2nd Nov 2006 08:28
BG GROUP plc02 November 2006 Due to a processing issue the following amendment has been made to the '3rd Quarter Results' announcement released today 2 November 2006 at 07:00 underRNS No 4136L. Under Consolidated Income Statement Third Quarter the Restated year should haveread 2005 not 2006. All other details remain unchanged.The full amended text is shown below. BG GROUP PLC 2006 THIRD QUARTER RESULTS BG Group's Chief Executive, Frank Chapman said: "These results reflect a strong operating performance. In addition, our keyprojects continued to make good progress, we saw significant exploration successand we continued to strengthen the portfolio of future opportunities." HIGHLIGHTS ________________________________________________________________________________ Third Quarter Nine Months 2006 2005(i) Business Performance(ii) 2006 2005(i) £m £m £m £m Revenue and other operating 1 647 1 339 +23% income 5 373 3 566 +51% Total operating profit including share of pre-tax operating results from joint ventures and 633 551 +15% associates 2 343 1 529 +53% 342 307 +11% Earnings for the period 1 268 851 +49% - - - Prior period taxation(iii) (38) - - Earnings after prior period 342 307 +11% taxation 1 230 851 +45% 10.0p 8.6p +16% Earnings per share 35.3p 24.0p +47% _________________________________________________________________________________ Total results for the period (including disposals and re-measurements) Revenue and other operating 1 751 1 360 +29% income 5 586 3 429 +63% Operating profit before share of results from joint ventures and685 512 +34% associates 2 370 1 653 +43% Total operating profit including share of pre-tax operating results from joint ventures and 737 572 +29% associates 2 548 1 821 +40% 394 320 +23% Earnings for the period 1 367 1 063 +29% - - - Prior period taxation(iv) 23 - - Earnings after prior period 394 320 +23% taxation 1 390 1 063 +31% 11.5p 9.0p +28% Earnings per share 39.9p 30.0p +33%________________________________________________________________________________ For notes i) to iv) see footnotes on page 2 HIGHLIGHTS • Excluding re-measurements and disposals, total operating profit for the third quarter increased 15% to £633 million and Earnings per share rose by 16%. • E&P volumes for the quarter rose 23%, helped by increased Egypt and Trinidad and Tobago volumes and the start-up of production at Atlantic/ Cromarty (UK) and Dolphin Deep (Trinidad and Tobago). • Completion of £1 billion share buyback programme. • Average UK contracted gas price is expected to be approximately 31 pence per therm for the gas year 2006/2007. • Buzzard is on schedule to produce first oil in the fourth quarter. • Discovery of the Jasmine gas condensate field in the UK central North Sea, with gross estimated recoverable reserves of up to 275 million barrels. This near infrastructure field lends itself to early development. • Play-opening oil discoveries on the Parati and Tupi prospects in the Santos Basin, Brazil. • Acquired operatorship of discovered reserves and exploration acreage in Algeria. • Purchased the 170MW, gas-fired, Dighton power plant located in Massachusetts, USA. i) 2005 comparatives have been restated on the application of IFRIC 4and amendments to IAS 39. See Note 1, page 19. ii) 'Business Performance' excludes disposals and certain re-measurementsas exclusion of these items provides a clear and consistent presentation of theunderlying operating performance of the Group's ongoing business. For furtherexplanation of Business Performance and the presentation of results from jointventures and associates, see Presentation of Non-GAAP measures, page 11 andResults Presentation, page 3. Unless otherwise stated, the results discussed inthis release relate to BG Group's Business Performance. iii) Prior period taxation is as a result of the increase in North Seataxation and includes an additional charge of £38 million in respect of therestatement of deferred tax balances at 1 January 2006. iv) In addition to (iii) above, prior period taxation includes a £61million credit relating to the impact of the increase in North Sea taxation onre-measurement balances. RESULTS PRESENTATION The presentation of BG Group's results under IFRS separately identifies theeffect of: • The re-measurement of certain financial instruments. • Profits and losses on the disposal and associated impairment of non-current assets and businesses. These items are excluded from Business Performance in order to provide readerswith a clear and consistent presentation of the underlying operating performanceof the Group's ongoing businesses. Under IFRS the results of joint ventures and associates are presented net offinance costs and tax (see pages 13 and 14). Given the relevance of thesebusinesses within BG Group, the results of joint ventures and associates arepresented both before interest and tax, and after tax. The pre-interest and taxresult is included in Business Performance discussed on pages 4 to 10. The tablebelow sets out the amounts related to joint ventures and associates,re-measurements under IAS 39 and profits on disposal and impairment ofnon-current assets and businesses. ________________________________________________________________________________ Third Quarter Business Disposals Total Performance and re- Result measurements(i) 2006 2005 2006 2005 2006 2005 £m £m £m £m £m £mOperating profitbefore shareof results from joint ventures andassociates 581 491 104 21 685 512 Pre-tax share ofoperatingresults of joint ventures andassociates 52 60 - - 52 60 __________________________________________________________ Total operating profit 633 551 104 21 737 572 Net finance costsFinance income 25 21 1 6 26 27Finance costs (21) (24) (1) (5) (22) (29)Share of joint ventures andassociates (17) (11) - - (17) (11) __________________________________________________________ (13) (14) - 1 (13) (13)TaxationTaxation (265) (207) (52) (11) (317) (218)Share of joint ventures andassociates (1) (8) - - (1) (8) __________________________________________________________ (266) (215) (52) (11) (318) (226) __________________________________________________________ Profit for the period 354 322 52 11 406 333 __________________________________________________________ Profit attributableto:Shareholders (earnings) 342 307 52 13 394 320Minority interest 12 15 - (2) 12 13 __________________________________________________________ 354 322 52 11 406 333________________________________________________________________________________ i) Re-measurements excluded from Business Performance The IAS 39 re-measurements reflect movements in external market prices andexchange rates. Financial instruments include certain long-term UK gas contractswhich are classified as derivatives under IAS 39 due to the nature of thecontract terms and are therefore required to be marked-to-market. This treatmenthas no impact on the ongoing cashflows of the business and these unrealisedmark-to-market movements are best presented separately from underlying businessperformance. For an explanation of Non-GAAP measures see page 11. BUSINESS REVIEW The results discussed in this Business Review (pages 4 to 10) relate to BGGroup's performance excluding disposals and re-measurements. For the impact anda description of these items, see the consolidated income statements (pages 13and 14) and Note 2 of the accounts (page 20). Results at constant US$/UK£exchange rates and upstream prices are also quoted. See Presentation of Non-GAAPmeasures (page 11) for an explanation of these metrics. GROUP ________________________________________________________________________________ Business Performance Third Quarter 2006 2005 £m £m Revenue and other operating income 1 647 1 339 +23% Total operating profit including share of pre-taxresults from joint ventures and associates ________ _______ Exploration and Production 509 419 +21%Liquefied Natural Gas 65 54 +20%Transmission and Distribution 56 64 -13%Power Generation 16 21 -24%Other activities (13) (7) +86% ________ _______ 633 551 +15% Net finance costs (13) (14) -7%Taxation (266) (215) +24%Earnings 342 307 +11%Earnings per share 10.0p 8.6p +16% Capital