7th Feb 2008 07:01
BG GROUP plc07 February 2008 Highlights • Earnings per share(i) increased 11% to 52.7p for the full year.• Full year dividend increased by 30% to 9.36p per share.• Total reserves and resource base(ii) increased by 2 billion boe, up 25% to 10 billion boe. BG Group's Chief Executive, Frank Chapman said: "BG Group has delivered another year of good operating performance.We substantially enhanced the scale and diversity of our hydrocarbonresource base, underpinning our long-term growth prospects." Fourth Quarter Full Year 2007 2006 Business Performance(i) 2007 2006 £m £m £m £m 1 006 760 +32% Total operating profit including share 3 248 3 103 +5% of pre-tax operating results from joint ventures and associates 558 410 +36% Earnings for the period 1 783 1 640 +9% 16.6p 12.0p +38% Earnings per share 52.7p 47.4p +11% 5.76p 4.20p +37% Dividend per share 9.36p 7.20p +30% Total results for the period (including disposals, re-measurements and impairments) 797 751 +6% Operating profit before share of 2 848 3 121 -9% results from joint ventures and associates 863 806 +7% Total operating profit including share 3 095 3 354 -8% of pre-tax operating results from joint ventures and associates 486 389 +25% Earnings for the period 1 746 1 779 -2% 14.4p 11.4p +26% Earnings per share 51.6p 51.4p - i) 'Business Performance' excludes disposals, certain re-measurements andimpairments as exclusion of these items provides a clear and consistentpresentation of the underlying operating performance of the Group's ongoingbusiness. For further explanation of Business Performance and the presentationof results from joint ventures and associates, see Presentation of Non-GAAPmeasures, page 10 and Results Presentation, page 2. Unless otherwise stated, theresults discussed in this release relate to BG Group's Business Performance. ii) See page 29 for an explanation of how this is calculated. BG Group has issued its annual strategy update in conjunction withtoday's statement. This is available for viewing at: www.bg-group.com Results Presentation The presentation of BG Group's results under IFRS separately identifies theeffect of: • The re-measurement of certain financial instruments; and • Profits and losses on the disposal and impairment of non-current assets andbusinesses. These items, which are detailed in Note 2 to the accounts, page 19, are excludedfrom Business Performance in order to provide readers with a clear andconsistent presentation of the underlying operating performance of the Group'songoing businesses. The Business Review (pages 3 to 9) relates to Business Performance. (SeePresentation of Non-GAAP measures (page 10) for an explanation of these metrics). Under IFRS the results of joint ventures and associates are presented net offinance costs and tax (see pages 12 and 13). 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 disclosed in Business Performance discussed on pages 3 to 9. The tablebelow sets out the amounts related to joint ventures and associates, certainre-measurements under IAS 39 and profits on disposal and impairment ofnon-current assets and businesses. Fourth quarter Business Disposals, re- Total Result Performance measurements and impairments (i) 2007 2006 2007 2006 2007 2006 £m £m £m £m £m £mOperating profit before disposal of 940 705 (144) 87 796 792 non-current assets Profits and losses on disposal of - - 1 (41) 1 (41) non-current assets and impairments Operating profit before share of results 940 705 (143) 46 797 751 from joint ventures and associates Pre-tax share of operating results of 66 55 - - 66 55 joint ventures and associates Total operating profit 1 006 760 (143) 46 863 806 Net finance costs Finance income 44 22 (4) 15 40 37 Finance costs (36) (23) 7 (13) (29) (36) Share of joint ventures and associates (12) (16) - - (12) (16) (4) (17) 3 2 (1) (15) Taxation Taxation (419) (323) 69 (68) (350) (391) Share of joint ventures and associates (12) (1) - - (12) (1) (431) (324) 69 (68) (362) (392) Profit for the period 571 419 (71) (20) 500 399 Profit attributable to: Shareholders (earnings) 558 410 (72) (21) 486 389 Minority interest 13 9 1 1 14 10 571 419 (71) (20) 500 399 i) See Presentation of Non-GAAP measures, page 10. Business Review Group Fourth Quarter Full Year 2007 2006 Business Performance 2007 2006 £m £m £m £m 2 338 1 897 +23% Revenue and other operating income 8 330 7 270 +15% Total operating profit including share of pre-tax results from joint ventures and associates 763 575 +33% Exploration and Production 2 387 2 457 -3% 163 115 +42% Liquefied Natural Gas 521 352 +48% 60 53 +13% Transmission and Distribution 247 231 +7% 32 28 +14% Power Generation 130 106 +23% (12) (11) +9% Other activities (37) (43) -14%1 006 760 +32% 3 248 3 103 +5% (4) (17) -76% Net finance costs (27) (43) -37% (431) (324) +33% Taxation for the period (1 385) (1 337) +4% 558 410 +36% Earnings for the period 1 783 1 678 +6% - - - Prior period taxation - (38) - 558 410 +36% Earnings after prior period taxation 1 783 1 640 +9% 16.6p 12.0p +38% Earnings per share 52.7p 47.4p +11% 628 548 +15% Capital investment 2 497 1 847 +35% Fourth quarter Revenue and other operating income increased by 23% to £2 338 million,reflecting higher E&P and LNG volumes and prices and the impact of recent powergeneration acquisitions, partially offset by the weaker US$/UK£ exchange rate. Total operating profit increased by 32% to £1 006 million primarily due to E&Pproduction growth of 4%, higher commodity prices and increased LNG income,partially offset by the weaker US$/UK£ exchange rate. Cash generated by operations increased by £199 million to £1 003 million. Capital investment in the quarter of £628 million comprised investment in Europeand Central Asia (£215 million), Mediterranean Basin and Africa (£204 million),South America (£92 million), North America and the Caribbean (£80 million), andAsia Pacific (£37 million). Full year Total operating profit increased by £145 million to £3 248 million. Increasedprofits in the LNG segment due to strong volume and income growth more thanoffset an increased exploration charge, weaker US$/UK£ exchange rate and theimpact of the CATS pipeline shutdown. The Group's effective tax rate (including BG Group's share of joint ventures andassociates tax) was 43.0% (2006 43.7%) for the full year. Cash generated by operations increased by £331 million to £3 691 million. At 31 December 2007, the Group had returned £561 million to shareholders underits £750 million share repurchase programme, and the buy-back was completed inFebruary 2008. Capital investment of £1 923 million, excluding acquisitions of £574 million,comprised continuing investment in Europe and Central Asia (£606 million),Mediterranean Basin and Africa (£621 million), South America (£248 million),North America and the Caribbean (£313 million), and Asia Pacific(£135 million). In considering the dividend level the Board takes account of the outlook forearnings growth, cash flow and financial gearing. The Group is strongly financedand its cash flows are becoming more substantial