the West Delta Deep Marine concession (WDDM), offshore the Nile Delta. The Phase 9a development is one element of the recovery plan for arresting production decline in the WDDM concession. Drilling has now commenced, with first production in 2014. Phase 9a includes drilling nine new wells during 2013 and 2014 as part of a wider plan for new wells in the field.

First quarter business highlights (continued)

Egypt (continued)

As at 31 March 2013, the Group's receivable balance from Egypt General Petroleum Corporation (EGPC) in respect of domestic gas sales was $1.2 billion, a reduction of $0.1 billion from year end. The overdue balance remained at$0.6 billion. Based on repayment terms agreed with EGPC, the Group expects this balance and all future forecast receivables to be current by 2017, in line with previous guidance. However, the recovery of receivables in this timeframe, and the full realisation of the carrying value of the Group's Egyptian operations, remain dependent on the business environment in Egypt, which BG Group continues to monitor closely.

Honduras

In April, BG Group signed an Operating Contract, subject to approval by the National Congress, for an exploration licence covering approximately 35 000 square kilometres, offshore Honduras.

India

In March, BG Group continued its expansion in Asia-Pacific markets with the completion of an agreement for thelong-term sale of LNG to Gujarat State Petroleum Corporation Limited (GSPC) in India, concluding negotiations announced in September 2011. The Group will supply GSPC with 1.25 mtpa of LNG for 20 years beginning in 2015, potentially increasing to 2.5 mtpa after two years. GSPC will be supplied from the Group's global LNG portfolio.

Tanzania

The Group continued its successful exploration and appraisal record offshore Tanzania with the completion in March of its appraisal programme on the Jodari field in Block 1. The drill stem test on the original gas discovery well confirmed the excellent quality of the Tertiary reservoir, which flowed at a maximum rate of 70 mmscfd. The results, which were constrained by the test equipment, showed better than expected reservoir properties, including high connectivity, and demonstrated that future development wells could produce at higher rates.

In April, a further successful drill stem test was also completed on the Mzia-2 well in Block 1. The test flowed at57 mmscfd, constrained by equipment, indicating better than expected reservoir properties and demonstrating the potential of the deeper Cretaceous play.

The drillship Deepsea Metro-1 is now drilling the Ngisi-1 prospect in Block 4 and will subsequently appraise the easterly extension of the Chewa discovery.

Further 3-D seismic data has now been acquired, and this data, along with results from the current drilling programme, will be used to develop the next exploration and appraisal campaign expected to commence later in 2013.

United Kingdom

In March, the non-operated Elgin/Franklin area resumed operations with three wells back onstream, having beenshut down since March 2012 due to a gas leak on the G4 well. However, it is not expected to recover to pre shut-down production levels until 2015, which will require new infill wells to be drilled.

Additionally, the Everest East expansion project started production in March. The development comprises twosub-sea wells tied back to the North Everest platform. It is expected that the project will provide initial peak production of more than 10 000 boed with total gross reserves of around 20 million boe.

All modules on the Jasmine project have now been installed on location ahead of schedule, substantially de-risking the project prior to start-up in the fourth quarter.

Portfolio rationalisation programme

In the quarter, BG Group signed and completed a sale and purchase agreement with EXCO Resources for the divestment of all its interests in the non-core conventional producing assets and acreage in the Cotton Valley formation in East Texas and North Louisiana for approximately $131 million. The net contribution to BG Group expected from these assets in 2013 was 3 000 boed.

First quarter business highlights (continued)

Board changes

In February, Fabio Barbosa was appointed Chairman BG South America, reporting to Chief Executive Chris Finlayson. Mr. Barbosa stepped down as Chief Financial Officer (CFO) and Executive Director. Den Jones, BG GroupFinancial Controller, who acted as Mr. Barbosa's alternate director during his leave of absence, was appointed a director of BG Group plc. Mr. Jones will continue as Interim CFO pending the conclusion of a succession process for the role of CFO, which encompasses both internal and external candidates.

In February, Philippe Varin stepped down from the Board after almost seven years as a Non-Executive Director.

In March, Lim Haw-Kuang was appointed as a Non-Executive Director, filling the vacancy left by Mr. Varin.Mr. Lim is the former Executive Chairman of Shell companies in China.

Upstream

a) See note 1 (page 16).

Additional operating and financial data is given on page 25.