investment 511 457 +12%________________________________________________________________________________ Third quarter Revenue and other operating income increased 23% to £1 647 million. Thisreflected a £182 million increase in E&P and a £162 million increase in LNG. Total operating profit increased by 15% to £633 million reflecting the step-upin E&P production, strong growth in the LNG business and at Comgas, partiallyoffset by an increase in exploration costs and the deconsolidation of MetroGAS. At constant US$/UK£ exchange rates and upstream prices, total operating profitincreased by 9%. Net finance costs were £1 million lower and included interest receivable of £7million in respect of taxation. The effective tax rate (including the BG Groupshare of tax attributable to joint ventures and associates) was approximately44% for the nine months (prior year 40%). This includes the impact in thecurrent year of the increase in North Sea taxation but excludes the effect of aone-off charge of £38 million to restate deferred tax balances at 1 January 2006. Earnings increased by 11% to £342 million. Cash generated by operations increased by £32 million to £730 million, primarilydue to higher operating profit. Capital investment in the quarter of £511 million comprised continuinginvestment in Europe and Central Asia (£157 million), Mediterranean Basin andAfrica (£85 million), North America and the Caribbean (£198 million), SouthAmerica (£40 million) and Asia Pacific (£31 million). As at 30 September 2006, the Group had completed the share repurchase programmeannounced in November 2005, purchasing 149 million shares at an average price of£6.71 per share, returning £1 billion to shareholders. At the end of the quarter, net borrowings were £358 million and the Group's gearing ratio was 5.3%. EXPLORATION AND PRODUCTION ________________________________________________________________________________ Business Performance Third Quarter 2006 2005 £m £m Production volumes (mmboe) 50.6(i) 41.2 +23% Revenue and other operating income 870 688 +26% Total operating profit 509 419 +21% Capital investment 297 207 +43% (i) Includes fuel gas for the quarter of 0.98 mmboe Additional operating and financial data are given on page 29.________________________________________________________________________________ Third quarter E&P total operating profit increased by 21% to £509 million principally due tohigher production volumes, partially offset by higher exploration costs. Production volumes increased by 23%, driven by West Delta Deep Marine (Egypt)and the Dolphin field (Trinidad and Tobago), following the continued build-up ofproduction at Egyptian LNG Trains 1 and 2 and Atlantic LNG Train 4. The start-upof the Dolphin Deep field (Trinidad and Tobago) and the ramp-up of Atlantic/Cromarty (UK) fields in the quarter also contributed to the increase in volumes. Unit operating expenditure at £2.36 ($4.39) per boe was down 20 pence (18 cents)per barrel of oil equivalent principally due to a higher proportion ofproduction coming from lower cost fields. The exploration charge of £86 million is £44 million higher than 2005 reflectingthe increased exploration activities across the Group. For the UK gas year starting 1 October 2006, BG Group expects to realise anaverage contracted price of approximately 31 pence per therm on North Sea gasproduction. This compares to 26 pence per therm in the prior gas year. Capital investment of £297 million included expenditure in the UK (£94 million),Egypt (£40 million), Kazakhstan (£26 million), Trinidad and Tobago (£25million), India (£24 million) and Tunisia (£24 million). Third quarter business highlights In Trinidad and Tobago, on 29 September, BG Group completed the NCMA 3a project(BG Group 45.88%), feeding Atlantic LNG Trains 2, 3 and 4. Negotiations forfurther ECMA (BG Group 50%) domestic gas sales of 220 mmscfd are ongoing, withan agreement expected to be finalised before year-end. Following expiry of itsexploration licence, BG Group signed a new Central Block (BG Group 65%) E&Plicence in September and exploration drilling commenced on the Block with thespudding of the Baraka East-1 well. On 1 September, BG Group announced the discovery of a gas condensate field,Jasmine, in the central North Sea. The discovery straddles Blocks 30/6 and 30/7a(BG Group 30.5%). BG Group estimates gross recoverable reserves to be between100 and 275 million barrels. This near infrastructure field lends itself toearly development. During the quarter, BG Group and partners made two oil discoveries in the SantosBasin, Brazil. The first well was drilled in Block BMS-10 (BG Group 25%) on theParati prospect, and the second well in Block BMS-11 (BG Group 25%) discoveringthe more significant Tupi field. BG Group has interests in four large blocks inthis new Santos Basin pre-salt play. In August, BG Group entered Algeria, acquiring a 36.75% interest andoperatorship of the onshore Hassi Ba Hamou Perimeter, consisting of the Hassi BaHamou gas discovery and five blocks covering approximately 18 380 sq km. Since May 2006, BG Group and its partners have been engaged in negotiations withthe Government of Bolivia regarding the contracts governing investment in, andoperation of, hydrocarbon assets in Bolivia. On 28 October 2006, BG Group signednew contracts with the Government of Bolivia. These contracts are required to beratified by the national congress. LIQUEFIED NATURAL GAS ________________________________________________________________________________ Business Performance Third Quarter 2006 2005 £m £m Revenue and other operating income 566 404 +40% Total operating profit _________________ Shipping and marketing 58 31 +87%Liquefaction 25 30 -17%Business development and other (18) (7) +157% _________________ 65 54 +20% Capital investment 178 207 -14% Additional operating and financial data are given on page 29.________________________________________________________________________________ Third quarter LNG total operating profit increased by £11 million to £65 million reflectinghigher volumes in the shipping and marketing business, partially offset byincreased business development costs. In shipping and marketing, total operating profit increased by £27 million to£58 million reflecting an increase in long-term contract supply, and theoptimisation of that supply through global diversions and downstream marketing,underscoring the value of the Group's marketing capability and flexibleportfolio BG Group's share of operating profit from liquefaction activities decreased by£5 million to £25 million, principally due to more profit being recognised inthe E&P segment as the contract at Egyptian LNG Train 1 entered its commercialphase. Increased business development and other costs reflects the development ofliquefaction, supply and regasification opportunities across the portfolio. Capital investment includes £69 million in relation to three LNG vesselsdelivered this year and four due for delivery in 2007, £40 million investment inAtlantic LNG and £43 million in relation to the Lake Charles Phase 2 expansion. Third quarter business highlights In August, BG Group took delivery of the 145 000m3 LNG carrier, the MethaneLydon Volney. On 29 September, BG Group signed the Project Development Agreement (PDA) for theconstruction and supply of a 2.5 mtpa LNG regasification terminal at QuinteroBay, Chile. The PDA sets out the framework for negotiating fully-termedcontracts. TRANSMISSION AND DISTRIBUTION ________________________________________________________________________________ Business Performance Third Quarter 2006 2005 £m £m Revenue and other operating income ________ _______ Comgas 193 141 +37%MetroGAS - 53 -Other 31 30 +3% ________ _______ 224 224 -Total operating profit ________ _______Comgas 49 43 +14%MetroGAS - 11 -Other 7 10 -30% ________ _______ 56 64 -13% Capital investment 32 39 -18%________________________________________________________________________________ Third quarter T&D total operating profit of £56 million was £8 million lower than 2005.Excluding the results of MetroGAS in 2005, total operating profit increased by£3 million. At Comgas, in Brazil, operating