as the business grows.Accordingly the Board recommends a final dividend of 5.76 pence per sharebringing the full year dividend to 9.36 pence per share, an increase of 30%compared with last year. Exploration and Production (E&P) Fourth Quarter Full Year 2007 2006 Business Performance 2007 2006 £m £m £m £m 59.7 57.2 +4% Production volumes (mmboe) 220.3 219.2 +1% 1 241 1 001 +24% Revenue and other operating income 4 039 3 928 +3% 763 575 +33% Total operating profit 2 387 2 457 -3% 511 368 +39% Capital investment 1 652 1 165 +42% Additional operating and financial data is given on page 28. Fourth quarter E&P total operating profit increased by 33% to £763 million reflecting a 4%increase in volumes and higher commodity prices, partially offset by the weakerUS$/UK£ exchange rate and increased exploration costs. Unit operating expenditure of £2.50 ($5.10) per boe was broadly in line with theprior year as higher lifting costs were offset by the weaker US$/UK£ exchangerate. The Group's average realised international gas price per produced therm waslower at 16.0 pence (2006 16.7 pence), principally due to the weaker US$/UK£exchange rate. In the UK, the average realised gas price per produced therm was38.4 pence (2006 34.4 pence) reflecting higher spot prices. The exploration charge of £106 million is £19 million higher than 2006,principally due to an expanded seismic programme. Capital investment of £511 million included expenditure in the UK (£148million), Tunisia (£108 million), Egypt (£87 million), Trinidad and Tobago (£48million), Kazakhstan (£42 million), India (£19 million) and Canada (£14million). Full year E&P total operating profit of £2 387 million was 3% lower reflecting third partydisruption to the CATS pipeline, higher exploration costs and a weaker US$/UK£exchange rate. Production growth was 1%. Excluding disposals and the impact ofthe CATS pipeline disruption, production growth was 5%. The exploration charge of £336 million is £64 million higher than 2006,principally due to an expanded seismic programme following the acquisition ofnew acreage in recent years. Unit operating expenditure increased 14% to £2.61 ($5.22) per boe (2006 £2.29)reflecting the effectof commodity prices on industry cost inflation and royalty costs, partiallyoffset by the impact of the US$/UK£ exchange rate. Capital investment of £1 652 million included expenditure in the UK (£444million), Tunisia (£379 million), Egypt (£221 million), Trinidad and Tobago(£149 million), Kazakhstan (£133 million), India (£90 million) and Canada (£65million). Fourth quarter business highlights In December, the Maria field (BG Group 36% and operator) in the UK North Seabegan production. Production from Maria is tied back to the BG Group-operatedArmada platform, with gas exported via the CATS pipeline and liquids through theForties pipeline. During the fourth quarter, testing of the Tupi Sul appraisal well in Brazilresulted in a significant increase in the estimate of the size of the Tupifield. In December, BG Group and partners successfully drilled the Huacaya X-1 well (BGGroup 37.5%), which proved a northerly extension of the Margarita field inBolivia. In December, BG Group increased its equity stake in Block 30/2a (BG Group-operated) from 34.4% to 43.1%, which contains part of the Jackdaw discovery inthe UK North Sea. In February 2008, BG Group and partners announced a successful well in theJasmine North Terrace (BG Group 30.5%) in the UK North Sea. In February 2008, BG Group announced an agreement to establish an alliance withQueensland Gas Company Limited (QGC), a leading coal seam gas company supplyingthe Queensland market, Australia. BG Group will initially acquire a 20% interestin QGC's coal seam gas assets in the Surat Basin, South West Queensland and a9.9% stake in QGC, for a total consideration of £299 million. The companies willco-operate in the exploration and development of onshore coal seam gas acreageto supply the domestic market and a new LNG production and export facility (seepage 7). The three year organic reserve replacement rate at constant prices was 103% andfor one year was 107%. The three year total proved reserve replacement rate was83% at year end prices (see page 29). Liquefied Natural Gas (LNG) Fourth Quarter Full Year 2007 2006 Business Performance 2007 2006 £m £m £m £m 788 675 +17% Revenue and other operating income 3 099 2 442 +27% Total operating profit 145 118 +23% Shipping and marketing 463 332 +39% 38 25 +52% Liquefaction 127 104 +22% (20) (28) -29% Business development and other (69) (84) -18% 163 115 +42% 521 352 +48% 59 91 -35% Capital investment 194 496 -61% Additional operating and financial data is given on page 28. Fourth quarter LNG total operating profit increased by £48 million to £163 million principallydue to higher volumes and income in the shipping and marketing business andhigher tariff income at Atlantic LNG Train 4, partially offset by the weaker US$/UK£ exchange rate. In shipping and marketing, operating profit increased by £27 million to £145million, as BG Group redirected its flexible supply portfolio to access strongdemand and prices in Asia. BG Group's share of operating profit from liquefaction activities increased to£38 million, principally due to an increase in the tariff as Atlantic LNG Train4 entered its commercial phase during 2007. Capital investment of £59 million in the quarter included £47 million onregasification development projects, primarily relating to GNL Quintero S.A. inChile, and £4 million relating to new LNG ships. Full year LNG total operating profit increased by 48% to £521 million. Shipping andmarketing profit rose by 39% as managed volumes increased 31% to 13 milliontonnes. BG Group used its flexible portfolio to deliver supply to nine countriesduring the year. BG Group's share of operating profit from liquefaction activities increased by£23 million to £127 million reflecting the entry of Atlantic LNG Train 4 intoits commercial phase. Capital investment of £194 million included £112 million on regasificationprojects in Chile and the UK, and £60 million relating to new LNG ships. Fourth quarter business highlights In December, BG Group took delivery of the Methane Nile Eagle 145 000 m3 LNGcarrier. BG Group's alliance with QGC (see page 6) will pursue a 3-4 mtpa LNG facility inSouth West Queensland to supply Asia-Pacific markets. Transmission and Distribution (T&D) Fourth Quarter Full Year 2007 2006 Business Performance 2007 2006 £m £m £m £m Revenue and other operating income 220 186 +18% Comgas 811 738 +10% 46 40 +15% Other 167 139 +20% 266 226 +18% 978 877 +12% Total operating profit 54 39 +38% Comgas 211 186 +13% 6 14 -57% Other 36 45 -20% 60 53 +13% 247 231 +7% 42 38 +11% Capital investment 117 123 -5% Fourth quarter T&D total operating profit increased by £7 million to £60 million. At Comgas, in Brazil, total operating profit increased by £15 million to £54million, reflecting a 5% increase in volumes, higher margins and a favourableBrazilian Real (BRL) exchange rate. The results include the net cost (£4million) of