First quarter

Revenue and other operating income increased 3% to $3 072 million, reflecting higher realised gas prices partially offset by lower production volumes, which were in line with the Group's expectations. Volumes were 3% lower due to the shutdown at Elgin/Franklin in the UK, which resumed production in March, and reservoir decline in Egypt. These reductions were partially offset by new developments onstream in Thailand and Bolivia, continued ramp-up of production in Brazil, including first production from the Sapinhoá field in January, and first production from theEverest East expansion project in the UK in March.

The Group's average realised gas price increased 12% to 46.10 cents per therm. International gas price realisations were 9% higher at 41.23 cents per therm, reflecting generally higher market prices and changes in the production mix. The average realised gas price in the UK increased 25% to 58.40 pence per therm due to higher market prices.The Group's realised oil price decreased 6% to $110 per barrel, while realised liquids prices were 5% lower at$95 per barrel, both reflecting lower market prices.

Total E&P operating profit of $1 326 million was 9% lower as the increase in revenue and other operating income was more than offset by higher operating costs and an increase in the depreciation charge. Unit operating expenditure increased $1.54 per boe to $11.08 per boe, principally reflecting the impact of higher royalty costs as production increased from new developments at royalty-paying fields in Brazil and Bolivia. The unit depreciation charge increased $2.55 per boe to $11.08 per boe primarily due to new developments coming onstream.

The exploration charge decreased 5% to $106 million primarily due to lower well write-offs, partially offset by higher seismic acquisition costs. Gross exploration expenditure of $335 million included Tanzania ($100 million),Brazil ($54 million), Egypt ($45 million), Australia ($37 million) and the UK ($29 million).

BG Group's share of operating profit from liquefaction activities increased 14% to $105 million, primarily as a result of higher processing fee income at Egyptian LNG and higher prices at Atlantic LNG.

Capital investment on a cash basis of $2 628 million included investment in Australia ($1 490 million),Brazil ($455 million), the UK ($208 million) and Egypt ($117 million). 

LNG Shipping & Marketing

a) See note 1 (page 16).

Additional operating and financial data is given on page 25.

First quarter

LNG Shipping & Marketing total operating profit increased 3% to $742 million, as the benefit of lower hedging losses was partially offset by the impact of reduced margins, predominantly as a result of the pricing change on cargoes delivered to Chile, and fewer cargo deliveries.

During the quarter, BG Group delivered 49 LNG cargoes, four fewer than 2012. Cargo deliveries comprised 33 to Asia, 10 to South America, 4 to the USA and 2 to Europe (2012: 53 cargoes: 34 Asia, 12 South America, 5 USA and2 Europe).

These results were in line with BG Group's expectations and reflect the quarterly phasing underpinning the Group'sfull year outlook for total operating profit of $2.5 billion to $2.7 billion.

Presentation of Non-GAAP measures

Legal Notice

Consolidated Income Statement

First Quarter

a) See note 1 (page 16).

b) See Presentation of Non-GAAP measures (page 9) for an explanation of results excluding disposals, certain re-measurements and impairments and presentation of the results of joint ventures and associates.

c) Operating profit/(loss) is before share of results from joint ventures and associates.

d) Comprises earnings from continuing operations of $1 208 million (2012 $1 170 million) and from discontinued operations of $(1) million (2012 $47 million).

e) 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 16 to 24 form an integral part of these condensed financial statements.

Consolidated Statement of Comprehensive Income

a) See note 1 (page 16).

b) Income tax relating to hedge adjustments is a $170 million credit for the quarter (2012 $57 million charge).

c) Income tax relating to fair value movements on 'available-for-sale' assets is $nil for the quarter (2012 $20 million charge).

d) Income tax relating to the re-measurement of defined benefit pension obligations is a $12 million credit for the quarter (2012 $26 million charge).

The notes on pages 16 to 24 form an integral part of these condensed financial statements.

Consolidated Balance Sheet

a) See note 1 (page 16).

The notes on pages 16 to 24 form an integral part of these condensed financial statements.

Consolidated Statement of Changes in Equity

a) See note 1 (page 16).

The notes on pages 16 to 24 form an integral part of these condensed financial statements.