profit increased by £6 million to £49 million,primarily due to a 12% increase in volumes and a favourable Brazilian Realexchange rate. Operating profit includes the net cost (£3 million) of passingback to customers the reduced gas costs experienced in earlier periods. Afurther £11 million is expected to be passed back in future periods. Capital investment mainly represents the development of the Comgas pipelinenetwork. Third quarter business highlights On 2 October, Interconnector (UK) Ltd (BG Group 25%) completed its second phaseenhancement of reverse flow capacity two months early. The Interconnector nowoffers flexibility for shippers to nominate up to 20 billion cubic metres of gasper annum (bcma) in UK export mode and/or up to 23.5 bcma in UK import mode. POWER GENERATION ________________________________________________________________________________ Business Performance Third Quarter 2006 2005 £m £m Revenue and other operating income 42 47 -11% Total operating profit 16 21 -24% Capital investment 3 - -________________________________________________________________________________ Third quarter Operating profit of £16 million was £5 million lower than the same period lastyear, principally due to maintenance activity at Premier Power in NorthernIreland. Third quarter business highlights On 1 October, BG Group purchased the 170MW, gas-fired, Dighton power plantlocated in Bristol County, Massachusetts, USA for $90.2 million. ________________________________________________________________________________ Presentation of Non-GAAP measures Business Performance 'Business Performance' excludes certain disposals and re-measurements (seebelow) as exclusion of these items provides a clear and consistent presentationof the underlying operating performance of the Group's ongoing business. BG Group uses commodity instruments to manage price exposures associated withits marketing and optimisation activity in the UK and US. This activity enablesthe Group to take advantage of commodity price movements. It is considered moreappropriate to include both unrealised and realised gains and losses arisingfrom the mark-to-market of derivatives associated with this activity in'Business Performance'. Disposals and re-measurements BG Group's commercial arrangements for marketing gas include the use oflong-term gas sales contracts. Whilst the activity surrounding these contractsinvolves the physical delivery of gas, certain UK gas sales contracts areclassified as derivatives under the rules of IAS 39 and are required to bemeasured at fair value at the balance sheet date. Unrealised gains and losses onthese contracts reflect the comparison between current market gas prices and theactual prices to be realised under the gas sales contract. BG Group also uses commodity instruments to manage certain price exposures inrespect of optimising the timing of its gas sales associated with contracted UKstorage and pipeline capacity. These instruments are also required to bemeasured at fair value at the balance sheet date under IAS 39. However, IAS 39does not allow the matching of these fair values to the economically hedgedvalue of the related gas in storage (taking account of gas prices based on theforward curve or expected delivery destination and the associated storage andcapacity costs). BG Group also uses financial instruments, including derivatives, to manageforeign exchange and interest rate exposure. These instruments are required tobe recognised at fair value or amortised cost on the balance sheet in accordancewith IAS 39. Most of these instruments have been designated either as hedges offoreign exchange movements associated with the Group's net investments inforeign operations, or as hedges of interest rate risk. Where these instrumentscannot be designated as hedges under IAS 39, unrealised movements in fair valueare recorded in the income statement. Unrealised gains and losses in respect of long-term gas sales contracts andderivatives associated with gas in UK storage and pipeline facilities andinterest rate and foreign exchange exposure in respect of financial instrumentswhich cannot be designated as hedges under IAS 39 are disclosed separately as'disposals and re-measurements'. Realised gains and losses relating to theseinstruments are included in Business Performance. This presentation bestreflects the underlying performance of the business since it distinguishesbetween the temporary timing differences associated with re-measurements underIAS 39 rules and actual realised gains and losses. BG Group has also separately identified profits and losses associated with thedisposal of non-current assets as they are items which require separatedisclosure in order to provide a clearer understanding of the results for theperiod. For a reconciliation between the overall results and Business Performance anddetails of disposals and re-measurements, see the consolidated incomestatements, pages 13 and 14 and Note 2 to the accounts, page 20. Joint ventures and associates Under IFRS the results from jointly controlled entities (joint ventures) andassociates, accounted for under the equity method, are required to be presentednet of finance costs and tax on the face of the income statement. Given therelevance of these businesses within BG Group, the results of joint ventures andassociates are presented before interest and tax, and after tax. This approachprovides additional information on the source of BG Group's operating profits.For a reconciliation between operating profit and earnings including andexcluding the results of joint ventures and associates, see Note 3 to theaccounts, page 21. Exchange rates and prices BG Group also discloses certain information, as indicated, at constant US$/UK£exchange rates and upstream prices. The presentation of results in this manneris intended to provide additional information to explain further the underlyingtrends in the business. Net borrowings/funds BG Group provides a reconciliation of net borrowings/funds and an analysis ofthe amounts included within net borrowings/funds as this is an importantliquidity measure for the Group.________________________________________________________________________________ ________________________________________________________________________________ LEGAL NOTICE These results include "forward-looking information" within the meaning ofSection 27A of the US Securities Act of 1933, as amended and Section 21E of theUS Securities Exchange Act of 1934, as amended. Certain statements included inthese results, including without limitation, those concerning (i) strategies,outlook and growth opportunities, (ii) positioning to deliver future plans andto realise potential for growth, (iii) delivery of the performance required toachieve the revised 2006 targets and growth programme, (iv) development of newmarkets, (v) the development and commencement of commercial operations of newprojects, (vi) liquidity and capital resources, (vii) plans for capital andinvestment expenditure and (viii) statements preceded by "expected","scheduled", "targeted", "planned", "proposed", "intended" or similarstatements, contain certain forward-looking statements concerning operations,economic performance and financial condition. Although the Company believes thatthe expectations reflected in such forward-looking statements are reasonable, noassurance can be given that such expectations will prove to have been correct.Accordingly, results could differ materially from those set out in theforward-looking statements as a result of, among other factors, (i) changes ineconomic, market and competitive conditions, including oil and gas prices, (ii)success in implementing business and operating initiatives, (iii) changes in theregulatory environment and other government actions, including UK andinternational corporation tax rates, (iv) a major recession or significantupheaval in the major markets in which BG Group operates, (v) the failure toensure the safe operation of assets worldwide, (vi) implementation risk, beingthe challenges associated with delivering capital intensive projects on time andon budget, including the