passing back to customers the reduced gas costs experienced inearlier periods. Other T&D operating profit reflects the disposal of the Interconnector in 2007and in 2006 benefited from a one-off reduction in provisions. Capital investment mainly represents the development of the Comgas pipelinenetwork. Full year T&D total operating profit increased by £16 million to £247 million. At Comgas,a £25 million increase in total operating profit reflected a 5% increase involumes, increased margins and a favourable BRL exchange rate. Comgas' total operating profit in 2007 includes £3 million net benefit that willbe passed back to customers in future periods. A further £12 million is expectedto be passed back in future periods. Other T&D activities includes an £11 million increase in operating profit atGujarat Gas, reflecting a 10% increase in volumes and a stronger Indian Rupee,more than offset by reduced profits at the Interconnector business due to theeffects of the disposal of BG Group's equity in the company in 2007 and aprovision release in 2006. Power Generation Fourth Quarter Full Year 2007 2006 Business Performance 2007 2006 £m £m £m £m 145 64 +127% Revenue and other operating income 523 248 +111% Total operating profit 38 32 +19% Power Generation 147 115 +28% (6) (4) +50% Business development and other (17) (9) +89% 32 28 +14% 130 106 +23% 8 48 -83% Capital investment 520 55 +845% Fourth quarter and full year The increase in revenue in both the quarter and full year is principally due tothe consolidation of new subsidiaries. The increase in operating profit includes£8 million in the quarter and £22 million in the full year attributable toacquisitions, the majority of which were made part way through the year. Capital investment in the full year primarily relates to the acquisitions of theMasspower and Lake Road power plants in the USA and the remaining equity (66.3%)of Serene S.p.A. (now known as BG Italia Power S.p.A.) in Italy. Presentation of Non-GAAP measures Business Performance 'Business Performance' excludes disposals, certain re-measurements and impairments (see below) as exclusion of these items provides a clear and consistent presentation of the underlying operating performance of the Group's ongoing business. BG Group uses commodity instruments to manage price exposures associated 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, certain re-measurements and impairments BG Group's commercial arrangements for marketing gas include the use of long-term gassales contracts. Whilst the activity surrounding these contracts involves the physical delivery of gas, certain UK gas sales contracts are classified as derivatives under the rules of IAS 39 and are required to be measured at fair value at the balance sheet date. Unrealised gains and losses on these contracts reflect thecomparison between current market gas prices and the actual prices to be realised under the gas sales contract and are disclosed separately as 'disposals, re-measurements and impairments'. BG Group also uses commodity instruments to manage certain price exposures in respectof optimising the timing and location of its physical gas and LNG sales commitments. These instruments are also required to be measured at fair value at the balance sheetdate under IAS 39. However, IAS 39 does not always allow the matching of these fair values to the economically hedged value of the related commodity, resulting in unrealised movements in fair value being recorded in the income statement. These movements in fair value are disclosed separately as 'disposals, re-measurements and impairments'. BG Group also uses financial instruments, including derivatives, to manage foreign exchange and interest rate exposure. These instruments are required to be recognised at fair value or amortised cost on the balance sheet in accordance with IAS 39. Most of these instruments have been designated either as hedges of foreign exchange movements associated with the Group's net investments in foreign operations, or as hedges of interest rate risk. Where these instruments cannot be designated as hedges under IAS 39, unrealised movements in fair value are recorded in the income statementand disclosed separately as 'disposals, re-measurements and impairments'. Realised gains and losses relating to the instruments referred to above are included in Business Performance. This presentation best reflects the underlying performance of the business since it distinguishes between the temporary timing differences associated with re-measurements under IAS 39 rules and actual realised gains and losses. BG Group has also separately identified profits and losses associated with the disposal of non-current assets, and impairments of non-current assets as they requireseparate disclosure in order to provide a clearer understanding of the results for the period. For a reconciliation between the overall results and Business Performance and detailsof disposals, re-measurements and impairments, see the consolidated income statements, pages 12 and 13 and Note 2 to the preliminary unaudited financial statements, page 19. Joint ventures and associates Under IFRS the results from jointly controlled entities (joint ventures) and associates, accounted for under the equity method, are required to be presented net of finance costs and tax on the face of the income statement. Given the relevance of these businesses within BG Group, the results of joint ventures and associates are presented before interest and tax, and after tax. This approach provides additional information on the source of BG Group's operating profits. For a reconciliation between operating profit and earnings including and excluding the results of joint ventures and associates, see Note 3 to the preliminary unaudited financial statements, 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 manner is intended to provide additional information to explain further the underlying trends in the business. Net borrowings/funds BG Group provides a reconciliation of net borrowings/funds and an analysis of the amounts included within net borrowings/funds as this is an important liquidity measure for the Group. Legal Notice Certain statements included in these results contain forward-looking information concerning BG Group's strategy, operations, financial performance or condition, outlook, growth opportunities or circumstances in the countries, sectors or markets in which BG Group operates. By their nature, forward-looking statements involve uncertainty because they depend on future circumstances, and relate to events, not all of which are within BG Group's control or can be predicted by BG Group. Although BG Group believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. Actual results could differ materially from those set out in the forward-looking statements. For a detailed analysis of the factors that may affect our business, financial performance or results of operations, we urge you to look at the "Risk Factors" included in BG Group plc's Annual Report and Accounts 2006. Nothing