Consolidated Cash Flow Statement

The cash flows above are inclusive of discontinued operations (see note 6, page 22)

a) See note 1 (page 16).

b) Includes profit before tax from discontinued operations for the quarter of $5 million (2012 $104 million).

c) Includes capitalised interest for continuing and discontinued operations for the quarter of $133 million (2012 $99 million).

d) Cash and cash equivalents comprise cash and short-term liquid investments that are readily convertible to cash.

e) The balance at 31 March 2013 includes cash and cash equivalents of $4 300 million (31 December 2012 $4 434 million; 31 March 2012 $3 496 million) and cash included within assets held for sale of $87 million (31 December 2012 $86 million; 31 March 2012 $nil).

The notes on pages 16 to 24 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 31 March 2013. 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 2012 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 2012 which were audited by 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 Annual Report and Accounts 2012, except as stated below.

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 period in which the circumstances change.

In the fourth quarter of 2012, BG Group announced agreements to sell both the Group's interest in Gujarat Gas Company Limited in India and the Group's interest in the Brazil-Bolivia Pipeline as well as the disposals of Comgás in Brazil and BG Italia Power in Italy. As a result, these operations, which represented the majority of the Group's Transmission and Distribution business segment and were considered to be a separate major line of business forBG Group, have been treated as discontinued. 

The Transmission and Distribution businesses remaining with BG Group, principally Mahanagar Gas in India, are now included within the Other business segment. 

A single amount is presented on the income statement for discontinued operations, comprising the post-tax results of these businesses and the post-tax profit or loss recognised on re-measurement to fair value less costs to sell and on disposal of the businesses. Comparative information has also been restated to reflect the presentation of discontinued operations as a separate line item.

In its 2012 fourth quarter and full year results, BG Group announced that following a review of the remaining business segments, the liquefaction businesses were combined with the previous E&P segment to form the 'Upstream' segment, and the remaining businesses which comprised the LNG segment were renamed 'LNG Shipping & Marketing'. The new segmental presentation is consistent with the basis used to present information for internal reporting purposes. 

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 18), 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

The IASB issued an amended IAS 19 'Employee Benefits' in June 2011. The main amendment is to eliminate the option to defer the recognition of actuarial gains and losses, known as the 'corridor method'. The impact on the Group is that all actuarial gains and losses will be recognised in other comprehensive income as they occur. In addition, net interest expense will be calculated based on applying a single discount rate to the net deficit, replacing interest cost and expected return on plan assets. The amended standard has been adopted by the Group for the year ended31 December 2013 and comparative information has been restated. The impact on the balance sheet as at1 January 2012 is a reduction in net assets of $164 million. For the period ended 31 March 2012, the impact on profit before tax was a $6 million reduction and the impact on other comprehensive income was a $77 million gain. The impact on the balance sheet as at 1 January 2013 is a reduction in net assets of $146 million. The impact on the balance sheet as at 31 March 2012 is a reduction in net assets of $91 million.

The IASB issued an amended IAS 1 'Presentation of Financial Statements' in June 2011. The main amendment is a requirement to group items presented in other comprehensive income on the basis of whether they are potentially reclassifiable to the income statement. The amended standard has been adopted by the Group as of 1 January 2013 and has not had a material impact on the Group's financial statements for the quarter ended 31 March 2013. 

A number of other amendments to accounting standards issued by the IASB are applicable from 1 January 2013. They have not had a material impact on the Group's financial statements for the quarter ended 31 March 2013.2. Disposals, re-measurements and impairments

a) See note 1 (page 16).

Revenue and other operating income

Re-measurements included within revenue and other operating income amount to a credit of $93 million for the quarter (2012 $53 million charge), of which a credit of $6 million (2012 $23 million charge) represents non-cash mark-to-market movements on certain long-term gas contracts. 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 an $87 million credit for the quarter (2012 $30 million charge) representing unrealised mark-to-market movements associated with economic hedges.

Disposals of non-current assets and impairments

During the first quarter, disposals and impairments resulted in a pre and post-tax credit to the income statement of$10 million (2012 pre and post-tax charge of $1 million).

Net finance costs

Re-measurements presented in net finance costs/income includes foreign exchange movements on certain borrowings and movements on monetary items that form part of the Group's net investment in foreign operations, offset bymark-to-market movements on certain derivatives used to hedge foreign exchange and interest rate risk.