need to retain and motivate staff, (vii) commodityrisk, being the risk of a significant fluctuation in oil and/or gas prices fromthose assumed, (viii) fluctuations in exchange rates, in particular the US$/UK£exchange rate being significantly different to that assumed, (ix) risksencountered in the gas and oil exploration and production sector in general, (x)business risk management and (xi) the Risk Factors included in BG Group's AnnualReport and Accounts 2005. BG Group undertakes no obligation to update anyforward-looking statements. No part of these results constitutes or shall be taken to constitute aninvitation or inducement to invest in BG Group plc or any other entity and mustnot be relied upon in any way in connection with any investment decision. Cautionary note to US investors The United States Securities and Exchange Commission (SEC) permits oil and gascompanies, in their filings with the SEC, to disclose only proved reserves thata company has demonstrated by actual production or conclusive formation tests tobe economically and legally producible under existing economic and operatingconditions. We use certain terms in this presentation such as "estimatedrecoverable reserves" and "discovered reserves" that the SEC's guidelinesstrictly prohibit us from including in filings with the SEC. US investors areurged to consider closely the disclosure in our Form 20-F, File No. 1-09337,available from us at BG Group, 100 Thames Valley Park Drive, Reading RG6 1PT,Attention: Company Secretary. You may read and copy this information at theSEC's public reference room, located at 100F Street NE., Room 1580 Washington,D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on thepublic reference room. This filing is also available at the internet websitemaintained by SEC at http://www.sec.gov.________________________________________________________________________________ CONSOLIDATED INCOME STATEMENT THIRD QUARTER _____________________________________________________ 2006 2005 restated(i) Disposals Disposals Busi- and re Busi- and re- ness measure- ness measure Perfor- ments Perfor- -ments mance (Note 2) Total mance (Note 2) Total (ii) (ii) Result (ii) (ii) Result Notes £m £m £m £m £m £m Group revenue 1 621 - 1 621 1 352 - 1 352Other operating income 2 26 104 130 (13) 21 8 _____________________________________________________Group revenue andother operating income 3 1 647 104 1 751 1 339 21 1 360Operating costs (1 066) - (1 066) (848) - (848)Profits and losseson disposal of non-current assets 2 - - - - - - _____________________________________________________ Operating profit/(loss) before share of results from joint ventures and associates 3 581 104 685 491 21 512 _____________________________________________________ Finance income 2, 4 25 1 26 21 6 27Finance costs 2, 4 (21) (1) (22) (24) (5) (29)Share of post-taxresults from joint ventures and associates 3 34 - 34 41 - 41 _____________________________________________________ Profit/(loss) before tax 619 104 723 529 22 551Taxation 2, 5 (265) (52) (317) (207) (11) (218) _____________________________________________________ Profit for the period 354 52 406 322 11 333 _____________________________________________________ Attributable to: _____________________________________________________ BG Groupshareholders (earnings) 342 52 394 307 13 320Minority interest 12 - 12 15 (2) 13 _____________________________________________________ 354 52 406 322 11 333 _____________________________________________________ Earnings per share- basic 6 10.0p 1.5p 11.5p 8.6p 0.4p 9.0p Earnings per share- diluted 6 9.8p 1.5p 11.3p 8.6p 0.4p 9.0p _____________________________________________________ ________________________________________________________________________________ Total operatingprofit including share of pre-tax operating results from joint ventures and associates(iii) 3 633 104 737 551 21 572________________________________________________________________________________ i) 2005 comparatives have been restated on the application of IFRIC 4 andamendments to IAS 39. See Note 1, page 19. ii) See Presentation of Non-GAAP measures, page 11, for an explanation ofresults excluding disposals and re-measurements and presentation of the resultsof joint ventures and associates. iii) This measurement is shown by BG Group as it is used as a means of measuringthe underlying performance of the business. CONSOLIDATED INCOME STATEMENT NINE MONTHS _____________________________________________________ 2006 2005 restated(i) Disposals Disposals Busi- and re Busi- and re- ness measure- ness measure Perfor- ments Perfor- -ments mance (Note 2) Total mance (Note 2) Total (ii) (ii) Result (ii) (ii) Result Notes £m £m £m £m £m £m Group revenue 5 305 - 5 305 3 556 - 3 556 Other operatingincome 2 68 213 281 10 (137) (127) _____________________________________________________ Group revenueand otheroperating income 3 5 373 213 5 586 3 566 (137) 3 429Operating costs (3 208) - (3 208)(2 205) - (2 205) Profits and losses on disposal ofnon-currentassets 2 - (8) (8) - 429 429 _____________________________________________________ Operatingprofit/(loss)before shareof resultsfrom jointventures and associates 3 2 165 205 2 370 1 361 292 1 653Finance income 2, 4 82 8 90 51 35 86 Finance costs 2, 4 (57) (9) (66) (70) (24) (94) Share of post-taxresults fromjoint ventures and associates 3 101 - 101 118 - 118 _____________________________________________________ Profit/(loss) before tax 2 291 204 2 495 1 460 303 1 763Taxation 2,5 (1 025) (45) (1 070) (572) (85) (657) _____________________________________________________ Profit/ (loss) for the period 1 266 159 1 425 888 218 1 106 _____________________________________________________ Attributable to: BG Groupshareholders(earnings) 1 230 160 1 390 851 212 1 063 Minorityinterest 36 (1) 35 37 6 43 _____________________________________________________ 1 266 159 1 425 888 218 1 106 _____________________________________________________ Earnings pershare - basic 6 35.3p 4.6p 39.9p 24.0p 6.0p 30.0p Earnings pershare - diluted 6 35.1p 4.5p 39.6p 23.9p 6.0p 29.9p _____________________________________________________ ________________________________________________________________________________ Total operatingprofit includingshare of pre-taxoperating results from joint venturesand associates (iii) 3 2 343 205 2 548 1 529 292 1 821________________________________________________________________________________ i) 2005 comparatives have been restated on the application of IFRIC 4 andamendments to IAS 39. See Note 1, page 19. ii) See Presentation of Non-GAAP measures, page 11, for an explanation ofresults excluding disposals and re-measurements and presentation of the resultsof joint ventures and associates. iii) This measurement is shown by BG Group as it is used as a means of measuringthe underlying performance of the business. CONSOLIDATED BALANCE SHEET As at 30 Sept 31 Dec 30 Sept 2006 2005 2005 restated restated £m £m £mAssets Non-current assets Goodwill 331 342 349Other intangible assets 815 682 712Property, plant and equipment 5 927 5 830 5 662Investments 1 113 1 129 1 100Deferred tax assets 97 91 83Trade and other receivables 44 52 54Derivative financial instruments 138 84 115________________________________________________________________________________ 8 465 8 210 8 075 Current assets Inventories 206 185 144Trade and other receivables 1 565 1 674 1 243Commodity contracts and other derivativefinancial instruments 81 10 16Cash and cash equivalents 1 191 1 516 1 335________________________________________________________________________________ 3 043 3 385 2 738 Assets classified as held for sale - 10 -________________________________________________________________________________ Total assets 11 508 11 605 10 813________________________________________________________________________________ Liabilities Current liabilities Borrowings (77) (81) (341)Trade and other payables (1 283) (1 308) (1 031)Current tax liabilities (386) (409) (340)Commodity contracts and other derivativefinancial instruments (453) (711) (619)________________________________________________________________________________ (2 