in these results should be construed as a profit forecast and no part of these results constitutes, or shall be taken to constitute, an invitation or inducement to invest in BG Group plc or any other entity, and must not be relied uponin any way in connection with any investment decision. BG Group undertakes no obligation to update any forward-looking statements. Consolidated Income Statement Fourth quarter 2007 2006(i) Notes Business Disposals, Total Business Disposals, Total Performance re-measure-ments Result Performance re-measure-ments Result (ii) and impairments £m (ii) and impairments £m £m (Note 2)(ii) £m (Note 2)(ii) £m £m Group revenue 2 327 - 2 327 1 831 - 1 831Other operating 2 11 (144) (133) 66 191 257income Group revenue and 3 2 338 (144) 2 194 1 897 191 2 088other operating income Operating costs (1 398) - (1 398) (1 192) (104)(1 296) Profits and losses on 2 - 1 1 - (41) (41) disposal of non-current assets and impairments Operating profit/ 3 940 (143) 797 705 46 751(loss)(iii) Finance income 2, 4 44 (4) 40 22 15 37Finance costs 2, 4 (36) 7 (29) (23) (13) (36) Share of post-tax 3 42 - 42 38 - 38results from joint ventures and associates Profit/(loss) before 990 (140) 850 742 48 790tax Taxation 2, 5 (419) 69 (350) (323) (68) (391) Profit/(loss) for the 571 (71) 500 419 (20) 399period Attributable to: BG Group shareholders 558 (72) 486 410 (21) 389(earnings) Minority interest 13 1 14 9 1 10 571 (71) 500 419 (20) 399Earnings per share - 6 16.6p (2.2p) 14.4p 12.0p (0.6p) 11.4pbasic Earnings per share - 6 16.4p (2.1p) 14.3p 11.9p (0.6p) 11.3pdiluted Total operating profit including share of pre-tax operating results from joint ventures and associates(iv) 3 1 006 (143) 863 760 46 806 i) Restated as a result of post balance sheet events as detailed in the 2006Annual Report and Accounts. ii) See Presentation of Non-GAAP measures, page 10, for an explanation ofresults excluding disposals, certain re-measurements and impairments andpresentation of the results of joint ventures and associates. iii) Operating profit/(loss) is before share of results from joint ventures andassociates. iv) This measurement is shown by BG Group as it is used as a means of measuringthe underlying performance of the business. Consolidated Income Statement Full Year 2007 2006(i) Notes Business Disposals, Total Business Disposals, Total Performance re-measure-ments Result Performance re-measure-ments Result (ii) and impairments £m (ii) and impairments £m £m (Note 2)(ii) £m (Note 2)(ii) £m £m Group revenue 8 291 - 8 291 7 136 - 7 136Other operating 2 39 (172) (133) 134 404 538income Group revenue and 3 8 330 (172) 8 158 7 270 404 7 674other operating income Operating costs (5 329) - (5 329) (4 400) (104) (4 504) Profits and losses 2 - 19 19 - (49) (49) on disposal of non-current assets and impairments Operating profit/ 3 3 001 (153) 2 848 2 870 251 3 121(loss)(iii) Finance income 2, 4 146 6 152 104 23 127Finance costs 2, 4 (120) (4) (124) (80) (22) (102) Share of post-tax 3 163 - 163 139 - 139results from joint ventures and associates Profit/(loss) before 3 190 (151) 3 039 3 033 252 3 285tax Taxation 2, 5 (1 354) 115 (1 239) (1 348) (113) (1 461) Profit/(loss) for 1 836 (36) 1 800 1 685 139 1 824the period Attributable to: BG Group 1 783 (37) 1 746 1 640 139 1 779shareholders (earnings) Minority interest 53 1 54 45 - 45 1 836 (36) 1 800 1 685 139 1 824Earnings per share - 6 52.7p (1.1p) 51.6p 47.4p 4.0p 51.4pbasic Earnings per share - 6 52.2p (1.1p) 51.1p 47.0p 4.0p 51.0pdiluted Total operating 3 3 248 (153) 3 095 3 103 251 3 354profit including share of pre-tax operating results from joint ventures and associates(iv) Pence per £m Pence per £m ordinary share ordinary share Dividend per share - 7.80 264 7.09 247declared and paid Dividend per share - 5.76 194 4.20 143final proposed i) Restated as a result of post balance sheet events as detailed in the 2006Annual Report and Accounts. ii) See Presentation of Non-GAAP measures, page 10, for an explanation ofresults excluding disposals, certain re-measurements and impairments andpresentation of the results of joint ventures and associates. iii) Operating profit/(loss) is before share of results from joint venturesand associates. iv) 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 As at 31 Dec 31 Dec 2007 2006(i) £m £mAssets Non-current assets Goodwill 385 328Other intangible assets 823 694Property, plant and equipment 7 426 5 960Investments 1 157 1 086Deferred tax assets 86 74Trade and other receivables 70 49Commodity contracts and other derivative financial instruments 378 273 10 325 8 464Current assets Inventories 382 247Trade and other receivables 2 261 1 854Current tax receivable 52 -Commodity contracts and other derivative financial instruments 489 575Cash and cash equivalents 1 881 1 463 5 065 4 139Assets classified as held for sale - 85Total assets 15 390 12 688 Liabilities Current liabilities Borrowings (275) (103) Trade and other payables (2 251) (1 618)Current tax liabilities (554) (357) Commodity contracts and other derivative financial instruments (804) (741) (3 884) (2 819)Non-current liabilities Borrowings (1 668) (1 559)Trade and other payables (30) (21) Commodity contracts and other derivative financial instruments (366) (90) Deferred income tax liabilities (1 258) (1 146)Retirement benefit obligations (165) (167) Provisions for other liabilities and charges (662) (387) (4 149) (3 370)Liabilities associated with assets classified as held for sale - (34) Total liabilities (8 033) (6 223)Net assets 7 357 6 465Attributable to: BG Group equity shareholders 7 225 6 363Minority interest 132 102Total equity 7 357 6 465 i) Restated as a result of post balance sheet events as detailed in the 2006Annual Report and Accounts. Consolidated Statement of Recognised Income and Expense Fourth Quarter Full Year 2007 2006(i) 2007 2006(i) £m £m £m £m 500 399 Profit for the period 1 800 1 824 (90) 43 Hedge adjustments net of tax (86) 127 118 (163) Currency translation adjustments 101 (575) 28 (120) Net gains/(losses) recognised directly in equity 15 (448) 528 279 Total recognised income for the period 1 815 1 376 Attributable to: 18 10 Minority interest 67 39 510 269 BG Group shareholders 1 748 1 337 528 279 1 815 1 376 i) Restated as a result of post balance sheet events as detailed in the 2006Annual Report and Accounts. Consolidated Cash Flow Statement Fourth Quarter Full Year 2007 2006(i) 2007 2006(i) £m £m £m £m Cash flows from operating activities 850 790 Profit before tax 3 039 3 285 (42) (38) Share of post-tax results from joint ventures and (163) (139) associates 194 264 Depreciation and impairments of property, plant and 681 712 equipment and amortisation of intangible assets 135 (230) Fair value movements in commodity based contracts 191 (456) (1) 41 (Profits) and losses on disposal of non-current (19) 49 assets and impairments 41 36 Unsuccessful exploration expenditure written off 104 113 (5) 5 (Decrease)/increase in provisions (23) 5 (40) (37) Finance income (152) (127) 29 36 Finance costs 124 102 13 12 Share-based