3. Segmental analysis

a) See note 1 (page 16).

b) External sales are attributable to segments as follows: Upstream $2 877 million (2012 $2 770 million), LNG Shipping & Marketing $2 032 million (2012 $2 108 million) and Other $1 million (2012 $3 million). Intra-group sales are attributable to segments as follows: Upstream $193 million (2012 $221 million) and LNG Shipping & Marketing$9 million (2012 $71 million).

c) Business Performance Other operating income is attributable to segments as follows: Upstream $2 million (2012 $(4) million) and LNG Shipping & Marketing $5 million (2012 $(1) million). 

3. Segmental analysis continued

a) See note 1 (page 16).

4. Net finance (costs)/income

a) See note 1 (page 16).

b) In 2013 interest receivable includes foreign exchange gains of $5 million (2012 interest payable includes losses of $9 million).

c) 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' net deficit.

d) Net finance (costs)/income on disposals, re-measurements and impairments for the quarter of $(68) million (2012 $(23) million) is included in note 2 (page 18) 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.

e) Excludes the Group's share of net finance costs from joint ventures and associates for the quarter of $7 million (2012 $15 million).

5. Taxation

a) See note 1 (page 16).

Business Performance taxation for the first quarter, including share of taxation from joint ventures and associates, is$929 million (2012 $1 014 million). The effective tax rate of 44% for the first quarter is based on the best estimate of the weighted average annual income tax rate expected for the full year (first quarter 2012 45%). 

6. Discontinued operations

The post-tax profit of the businesses comprising discontinued operations for the quarter was $3 million(2012 $67 million).

In October 2012, BG Group announced it had reached agreement to sell its 65.12% interest in Gujarat Gas Company Limited in India for Indian Rupees 24.6 billion (approximately $450 million) to GSPC Distribution Networks Limited,a subsidiary of Gujarat State Petroleum Corporation. This transaction is expected to complete during the first half of 2013.

7. Earnings per ordinary share - continuing operations

a) See note 1 (page 16).

.

Basic earnings per share calculations in 2013 are based on the weighted average number of shares in issue of3 399 million for the quarter.

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 3 418 million for the quarter, 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) - First Quarter

As at 31 March 2013, BG Group's share of the net borrowings in joint ventures and associates amounted to approximately $1.2 billion, including BG Group shareholder loans of approximately $0.7 billion. These net borrowings are included in BG Group's share of the net assets in joint ventures and associates which are consolidated inBG Group's accounts.

a) Net borrowings are defined on page 28.

Net borrowings comprise:

a) These items are included within commodity contracts and other derivative financial instrument balances on the balance sheet.

b) Includes finance lease receivable of $196 million (2012 $195 million) included within non-current assets on the balance sheet.

Liquidity and Capital Resources

All the information below is as at 31 March 2013

The Group's principal borrowing entities are BG Energy Holdings Limited and certain wholly owned subsidiary undertakings, the majority of whose borrowings are guaranteed by BG Energy Holdings Limited (collectively BGEH).

BGEH had a $4.0 billion US Commercial Paper Programme and a $2.0 billion Eurocommercial Paper Programme, both of which were unutilised. During 2012, BGEH also had a $15.0 billion Euro Medium Term Note Programme, of which $8.4 billion was unutilised. This programme is expected to be renewed in 2013.

BGEH had aggregate undrawn committed revolving bank borrowing facilities of $5.2 billion, of which $2.18 billion expires in 2016 and $3.04 billion expires in 2017. BGEH also had $2.3 billion of undrawn credit facilities provided by export credit agencies, $1.8 billion of which is subject to documentation.

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.

9. Quarterly information: earnings and earnings per share

a) See note 1 (page 16).

.

10. Commitments and contingencies

Details of the Group's commitments and contingent liabilities as at 31 December 2012 can be found in note 24,page 120 of the Annual Report and Accounts 2012. The Group's capital expenditure commitments have decreased by approximately $1 billion in the three month period to 31 March 2013, primarily due to progress on the Group's major growth projects. There have been no material changes to the Group's other commitments or contingent liabilities in the period.

11. 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 2012 can be found in note 25, page 122 of the Annual Report and Accounts 2012. There have been no material changes in these relationships in the three month period to 31 March 2013. No related party transactions have taken place in the first three 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

Supplementary information: Operating and financial data continued

Historical supplementary information is available on the BG Group plc website: www.bg-group.com

Glossary