199) (2 509) (2 331) Non-current liabilities Borrowings (1 592) (1 497) (1 454)Trade and other payables (15) (68) (85)Derivative financial instruments (1) (2) (1)Deferred income tax liabilities (1 011) (733) (805)Retirement benefit obligations (160) (154) (152)Provisions for other liabilities and charges (357) (372) (355)________________________________________________________________________________ (3 136) (2 826) (2 852) Liabilities associated with assets classifiedas held for sale - (3) -________________________________________________________________________________ Total liabilities (5 335) (5 338) (5 183)________________________________________________________________________________ Net assets 6 173 6 267 5 630________________________________________________________________________________ Attributable to: BG Group equity shareholders 6 063 6 169 5 582Minority interest 110 98 48________________________________________________________________________________ Total equity 6 173 6 267 5 630________________________________________________________________________________ STATEMENT OF CHANGES IN EQUITY Third Quarter Nine Months 2006 2005 2006 2005 restated restated £m £m £m £m Equity as at start of period 6 266 5 185 BG Group shareholders' funds 6 182 4 567 102 43 Minority interest 98 20________________________________________________________________________________ Equity as at start of period as 6 368 5 228 reported 6 280 4 587 Effect of adoption of IFRIC 4 (see - - Note 1) (13) (8) - - Effect of adoption of IAS 39(i) - (238)________________________________________________________________________________ Equity as at start of period as 6 368 5 228 restated 6 267 4 341 406 333 Profit for the financial period 1 425 1 106 4 14 Issue of shares 13 28 (357) (2) Purchase of own shares (ii) (949) (4) Adjustment in respect of employee (7) 3 share schemes 1 11 (4) - Tax in respect of share schemes 9 - (103) (68) Dividends on ordinary shares (247) (142) (1) (9) Dividends paid to minority interest (18) (23) Currency translation and hedge (133) 131 adjustments net of tax (328) 313________________________________________________________________________________ Net changes in equity for the (195) 402 financial period (94) 1 289 Equity as at 30 September 6 063 5 582 BG Group shareholders' funds 6 063 5 582 110 48 Minority interest 110 48________________________________________________________________________________ 6 173 5 630 6 173 5 630________________________________________________________________________________ i) BG Group adopted IAS 39 from 1 January 2005. ii) 2006 includes £2 million of transaction costs in the quarter and £5 million in the nine months. CONSOLIDATED CASH FLOW STATEMENT Third Quarter Nine Months 2006 2005 2006 2005 restated restated £m £m £m £m Cash flows from operating activities 723 551 Profit before taxation 2 495 1 763 Share of post-tax results from joint (34) (41) ventures and associates (101) (118) Depreciation of property, plant and equipment and amortisation of intangible 150 119 assets 448 357 Fair value movements in commodity (93) (21) contracts (226) 137 Profit and losses on disposal of - - non-current assets and impairments 8 (429) Unsuccessful exploration expenditure 48 11 written off 77 32 (7) (13) (Decrease)/increase in provisions - - (26) (27) Finance income (90) (86) 22 29 Finance costs 66 94 7 3 Share-based payments 18 11 (60) 87 (Increase)/decrease in working capital (139) 39________________________________________________________________________________ 730 698 Cash generated by operations 2 556 1 800 (269) (229) Income taxes paid (752) (543)________________________________________________________________________________ 461 469 Net cash inflow from operating activities 1 804 1 257________________________________________________________________________________ Cash flows from investing activities Dividends received from joint ventures 34 22 and associates 127 60 Proceeds from disposal of subsidiary - - undertakings and investments 5 26 Proceeds from disposal of property, plant - 13 and equipment and intangible assets - 949 Purchase of property, plant and equipment (311) (365) and intangible assets (910) (893) Loans (to)/from joint ventures and (49) 60 associates (53) 6 Purchase of subsidiary undertakings and (18) (1) investments(i) (20) (13)________________________________________________________________________________ Net cash (outflow)/inflow from investing (344) (271) activities (851) 135________________________________________________________________________________ Cash flows from financing activities 3 (6) Net interest received/(paid)(ii) 5 (28) (100) (68) Dividends paid (243) (142) (1) (9) Dividends paid to minority (18) (23) 47 111 Net proceeds from issue of new borrowings 105 (256) (60) (138) Repayment of borrowings (141) (513) 5 14 Issue of shares 13 28 - - Issue of shares to minority shareholder 1 - (365) (2) Purchase of own shares (958) (4) Net cash (outflow)/inflow from financing (471) (98) activities (1 236) (426)________________________________________________________________________________ Net increase/(decrease) in cash and cash (354) 100 equivalents (283) 966 Cash and cash equivalents at beginning of 1 567 1 223 period 1 516 340 (22) 12 Effect of foreign exchange rate changes (42) 29________________________________________________________________________________ Cash and cash equivalents at end of 1 191 1 335 period(iii) 1 191 1 335________________________________________________________________________________ i) Includes cash acquired of nil (2005 £18 million) on the purchase of a subsidiary undertaking. ii) Includes capitalised interest for the third quarter of £12 million (2005 £9 million), and for the nine months of £43 million (2005 £19 million). iii) Cash and cash equivalents comprise cash and short-term liquid investments that are readily convertible to cash. RECONCILIATION OF NET BORROWINGS/FUNDS(i) - NINE MONTHS £mNet funds as at 31 December 2005 as reported 253Adoption of IFRIC 4 (See Note 1) (283)________________________________________________________________________________ Net borrowings as at 31 December 2005 restated(i) (ii) (30) Net decrease in cash and cash equivalents (283)Cash outflow from changes in gross borrowings 36Inception of finance leases (199)Foreign exchange and other re-measurements 118________________________________________________________________________________ Net borrowings as at 30 September 2006(i) (ii) (358)________________________________________________________________________________ Net borrowings attributable to Comgas were £210 million (31 December 2005 £189million). As at 30 September 2006, BG Group's share of the net borrowings in jointventures and associates amounted to approximately £1 billion, including BG Groupshareholder loans of approximately £0.6 billion. These net borrowings are included in BG Group's share of the netassets in joint ventures and associates which are consolidated in BG Group'saccounts. i) Net borrowings/funds are defined on page 31. ii) Net borrowings/funds comprise: As at 30 Sept 31 Dec 2006 2005 £m £mAmounts receivable/(due) within one yearCash and cash equivalents 1 191 1 516Overdrafts, loans and finance leases (77) (81)Derivative financial instruments(iii) (17) (50)________________________________________________________________________________ 1 097 1 385Amounts receivable/(due) after more than one yearLoans and finance leases (1 592) (1 497)Derivative financial instruments 137 82________________________________________________________________________________ (1 455) (1 415)________________________________________________________________________________ Net borrowings (358) (30)________________________________________________________________________________ iii) These items are included within commodity contracts and other derivativefinancial instrument balances on the balance sheet. Notes 1. Basis of preparation These primary statements are the unaudited interim consolidated financialstatements of BG Group plc for both the quarter ended and the nine months ended30 September 2006. The financial information