payments 35 30 (171) (75) (Increase)/decrease in working capital (126) (214) 1 003 804 Cash generated by operations 3 691 3 360 (289) (227) Income taxes paid (950) (979) 714 577 Net cash inflow from operating activities 2 741 2 381 Cash flows from investing activities 80 66 Dividends received from joint ventures and 148 193 associates - 4 Proceeds from disposal of subsidiary undertakings 461 9 and investments 2 49 Proceeds from disposal of property, plant and 3 49 equipment and intangible assets (533) (403) Purchase of property, plant and equipment and (1 718) (1 313) intangible assets (36) (13) Loans (to)/from joint ventures and associates (82) (66) (11) (47) Business combinations and investments (497) (67) (498) (344) Net cash outflow from investing activities (1 685) (1 195) Cash flows from financing activities 7 9 Net interest received(ii) 3 14 (4) (3) Dividends paid (264) (246) (12) (18) Dividends paid to minority (37) (36) 115 109 Net proceeds from issue of new borrowings 444 214 (63) (51) Repayment of borrowings (290) (192) 17 12 Issue of shares 51 25 - - Issue of shares to minority shareholder - 1 (108) (14) Purchase of own shares (555) (972) (48) 44 Net cash (outflow)/inflow from financing activities (648) (1 192) 168 277 Net increase/(decrease) in cash and cash equivalents 408 (6) 1 704 1 191 Cash and cash equivalents at beginning of period 1 463 1 516 9 (5) Effect of foreign exchange rate changes 10 (47) 1 881 1 463 Cash and cash equivalents at end of period(iii) 1 881 1 463 i) Restated as a result of post balance sheet events as detailed in the 2006Annual Report and Accounts. ii) Includes capitalised interest for the fourth quarter of £9 million (2006£11 million), and for the full year of £37 million (2006 £54 million). iii) Cash and cash equivalents comprise cash and short-term liquid investmentsthat are readily convertible to cash. Reconciliation of Net Borrowings/Funds(i) - Full Year £m Net borrowings as at 31 December 2006 (103)Net increase in cash and cash equivalents 408 Cash inflow from changes in borrowings (154)Inception of finance leases (53)Effect of acquisitions (40)Foreign exchange and other re-measurements (33)Net funds as at 31 December 2007(i) (ii) 25 Net borrowings attributable to Comgas were £318 million (31 December 2006 £242million). As at 31 December 2007, BG Group's share of the net borrowings in joint venturesand associates amounted to approximately £1.0 billion, including BG Groupshareholder loans of approximately £0.7 billion. These net borrowings areincluded in BG Group's share of the net assets in joint ventures and associateswhich are consolidated in BG Group's accounts. i) Net borrowings/funds are defined on page 31. ii) Net borrowings/funds comprise: As at As at 31 Dec 31 Dec 2007 2006 £m £mAmounts receivable/(due) within one year Cash and cash equivalents 1 881 1 463Overdrafts, loans and finance leases (275) (103) Derivative financial instruments(iii) 60 - 1 666 1 360Amounts receivable/(due) after more than one year Loans and finance leases (1 668) (1 559)Derivative financial instruments(iii) 27 96 (1 641) (1 463)Net funds/(borrowings) 25 (103) iii) These items are included within commodity contracts and other derivativefinancial instrument balances on the balance sheet. Liquidity and Capital Resources All the information below is as at 31 December 2007 The Group's principal borrowing entities are: BG Energy Holdings Limited (BGEH),including wholly-owned subsidiary undertakings, the majority of whose borrowingsare guaranteed by BG Energy Holdings Limited (collectively BGEH), and Comgas andGujarat Gas, which conduct their borrowing activities on a stand-alone basis. BGEH had a $1.0 billion US Commercial Paper Programme, which was unutilised, anda $1.0 billion Eurocommercial Paper Programme, of which $968.7 million wasunutilised. BGEH also had a $2.0 billion Euro Medium Term Note Programme, ofwhich $1.55 billion was unutilised. BGEH had aggregate committed multicurrency revolving borrowing facilities of$1.04 billion which expire in 2012. There are no restrictions on the applicationof funds under these facilities, which were undrawn. In addition, BGEH had uncommitted borrowing facilities including multicurrencylines, overdraft facilities of £60 million and credit facilities of $40 million,all of which were unutilised. Comgas had committed borrowing facilities of Brazilian Reals (BRL) 1 795.0million, of which BRL 394.8 million was unutilised, and uncommitted borrowingfacilities of BRL 577.6 million, all of which were unutilised. Notes 1. Basis of preparation These primary statements are the unaudited preliminary consolidated financialstatements of BG Group plc for both the quarter ended and the full year ended 31December 2007. The financial information does not comprise statutory accountswithin the meaning of Section 240 of the Companies Act 1985, and should be readin conjunction with the Annual Report and Accounts for the year ended 31December 2006, as they provide an update of previously reported information. Thelatest statutory accounts delivered to the registrar were for the year ended 31December 2006 which were audited by BG Group's statutory auditorsPricewaterhouseCoopers LLP. These financial statements have been prepared inaccordance with the requirements of the UK Listing Rules and the accountingpolicies set out in the 2006 Annual Report and Accounts. The preparation of the financial statements requires management to makeestimates and assumptions that affect the reported amount of revenues, expenses,assets and liabilities at the date of the preliminary financial statements. Ifin the future such estimates and assumptions, which are based on management'sbest judgement at the date of the financial statements, deviate from the actualcircumstances, the original estimates and assumptions will be modified asappropriate in the year in which the circumstances change. 2. Disposals, re-measurements and impairments Fourth Quarter Full Year 2007 2006 2007 2006 £m £m £m £m Revenue and other operating income - (144) 191 re-measurements of commodity based contracts (172) 404 - (104) Operating costs - (104) 1 (41) Profits and losses on disposal of non-current assets 19 (49) and impairments 3 2 Net finance income - re-measurements of financial 2 1 instruments 69 (68) Taxation 115 (113) (1) (1) Minority interest (1) - (72) (21) Impact on earnings (37) 139 Fourth quarter and full year: Revenue and other operating income Re-measurements included within revenue and other operating income amount to acharge of £144 million for the quarter (2006 £191 million credit), of which £135million (2006 £167 million credit) represents non-cash mark-to-market movementson certain long-term UK gas contracts. For the full year, a charge of £172million in respect of re-measurements is included within revenue and otheroperating income (2006 £404 million credit), of which £140 million representsnon-cash mark-to-market movements on certain long-term UK gas contracts (2006£366 million credit). Whilst the activity surrounding these contracts involvesthe physical delivery of gas, the contracts fall within the scope of IAS 39 andmeet the definition of a derivative instrument. Fourth quarter and full year: 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. 2007 fourth quarter and full year: Disposals of non-current assets During the fourth quarter, BG Group disposed of its exploration licences inItaly. This resulted in a gain on disposal of £1 million. No tax arose on thedisposal. During the second quarter, BG Group sold its 25% equity interest inInterconnector (UK) Limited whilst retaining its throughput capacity contractwith this company. The net proceeds of the equity disposal were £165 million,resulting in a pre- and post-tax gain of £157 million. No tax arose on the gainon this disposal. As part of this transaction, the Group reviewed the retainedcapacity contracts in the Interconnector pipeline and concluded that theobligations associated with these contracts exceed the benefit expected to bereceived from the Interconnector interest. Accordingly, a pre-tax provision of£156 million (post-tax £124 million) was made to reflect the present obligationunder these contracts. The overall transaction generated a pre-tax gain ondisposal of £1 million (post-tax £33 million). During the second quarter, BG Group disposed of selected Canadian explorationand production assets. This resulted in a gain on disposal of £18 million. Notax arose on the disposal. During the first quarter, BG Group disposed of its Mauritanian interests. Thisresulted in a loss on disposal of £1 million. No tax arose on the disposal. 2006 fourth quarter and full year: Operating costs The Brindisi asset was subject to an impairment review at the end of 2006 as aresult of uncertainties surrounding the project. The impairment review of theBrindisi regasification plant compared the value in use with the carrying valueof this asset, resulting in an impairment charge of £104 million to operatingcosts (post-tax £97 million). 2006 fourth quarter and full year: Disposals of non-current assets During the second quarter, BG Group disposed of its Indian telecoms businesses.This resulted in a loss on disposal of £8 million. No tax arose on the disposal. During the fourth quarter, BG Group disposed of its 37.5% interest in NileValley Gas Company which resulted in a £1 million profit on disposal. No taxarose on the disposal. During the fourth quarter, BG Group sold two LNG ships, the Methane Arctic andMethane Polar. This disposal resulted in a £35 million profit on disposal. Notax arose on the disposal. During the fourth quarter, BG Group committed to a plan to sell its Mauritaniabusiness and accordingly reclassified this business as held for sale. As aresult, it was revalued to the lower of its carrying amount and fair value lesscosts to sell. This resulted in a pre-tax charge to the income statement of £67million (post-tax charge of £49 million). BG Group announced the sale of thisbusiness in January 2007. During the fourth quarter, BG Group committed to a plan to dispose of Microgenand accordingly reclassified the business as held for sale. As a result, it wasrevalued to the lower of its carrying amount and fair value less costs to sellresulting in a pre-tax charge to the income statement of £10 million andpost-tax charge of £7 million. In 2007, the decision was taken to close thisbusiness. At 31 December 2007 the closure was substantially complete. 3. Segmental analysis Group revenue and other operating income Fourth Quarter Business Disposals, Total Business Disposals, Total Performance re-measure-ments Result Performance re-measure-ments Result 2007 and impairments 2007 2006 and impairments 2006 £m 2007 £m £m 2006 £m £m £m Exploration and 1 241 (144) 1 097 1 001 191 1 192Production Liquefied Natural Gas 788 - 788 675 - 675Transmission and 266 - 266 226 - 226Distribution Power Generation 145 - 145 64 - 64Other activities 2 - 2 1 - 1Less: intra-group sales (104) - (104) (70) - (70) 2 338 (144) 2 194 1 897 191 2 088 Group revenue and other operating income Full year Business Disposals, Total Business Disposals, Total Performance re-measure-ments Result Performance re-measure-ments Result 2007 and impairments 2007 2006 and impairments 2006 £m 2007 £m £m 2006 £m £m £m Exploration and 4 039 (172) 3 867 3 928 404 4 332Production Liquefied Natural Gas 3 099 - 3 099 2 442 - 2 442Transmission and 978 - 978 877 - 877Distribution Power Generation 523 - 523 248 - 248Other activities 7 - 7 8 - 8Less: intra-group sales (316) - (316) (233) - (233) 8 330 (172) 8 158 7 270 404 7 674 3. Segmental analysis (continued) Business Disposals, Total Result Performance(i) re-measurements and impairments Fourth Quarter 2007 2006 2007 2006 2007 2006 £m £m £m £m £m £m Total operating profit before share of results from joint ventures and associates Exploration and Production 763 575 (143) 124 620 699Liquefied Natural Gas 125 90 - (69) 125 21Transmission and Distribution 53 44 - 1 53 45Power Generation 11 7 - - 11 7Other activities (12) (11) - (10) (12) (21) 940 705 (143) 46 797 751 Pre-tax share of operating results of joint ventures and associates(ii) Liquefied Natural Gas 38 25 - - 38 25Transmission and Distribution 7 9 - - 7 9Power Generation 21 21 - - 21 21 66 55 - - 66 55Total operating profit including share of results from joint ventures and associates Exploration and Production 763 575 (143) 124 620 699Liquefied Natural Gas 163 115 - (69) 163 46Transmission and Distribution 60 53 - 1 60 54Power Generation 32 28 - - 32 28Other activities (12) (11) - (10) (12) (21) 1 006 760 (143) 46 863 806 For notes i) to ii) see footnotes on page 23. 3. Segmental analysis (continued) Business Disposals, Total Result Performance(i) re-measurements and impairments Full Year 2007 2006 2007 2006 2007 2006 £m £m £m £m £m £mTotal operating profit before share of results from joint ventures and associates Exploration and Production 2 387 2 457 (154) 337 2 233 2 794Liquefied Natural Gas 394 248 - (69) 394 179Transmission and Distribution 213 190 1 1 214 191Power Generation 44 18 - - 44 18Other activities (37) (43) - (18) (37) (61) 3 001 2 870 (153) 251 2 848 3 121Pre-tax share of operating results of joint ventures and associates(ii) Liquefied Natural Gas 127 104 - - 127 104Transmission and Distribution 34 41 - - 34 41Power Generation 86 88 - - 86 88 247 233 - - 247 233Total operating profit including share of results from joint ventures and associates Exploration and Production 2 387 2 457 (154) 337 2 233 2 794Liquefied Natural Gas 521 352 - (69) 521 283Transmission and Distribution 247 231 1 1 248 232Power Generation 130 106 - - 130 106Other activities (37) (43) - (18) (37) (61) 3 248 3 103 (153) 251 3 095 3 354 iv) Business Performance excludes disposals, certainre-measurements and impairments. See Note 2, page 19 and Presentation ofNon-GAAP measures, page 10. v) Share of results in joint ventures and associates in the tableabove is before finance costs and taxation. The share of results after financecosts and taxation for the quarter is £42 million (2006 £38 million), and forthe full year is £163 million (2006 £139 million). 