does not comprise statutoryaccounts within the meaning of Section 240 of the Companies Act 1985, and shouldbe read in conjunction with the Annual Report and Accounts for the year ended31 December 2005, as they provide an update of previously reported information. The preparation of the interim financial statements requires management to makeestimates and assumptions that affect the reported amount of revenues, expenses,assets and liabilities at the date of the interim financial statements. If inthe future such estimates and assumptions, which are based on management's bestjudgment at the date of the interim financial statements, deviate from theactual circumstances, the original estimates and assumptions will be modified asappropriate in the year in which the circumstances change. IFRIC Interpretation 4 'Determining whether an Arrangement contains a Lease' IFRIC 4 requires companies to determine whether they have any arrangements whichare or contain leases based on an assessment of whether specific assets arerequired to fulfil each arrangement or whether each arrangement conveys a rightof use of the asset. If an arrangement contains a lease, the requirements ofIAS 17, 'Leases', should be applied to the lease element of the arrangement. BG Group has applied IFRIC 4 from 1 January 2006 and has concluded that thecontract for the provision of capacity at Lake Charles contains a financelease. Comparative information has been amended to reflect this arrangement.As at 1 January 2006, borrowings have increased by £283 million, property, plant and equipment has increased by £263 million,deferred tax assets have increased by £7 million and retained earnings havedecreased by £13 million to reflect this arrangement; comparative informationhas also been restated. The effect of this restatement on 2005 operating profitis a £3 million increase in the quarter and a £7 million increase in the ninemonths and an increase in finance costs of £4 million in the quarter and £10million in the nine months. The tax effect was a £1 million decrease in the ninemonths, resulting in a £1 million decrease in earnings in the quarter and a £2million decrease in the nine months. IAS 39 'Financial Guarantee Contracts and Credit Insurance' In August 2005, the IASB issued an amendment to IAS 39 which covers theaccounting required for financial guarantee contracts that provide payment to bemade if a debtor fails to make a payment when due. These contracts should beinitially measured at fair value and subsequently re-measured using the higherof the provision set out in IAS 37 'Provisions, Contingent Liabilities andContingent Assets' or the initial amount less cumulative amortisation inaccordance with IAS 18, 'Revenue'. This amendment is mandatory for periodsbeginning on or after 1 January 2006 and BG Group has adopted it from that date.As at 1 January 2006, investments have been increased by £5 million andprovisions for other liabilities and charges have been increased by £5 million;comparative information has also been restated. The effect of this restatementon operating profit is nil for both quarter and nine months. There is a decreaseof £1 million in finance costs and a £1 million decrease to the pre-tax share ofoperating results of joint ventures and associates in the nine months, nileffect in the quarter. 2. Disposals and re-measurements Third Quarter Nine Months 2006 2005 2006 2005 £m £m £m £m Revenue and other operating income - 104 21 re-measurements of commodity contracts 213 (137) Profits and losses on disposal of non-current - - assets (8) 429 Finance costs - re-measurements of financial - 1 instruments (1) 11 (52) (11) Taxation (45) (85) - 2 Minority interest 1 (6)________________________________________________________________________________ 52 13 Impact on earnings 160 212________________________________________________________________________________ Third quarter and nine months: Revenue and other operating income Re-measurements included within revenue and other operating income amount to acredit of £104 million for the quarter (2005 £21 million), of which £98 million(2005 £25 million) represents non-cash mark-to-market movements on certain long-term UK gas contracts. For the nine months, £213 million of re-measurements areincluded within revenue and other operating income, of which £199 millionrepresents non-cash mark-to-market movements on certain long-term UK gascontracts. Whilst the activity surrounding these contracts involves the physicaldelivery of gas, the contracts fall within the scope of IAS 39 and meet thedefinition of a derivative instrument. Net finance costs Re-measurements presented in net finance costs relate primarily to certainderivatives used to hedge foreign exchange and interest rate risk which have notbeen designated as hedges under IAS 39, partly offset by foreign exchangemovements on certain borrowings in a subsidiary. In 2005, re-measurementsincluded the retranslation of MetroGAS US Dollar and Euro borrowings which couldnot be designated as hedges under IAS 39. Following the de-consolidation ofMetroGAS and GASA in December 2005, these companies made no contribution to theresults of BG Group in 2006. 2006 third quarter and nine months: Disposal of non-current assets During the second quarter, BG Group disposed of its telecoms businesses. Thisresulted in a loss on disposal of £8 million. No tax arose on the disposal. 2005 third quarter and nine months: Disposal of non-current assets During the first quarter of 2005, BG Group disposed of its 50% interest inPremier Transmission Limited to Premier Transmission Financing Plc for cashproceeds of £26 million. No tax arose on the disposal. During the second quarter of 2005, BG Group completed the sale of its 16.67%interest in the North Caspian Sea PSA and received net pre-tax proceeds ofapproximately $1.8 billion realising a £416 million pre-tax and £279 million post-tax profit on the sale. 3. Segmental analysis Group revenue Disposals Total Disposals Totaland other Busi- and re Busi- and re-operating ness measure- ness measure income Perfor- ments Perfor- -ments mance mance Third Quarter 2006 2006 2006 2005 2005 2005 £m £m £m £m £m £m Exploration and Production 870 104 974 688 37 725Liquefied Natural Gas 566 - 566 404 (16) 388Transmission andDistribution 224 - 224 224 - 224Power Generation 42 - 42 47 - 47Other activities 2 - 2 4 - 4Less: intra-groupsales (57) - (57) (28) - (28)________________________________________________________________________________ 1 647 104 1 751 1 339 21 1 360________________________________________________________________________________ Group revenue Disposals Total Disposals Totaland other Busi- and re Busi- and re-operating ness measure- ness measure income Perfor- ments Perfor- -ments mance mance Nine Months 2006 2006 2006 2005 2005 2005 £m £m £m £m £m £m Explorationand Production 2 927 213 3 140 1 981 (121) 1 860Liquefied Natural Gas 1 767 - 1 767 860 (16) 844Transmissionand Distribution 651 - 651 589 - 589Power Generation 184 - 184 168 - 168Other activities 7 - 7 10 - 10Less:intra-group sales (163) - (163) (42) - (42)________________________________________________________________________________ 5 373 213 5 586 3 566 (137) 3 429________________________________________________________________________________ 3. Segmental analysis (continued) Business Disposals and Performance re-measurements Total (i) (i)Third Quarter 2006 2005 2006 2005 2006 2005 £m £m £m £m £m £m Total operating profit beforeshare of results from jointventures and associates Exploration and Production 509 419 104 37 613 456Liquefied Natural Gas 40 24 - (16) 40 8Transmission and Distribution 46 54 - - 46 54Power Generation (1) 1 - - (1) 1Other activities (13) (7) - - (13) (7) _________________________________________________ 581 491 104 21 685 512 _________________________________________________ Pre-tax share of operatingresults of joint ventures andassociates(ii) Liquefied Natural Gas 25 30 - - 25 30Transmission and Distribution 10 10 - - 10 10Power Generation 17 20 - - 17 20 _________________________________________________ 52 60 - - 52 60 _________________________________________________ Total operating profitincluding share of results fromjoint ventures and associates Exploration and Production 509 419 104 37 613 456Liquefied Natural Gas 65 54 - (16) 65 38Transmission and Distribution 56 64 - - 56 64Power Generation 16 21 - - 16 21Other activities (13) (7) - - (13) (7) _________________________________________________ 633 551 104 21 737 572 _________________________________________________ For notes i) to ii) see footnotes on page 23 3. Segmental analysis (continued) Business Disposals and Performance re-measurements Total (i) (i)Nine Months 2006 2005 2006 2005 2006 2005 £m £m £m £m £m £mTotal operating profit beforeshare of results from jointventures and associates Exploration and Production 1 882 1 213 213 295 2 095 1 508Liquefied Natural Gas 158 25 - (16) 158 9Transmission and Distribution 146 135 - 13 146 148Power Generation 11 16 - - 11 16Other activities (32) (28) (8) - (40) (28) _________________________________________________ 2 165 1 361 205 292 2 370 1 653 _________________________________________________ Pre-tax share of operatingresults of joint ventures andassociates(ii) Liquefied Natural Gas 79 75 - - 79 75Transmission and Distribution 32 31 - - 32 31Power Generation 67 62 - - 67 62 _________________________________________________ 178 168 - - 178 168 _________________________________________________ Total operating profitincluding share of results fromjoint ventures and associates Exploration and Production 1 882 1 213 213 295 2 095 1 508Liquefied Natural Gas 237 100 - (16) 237 84Transmission and Distribution 178 166 - 13 178 179Power Generation 78 78 - - 78 78Other activities (32) (28) (8) - (40) (28) _________________________________________________ 2 343 1 529 205 292 2 548 1 821 _________________________________________________ i) Business Performance excludes certain disposals and re-measurements. See Note 2, page 20 and Presentation of Non-GAAP measures, page 11. ii) Share of results in joint ventures and associates in the table above is before finance costs and taxation. The share of results after finance costs and taxation for the quarter is £34 million (2005 £41 million), and for the nine months is £101 million (2005 £118 million). 3. Segmental analysis (continued) Total Result Operating profit before Share of results in share of results from joint joint ventures and ventures and associates associates Total Result Third Quarter 2006 2005 2006 2005 2006 2005 £m £m £m £m £m £m Exploration and Production 613 456 - - 613 456Liquefied Natural Gas 40 8 17 22 57 30Transmissionand Distribution 46 54 6 6 52 60Power Generation (1) 1 11 13 10 14Other activities (13) (7) - - (13) (7)________________________________________________________________________________ 685 512 34 41 719 553 Net financeincome/(costs) 4 (2) Taxation (317) (218)________________________________________________________________________________ Profit for the period 406 333________________________________________________________________________________ Total Result Operating profit before Share of results in share of results from joint joint ventures and ventures and associates associates Total Result Nine Months 2006 2005 2006 2005 2006 2005 £m £m £m £m £m £m Explorationand Production 2 095 1 508 - - 2 095 1 508LiquefiedNatural Gas 158 9 39 57 197 66TransmissionandDistribution 146 148 19 22 165 170Power Generation 11 16 43 39 54 55Other activities (40) (28) - - (40) (28)________________________________________________________________________________ 2 370 1 653 101 118 2 471 1 771 Net financeincome/ 24 (8)(costs)Taxation (1 070) (657) ________________________________________________________________________________ Profit forthe period 1 425 1 106________________________________________________________________________________ 4. Net finance costs Third Quarter Nine Months 2006 2005 2006 2005 £m £m £m £m (16) (21) Interest payable (47) (58) (13) (9) Interest on obligations under finance leases (43) (22) 12 9 Interest capitalised 43 19 (4) (3) Unwinding of discount on provisions(i) (10) (9) (1) (5) Disposals and re-measurements (Note 2) (9) (24)________________________________________________________________________________ (22) (29) Finance costs (66) (94)________________________________________________________________________________ 25 21 Interest receivable 82 51 1 6 Disposals and re-measurements (Note 2) 8 35________________________________________________________________________________ 26 27 Finance income 90 86________________________________________________________________________________ 4 (2) Net finance income/(costs)(ii) 24 (8)________________________________________________________________________________ i) Relates to the unwinding of the discount on provisions in respect of decommissioning and pension obligations, included in the income statement as a financial item within net finance costs. ii) Excludes Group share of net finance costs from joint ventures and associates for the quarter of £17 million (2005 £11 million), and for the nine months of £51 million (2005 £29 million). 5. Taxation The taxation charge for the quarter before disposals and re-measurements was£265 million (2005 £207 million), and the taxation charge including disposalsand re-measurements was £317 million (2005 £218 million). For the nine months, the taxation charge before disposals and re-measurementswas £1 025 million (2005 £572 million). The taxation charge including disposals and re-measurements was £1 070 million (2005 £657 million). The Group share of taxation from joint ventures and associates for the quarterwas £1 million (2005 £8 million) and for the nine months was £26 million (2005£21 million). 6. Earnings per ordinary share Third Quarter Nine Months 2006 2005 2006 2005________________________________________________________________________________ £m Pence £m Pence £m Pence £m Pence per per per per share share share share________________________________________________________________________________ 394 11.5 320 9.0 Earnings 1 390 39.9 1 063 30.0 Re-measurements (after tax and (52) (1.5) (13) (0.4) minority interest) (168) (4.8) 80 2.3 Profits and losses on disposals - - - - (after tax) 8 0.2 (292) (8.3)________________________________________________________________________________ Earnings - excluding disposals and 342 10.0 307 8.6 re-measurements 1 230 35.3 851 24.0________________________________________________________________________________ Basic earnings per share calculations in 2006 are based on shares in issue of 3424 million for the quarter and 3 481 million for the year to date. The earnings figure used to calculate diluted earnings per ordinary share is thesame as that used to calculate earnings per ordinary share given above, dividedby 3 481 million for the quarter and 3 506 million for the year to date, beingthe weighted average number of ordinary shares in issue during the quarter asadjusted for share options. 7. Results Presentation Nine Months Business Disposals Total Performance and re- Result measurements (i) 2006 2005 2006 2005 2006 2005 £m £m £m £m £m £mOperating profit before disposal of non-current assets 2 165 1 361 213 (137) 2 378 1 224 Profits and losseson disposal of non-currentassets(ii) - - (8) 429 (8) 429 _____________________________________________________________Operating profitbefore share of results from joint ventures andassociates 2 165 1 361 205 292 2 370 1 653 Pre-tax share ofoperating resultsof joint ventures and associates 178 168 - - 178 168 _____________________________________________________________ Total operating profit 2 343 1 529 205 292 2 548 1 821 Net finance costsFinance income 82 51 8 35 90 86Finance costs (57) (70) (9) (24) (66) (94)Share of joint ventures and associates (51) (29) - - (51) (29) _____________________________________________________________ (26) (48) (1) 11 (27) (37)TaxationTaxation (1 025) (572) (45) (85) (1 070) (657) Share of joint ventures and associates (26) (21) - - (26) (21) _____________________________________________________________ (1 051) (593) (45) (85) (1 096) (678) _____________________________________________________________ Profit for theperiod(iii) 1 266 888 159 218 1 425 1 106 _____________________________________________________________ Profit attributableto:Shareholders (earnings) 1 230 851 160 212 1 390 1 063Minority interest 36 37 (1) 6 35 43 _____________________________________________________________ 1 266 888 159 218 1 425 1 106________________________________________________________________________________ i) Re-measurements excluded from Business Performance The IAS 39 re-measurements reflect movements in external market prices and exchange rates. Financial instruments include certain long-term UK gas contracts which are classified as derivatives under IAS 39 due to the nature of the contract terms and are therefore required to be marked-to-market. This treatment has no impact on the ongoing cashflows of the business and these unrealised mark-to-market movements are best presented separately from underlying business performance. For an explanation of Non-GAAP measures see page 11. ii) 2005 includes £416 million on disposal of BG Group's interest in the North Caspian PSA. iii) 2006 includes prior period taxation adjustments following the increase in North Sea taxation. 