3. Segmental analysis (continued) Total Result Operating Share of Total Result profit results before share of in joint results from ventures joint ventures and associates and associates Fourth Quarter 2007 2006 2007 2006 2007 2006 £m £m £m £m £m £mExploration and Production 620 699 - - 620 699Liquefied Natural Gas 125 21 24 16 149 37Transmission and Distribution 53 45 4 6 57 51Power Generation 11 7 14 16 25 23Other activities (12) (21) - - (12) (21) 797 751 42 38 839 789 Net finance income 11 1Taxation (350) (391) Profit for the period 500 399 Total Result Operating Share of Total Result profit results before share of in joint results from ventures joint ventures and associates and associates Full year 2007 2006 2007 2006 2007 2006 £m £m £m £m £m £mExploration and Production 2 233 2 794 - - 2 233 2 794Liquefied Natural Gas 394 179 78 55 472 234Transmission and Distribution 214 191 57 25 271 216Power Generation 44 18 28 59 72 77Other activities (37) (61) - - (37) (61) 2 848 3 121 163 139 3 011 3 260 Net finance income 28 25Taxation (1 239) (1 461) Profit for the period 1 800 1 824 4. Net finance incomeFourth Quarter Full Year 2007 2006 2007 2006 £m £m £m £m (22) (14) Interest payable (77) (61) (16) (15) Interest on obligations under finance leases (56) (58) 9 11 Interest capitalised 37 54 (7) (5) Unwinding of discount on provisions(i) (24) (15) 7 (13) Disposals, re-measurements and impairments (Note 2) (4) (22) (29) (36) Finance costs (124) (102) 44 22 Interest receivable 146 104 (4) 15 Disposals, re-measurements and impairments (Note 2) 6 23 40 37 Finance income 152 127 11 1 Net finance income(ii) 28 25 i) Relates to the unwinding of the discount on provisions and amounts in respectof pension obligations which represent the unwinding of discount on the plans'liabilities offset by the expected return on the plans' assets. ii) Excludes Group share of net finance costs from joint ventures and associatesfor the quarter of £12 million (2006 £16 million), and for the full year of £53million (2006 £67 million). 5. Taxation The taxation charge for the fourth quarter before disposals, re-measurements andimpairments was £419 million (2006 £323 million) and the taxation chargeincluding disposals, re-measurements and impairments was £350 million (2006 £391million). For the full year, the taxation charge before disposals, re-measurements andimpairments was £1 354 million (2006 £1 348 million)(i) and the taxation chargeincluding disposals, re-measurements and impairments was £1 239 million (2006 £1461 million)(ii), including £758 million (2006 £718 million) in respect ofoverseas tax. The Group share of taxation from joint ventures and associates for the fourthquarter was £12 million (2006 £1 million) and for the full year was £31 million(2006 £27 million). i) Includes a prior period taxation charge of £38 million as a result of theincrease in North Sea taxation in respect of the restatement of deferred taxbalances at 1 January 2006. ii) In addition to (i) above, includes a £61 million credit relating to theimpact of the increase in North Sea taxation on re-measurement balances. 6. Earnings per ordinary share Fourth Quarter Full Year 2007 2006 2007 2006 £m Pence £m Pence £m Pence £m Pence per per per per share share share share 486 14.4 389 11.4 Earnings 1 746 51.6 1 779 51.4 73 2.2 (20) (0.6) Re-measurements 88 2.6 (188) (5.4) (after tax and minority interest) (1) - 41 1.2 Profits and losses on (51) (1.5) 49 1.4 disposals and impairments (after tax) 558 16.6 410 12.0 Earnings - excluding 1 783 52.7 1 640 47.4 disposals, re-measurements and impairments Basic earnings per share calculations in 2007 are based on shares in issue of 3365 million for the quarter and 3 385 million for the full year. 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 3 397 million for the quarter and 3 417 million for the full year, being theweighted average number of ordinary shares in issue during the period asadjusted for share options. 7. Results Presentation Full year Business Disposals, Total Result Performance re-measurements and impairments (i) 2007 2006 2007 2006 2007 2006 £m £m £m £m £m £mOperating profit before disposal of 3 001 2 870 (172) 300 2 829 3 170non-current assets Profits and losses on disposal of - - 19 (49) 19 (49) non-current assets and impairments Operating profit before share of results 3 001 2 870 (153) 251 2 848 3 121from joint ventures and associates Pre-tax share of operating results of 247 233 - - 247 233joint ventures and associates Total operating profit 3 248 3 103 (153) 251 3 095 3 354Net finance costs Finance income 146 104 6 23 152 127Finance costs (120) (80) (4) (22) (124) (102) Share of joint ventures and associates (53) (67) - - (53) (67) (27) (43) 2 1 (25) (42) Taxation Taxation(ii) (1 354) (1 348) 115 (113) (1 239) (1 461)Share of joint ventures and associates (31) (27) - - (31) (27) (1 385) (1 375) 115 (113) (1 270) (1 488)Profit for the period 1 836 1 685 (36) 139 1 800 1 824Profit attributable to: Shareholders (earnings) 1 783 1 640 (37) 139 1 746 1 779Minority interest 53 45 1 - 54 45 1 836 1 685 (36) 139 1 800 1 824 i) See Presentation of Non-GAAP measures, page 10. ii) 2006 includes prior period taxation adjustments following the increase inNorth Sea taxation. 8. Capital investment: geographical analysis Fourth Quarter Full Year 2007 2006 2007 2006 £m £m £m £m 215 159 Europe and Central Asia 753 530 92 46 South America 248 199 37 43 Asia Pacific 135 127 80 175 North America and the Caribbean 740 654 204 125 Mediterranean Basin and Africa 621 337 628 548 2 497 1 847 9. Quarterly information: earnings and earnings per share 2007 2006 2007 2006 £m £m pence penceFirst quarter including disposals and re-measurements 432 578 12.7 16.4excluding disposals and re-measurements 448 563 13.1 16.0Second quarter including disposals and re-measurements 471 418 13.9 12.0excluding disposals and re-measurements 409 325 12.0 9.3Third quarter including disposals and re-measurements 357 394 10.6 11.5excluding disposals and re-measurements 368 342 10.9 10.0Fourth quarter including disposals and re-measurements 486 389 14.4 11.4excluding disposals and re-measurements 558 410 16.6 12.0Full year including disposals and re-measurements 1 746 1 779 51.6 51.4excluding disposals and re-measurements 1 783 1 640 52.7 47.4 Supplementary information: Operating and financial data Fourth Quarter Third Full Year Quarter 2007 2006 2007 2007 2006 Production volumes (mmboe) 7.7 5.9 6.6 - oil 28.2 21.1 9.0 8.7 8.2 - liquids 35.7 30.6 43.0 42.6 33.9 - gas 156.4 167.5 59.7 57.2 48.7 - total 220.3 219.2 Production volumes (boed in thousands) 84 64 72 - oil 77 58 98 95 89 - liquids 98 84 467 463 368 - gas 429 459 649 622 529 - total 604 601 £43.31 £31.57 £37.89 Average realised oil price per barrel £36.64 £35.85($88.59) ($60.13) ($76.47) ($73.39) ($65.54) £35.92 £24.36 £30.35 Average realised liquids price per barrel £29.49 £28.82($73.48) ($46.40) ($61.26) ($59.07) ($52.68) 38.36p 34.41p 29.46p Average realised UK gas price per 33.32p 