8. Capital investment: geographical analysis Third Quarter Nine Months 2006 2005 2006 2005 £m £m £m £m 157 112 Europe and Central Asia 370 413 40 46 South America 153 103 31 32 Asia Pacific 84 61 198 223 North America and the Caribbean 479 388 85 44 Mediterranean Basin and Africa 212 222________________________________________________________________________________ 511 457 1 298 1 187________________________________________________________________________________ 9. Quarterly information: earnings and earnings per share 2006 2005 2006 2005 £m £m pence pence First quarter - including disposals and re-measurements 578 259 16.4 7.3 - excluding disposals and re-measurements 563 269 16.0 7.6Second quarter - including disposals and re-measurements 418 484 12.0 13.7 - excluding disposals and re-measurements 325 275 9.3 7.8Third quarter - including disposals and re-measurements 394 320 11.5 9.0 - excluding disposals and re-measurements 342 307 10.0 8.6Fourth quarter - including disposals and re-measurements 462 13.0 - excluding disposals and re-measurements 503 14.2________________________________________________________________________________ Full year - including disposals and re-measurements 1 525 43.1 - excluding disposals and re-measurements 1 354 38.3________________________________________________________________________________ Supplementary information: Operating and financial data Third Quarter Second Nine Months Quarter 2006 2005 2006 2006 2005 Production volumes (mmboe) 4.3 4.6 5.3 - oil 15.2 13.8 6.9 5.8 7.6 - liquids 21.9 21.9 39.4(i) 30.8 42.7 - gas 124.9(i) 93.8__________________________________ _____________________ 50.6 41.2 55.6 - total 162.0 129.5__________________________________ _____________________ Production volumes (boepd in thousands) 47 50 58 - oil 56 50 75 63 84 - liquids 80 80 428 335 468 - gas 457 344__________________________________ _____________________ 550 448 610 - total 593 474__________________________________ _____________________ LNG cargoes 14 8 22 - delivered to Lake Charles 38 25 16 15 14 - delivered to Elba Island 39 36 13 7 13 - re-marketed 55 18__________________________________ _____________________ 43 30 49 - total 132 79__________________________________ _____________________ £38.48 £35.25 £38.71 Average realised oil price per barrel £37.54 £29.50($71.43) ($63.02) ($69.76) ($67.68) ($54.68) £31.00 £26.98 £31.51 Average realised liquids price per barrel £30.42 £20.68($57.56) ($48.23) ($56.79) ($54.84) ($38.32) 25.50p 20.10p 26.20p Average realised UK gas price per produced therm 30.91p 22.72p Average realised International gas price per 16.83p 17.92p 17.05p produced therm 17.41p 15.39p 18.52p 18.42p 19.09p Average realised gas price per produced therm 20.47p 17.56p £1.45 £1.42 £1.21 Lifting costs per boe £1.28 £1.23($2.69) ($2.54) ($2.18) ($2.30) ($2.27) £2.36 £2.56 £2.07 Operating expenditure per boe £2.20 £2.22($4.39) ($4.57) ($3.72) ($3.97) ($4.11) 229 166 160 Development expenditure (£m) 520 495 Gross exploration expenditure (£m) 65 34 66 - capitalised expenditure 267 136 38 31 37 - other expenditure 108 69__________________________________ _____________________ 103 65 103 - gross expenditure 375 205__________________________________ _____________________ i) Includes fuel gas for the third quarter of 0.98 mmboe and 3.20 mmboe for the nine months. Supplementary information: Operating and financial data (continued) BG Group's exposure to the oil price varies according to a number of factorsincluding the mix of production and sales. Management estimates that, otherfactors being constant, a $1.00 rise (or fall) in the Brent price would increase(or decrease) operating profit in 2006 by approximately £40 million to £50 million. BG Group's exposure to the US$/UK£ exchange rate varies according to a number offactors including commodity prices and the timing of US Dollar revenues andcosts including capital expenditure. Management estimates that in 2006, otherfactors being constant, a 10 cent strengthening (or weakening) in the US Dollarwould increase (or decrease) operating profit by approximately £120 million to£140 million. ________________________________________________________________________________ GlossaryIn BG Group's results some or all of the following definitions are used:________________________________________________________________________________ bcf billion cubic feetbcfd billion cubic feet per daybcma billion cubic metres per annumboe barrels of oil equivalentboed barrels of oil equivalent per daybopd barrels of oil per dayCCGT combined cycle gas turbineDCQ daily contracted quantityE&P Exploration and ProductionEPC engineering, procurement and constructionEPIC engineering, procurement, installation and commissioningFEED front end engineering designFERC Federal Energy Regulatory CommissionGearing ratio represents Gearing net borrowings as a percentage of total shareholders' funds ratio (excluding the re-measurement of commodity financial instruments and associated deferred tax) plus net borrowingsGW gigawattIAS 39 International Accounting Standard 39 (Financial Instruments)IFRS International Financial Reporting StandardsLNG Liquefied Natural Gasm millionmmboe million barrels of oil equivalentmmbtu million british thermal unitsmmcfd million cubic feet per daymmcmd million cubic metres per daymmscfd million standard cubic feet per daymmscm million standard cubic metresmmscmd million standard cubic metres per day MoU Memorandum of understandingmtpa million tonnes per annum MW megawattNet Comprise cash, current asset investments, finance leases, currencyborrowings and interest rate derivative financial instruments and short- and/funds long-term borrowingsNGL Natural gas liquidsPSA production sharing agreementT&D Transmission and DistributionTotal Group operating profit plus share of pre-tax operating results ofoperating joint ventures and associatesprofitUKCS United Kingdom Continental ShelfUKCNS United Kingdom central North SeaUnit opex Production Costs and other operating costs (royalties) for the period divided by total net production for that periodUnit Production Costs for the period excluding tariff and insurance costslifting divided by total net production for that periodcosts ________________________________________________________________________________ Enquiries Enquiries relating to BG Group's General enquiries about shareholderresults, business and financial position matters should be made to:should be made to: Investor Relations Department Lloyds TSB RegistrarsBG Group plc The CausewayThames Valley Park Drive WorthingReading West SussexBerkshire BN99 6DARG6 1PT Tel: 0118 929 3025 Tel: 0870 600 3951e-mail: [email protected] e-mail: [email protected] Financial Calendar Announcement of 2006 fourth quarter 8 February 2007results and full year results and annual strategy presentation Announcement of 2007 first quarter 3 May 2007results 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 ExchangeRelated Shares:
BG..L