31.89p produced therm 16.00p 16.69p 14.54p Average realised International gas price 15.53p 17.23p per produced therm 21.40p 21.28p 16.62p Average realised gas price per produced 19.36p 20.68p therm £1.58 £1.51 £1.78 Lifting costs per boe £1.64 £1.34($3.22) ($2.88) ($3.60) ($3.29) ($2.45) £2.50 £2.53 £2.73 Operating expenditure per boe £2.61 £2.29($5.10) ($4.82) ($5.50) ($5.22) ($4.18) 340 201 310 Development expenditure (£m) 1 242 721 Gross exploration expenditure (£m) 116 129 83 - capitalised expenditure 304 396 65 51 65 - other expenditure 232 159 181 180 148 - gross expenditure 536 555 Exploration expenditure charge (£m) 41 36 37 - capitalised expenditure written off 104 113 65 51 65 - other expenditure 232 159 106 87 102 - exploration charge 336 272 LNG Cargoes 1 12 21 - delivered to Lake Charles 86 50 10 15 22 - delivered to Elba Island 64 54 37 23 17 - re-marketed 81 78 48 50 60 - total 231 182 144.8 139.8 172.4 LNG managed volumes (Tbtu) 670.8 511.7 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 $1.00 rise (or fall) in the Brent price would increase(or decrease) operating profit in 2008 by approximately £40 million to £50million. BG Group's exposure to the US$/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 2008, otherfactors being constant, a 10 cent strengthening (or weakening) in the US Dollarwould increase (or decrease) operating profit by approximately £140 million to£160 million. Additional information: Exploration and Production - Reserves/Resource Data As at As at 31 Dec 31 Dec 2007 2006 mmboe mmboeProved 2 039 2 149Probable 1 529 1 383Unbooked resources 3 122 1 772Risked exploration 3 356 2 713Total reserve/resource base 10 046 8 017 Total additions and revisions to proved reserves during the year were 110 mmboe.This includes revisions due to new data and improved reservoir performance (172mmboe increase), sanctions (63 mmboe increase), acquisitions and disposals (8mmboe decrease) and the net effect of price movements (117 mmboe decrease). Total Proved Reserve Replacement Rate (RRR): The three/one year average proved reserve replacement rate is the total netproved reserves changes over the three/one year period including purchases andsales excluding production divided by the total net production for that period. For information: 3 year 1 yearUnderlying performance(i) 101% 103%SEC data(ii) 83% 50% Organic Proved Reserve Replacement Rate (RRR): The three/one year average proved reserve replacement rate is the total netproved reserves changes over the three/one year period excluding purchases,sales and production divided by the total net production for that period. For information: 3 year 1 yearUnderlying performance(i) 103% 107%SEC data(ii) 84% 54% Finding & Development Cost (F&D): The three/one year average unit finding & development cost is calculated bydividing the total exploration, development and unproved acquisition costsincurred over the period by the total changes in net proved reserves excludingpurchases, sales and production for that period. For information: 3 year 1 yearUnderlying performance(i) $11.9/boe $14.6/boeSEC data(ii) $14.6/boe $28.9/boe i) Underlying performance includes reserves revisions and new developmentsand is calculated at constant prices. ii) Includes all reserves revisions and is calculated at year end prices inline with the methodology of the SEC. Glossary In BG Group's results some or all of the following definitions are used: bcf billion cubic feet bcfd billion cubic feet per day bcmpa billion cubic metres per annum boe barrels of oil equivalent boed barrels of oil equivalent per day bopd barrels of oil per day CCGT combined cycle gas turbine DCQ daily contracted quantity E&P Exploration and Production EPC engineering, procurement and construction EPIC engineering, procurement, installation and commissioning FEED front end engineering design FERC Federal Energy Regulatory Commission Gearing ratio net borrowings as a percentage of total shareholders' funds (excluding the re-measurement of commodity financial instruments and associated deferred tax) plus net borrowings GW gigawatt IAS 39 International Accounting Standard 39 (Financial Instruments) IFRS International Financial Reporting Standards kboed thousand barrels of oil equivalent per day LNG Liquefied Natural Gas Managed volumes Comprises all LNG volumes contracted for purchase and having related revenue and other operating income recognised in the applicable period m million mmboe million barrels of oil equivalent mmbtu million british thermal units mmcfd million cubic feet per day mmcmd million cubic metres per day mmscfd million standard cubic feet per day mmscm million standard cubic metres mmscmd million standard cubic metres per day MoU Memorandum of understanding mtpa million tonnes per annum MW megawatt Net borrowings/ Comprise cash, current asset investments, finance leases, funds currency and interest rate derivative financial instruments and short- and long-term borrowings NGL Natural gas liquids PSA production sharing agreement SEC US Securities and Exchange Commission T&D Transmission and Distribution Tbtu Trillion british thermal units Total operating Group operating profit plus share of pre-tax operating results ofprofit joint ventures and associates UKCS United Kingdom Continental Shelf Unit operating Production costs and royalties incurred over the period divided expenditure per boe by the net production for the period. Production costs and royalties (other operating costs) for the period are disclosed under "results of operations" in the Supplementary information - Oil and Gas disclosures in BG Group's Annual Report & Accounts for the period. This measure does not include the impact of depreciation and amortisation costs and exploration costs as they are not considered to be costs associated with the operation of producing assets. Unit lifting costs 'Unit operating expenditure' as defined above, excluding royalty,per boe tariff and insurance costs incurred over the period divided by the net production for the period. Enquiries Enquiries relating to BG Group's results, General enquiries about shareholder business and financial position should be matters made to: should be made to: Investor Relations Department Equiniti Limited BG Group plc Aspect House Thames Valley Park Drive Spencer Road Reading Lancing Berkshire West Sussex RG6 1PT BN99 6DA Tel: 0118 929 3025 Tel: 0871 384 2064 e-mail: [email protected] e-mail: [email protected] BG Group is listed on the US over-the-counter market known as the International OTCQX. Enquiries should be made to: Pink Sheets LLC 304 Hudson Street 2nd Floor New York, NY 10013 USA e-mail: [email protected] Financial Calendar Ex-dividend date for 2007 final dividend 9 April 2008 Record date for 2007 final dividend 11 April 2008 Announcement of 2008 first quarter results 30 April 2008 Payment of 2007 final dividend: Shareholders 23 May 2008 American depositary receipt holders 2 June 2008 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:
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