26th Jul 2013 07:00
BG Group plc
2013 SECOND QUARTER & HALF YEAR RESULTS
Second Quarter Key Points
·; Earnings down 3% to $986 million
·; Production down 2%, in line with expectations
·; Interim dividend increased 10% to 13.07 cents per share (8.51 pence)
·; Q2 project milestones delivered; Lula NE start-up successful; Karachaganak shutdown completed
·; QCLNG remains on track; three quarters of the wells required for first two trains now drilled
·; Excellent productivity data from latest Iara appraisal well
·; Further exploration success in Tanzania; total gross resource estimate increased to around 13 tcf
·; Egypt production unaffected by recent events, but increased domestic diversions throughout Q2
Second Quarter | Half Year | ||||||
2013 $m | 2012 Restated(a)$m | Business Performance(b) | 2013 $m | 2012 Restated(a)$m |
| ||
1 788 | 1 875 | -5% |
| Total operating profit including share of pre-tax operating results from joint ventures and associates | 3 935 | 4 135 | -5% |
986 | 1 020 | -3% |
| Earnings for the period | 2 169 | 2 245 | -3% |
29.0c | 30.0c | -3% |
| Earnings per share | 63.8c | 66.1c | -3% |
13.07c | 11.88c | +10% |
| Interim dividend per share | 13.07c | 11.88c | +10% |
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|
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| Total results for the period (including disposals,re-measurements and impairments) |
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1 374 | 458 | +200% |
| Operating profit before share of results from joint ventures and associates | 3 495 | 2 535 | +38% |
1 522 | 568 | +168% |
| Total operating profit including share of pre-tax operating results from joint ventures and associates | 3 772 | 2 774 | +36% |
833 | (20) | - |
| Earnings for the period continuing operations | 2 041 | 1 150 | +77% |
24.5c | (0.6c) | - |
| Earnings per share continuing operations | 60.0c | 33.9c | +77% |
a) 2012 results have been restated to reflect the presentation of the majority of the businesses that comprised the Transmission & Distribution segment as discontinued operations and the adoption of the amended IAS 19 in respect of defined benefit pension obligations (see note 1 page 25).
b) 'Business Performance' excludes disposals, certain re-measurements and impairments as exclusion of these items provides a clear and consistent presentation of the underlying operating performance of the Group's ongoing business. In 2012, total results for the second quarter and half year included a pre-tax charge of $1.8 billion (post-tax $1.3 billion) as a result of the impairment of certain assets associated with the shale gas business in the USA. For further information see Presentation ofNon-GAAP measures (page 17) and notes 1 to 3 (pages 25 to 28). Unless otherwise stated, the results discussed in this release relate to BG Group's Business Performance.
BG Group's Chief Executive, Chris Finlayson said:
"I'm pleased with our execution progress in the second quarter of 2013 as we successfully delivered both of our two key production milestones. The third FPSO vessel offshore Brazil started commercial production on time and on budget, and we also completed the major planned maintenance shutdown and re-start of the giant Karachaganak field in Kazakhstan, safely and ahead of schedule.
"We have delivered the five key milestones promised for the first half of the year and also continued tode-risk the five remaining for the second half. At the same time, we have continued to progress with our major growth projects, in the Santos Basin offshore Brazil and QCLNG in Australia, which are both on track.
"In the second quarter, earnings were down 3%, reflecting lower volumes and higher unit operating and depreciation costs in the Upstream segment. Both of these costs are expected to be around 50 cents per boe higher for full-year 2013 than originally forecast. LNG Shipping & Marketing results were up 1% from a year ago, despite fewer cargoes from Nigeria and Egypt. Assuming no further major disruptions in the balance of the year, we reiterate our 2013 LNG Shipping & Marketing total operating profit guidance range of $2.5 billion to $2.7 billion. All other guidance for the year also remains unchanged."
Addressing the civil unrest and political changes in Egypt, Chris said: "Events in Egypt remain a primary concern and will continue to be so as the political, social and business environment evolves. While our offshore operations continue unaffected, higher than agreed gas volumes were diverted into the Egyptian domestic market during the quarter, impacting volumes available for LNG export. An agreement between Egypt and Qatar for an initial five compensatory LNG cargoes, with two allocated to BG Group, is a positive development."
On the Group's major projects, Chris said: "In Australia, we made substantial progress on the QCLNG project and we are on track for both first LNG in 2014 and the $20.4 billion budget. In total, we have now drilled three quarters of the 2 000 wells needed to supply the first two LNG trains. On Curtis Island, the second storage tank roof was successfully and safely raised into place.
"In Brazil, there have been a number of important points of progress. Test results from our fourth appraisal well at Iara have shown excellent reservoir deliverability characteristics, significantly better than the Iara discovery well. These results are very positive for potential recoverable reserves and resources in Iara, which has oil in place comparable to Lula. The next two FPSOs due to start in 2014 are progressing well, with one already in Brazil for topsides integration. We are delighted to have won 10 offshore blocks in the Barreirinhas Basin, along the northern coastline, which we expect to expand further our inventory ofhigh-impact exploration opportunities.
"Elsewhere, in Tanzania we recorded an eighth consecutive discovery, Ngisi-1 in Block 4, and our total gross recoverable resource estimate for all our discoveries offshore Tanzania has increased to around13 tcf. The site selection process for the LNG plant is progressing well."
In conclusion, Chris said: "We have successfully delivered all our key milestones for the first half of 2013 as well as making good progress on the remaining milestones for the year. At the same time, we are making good headway on our major growth projects."
Business Review - Group
Second Quarter |
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| Half Year |
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| ||||
2013 $m |
| 2012 Restated(a)$m |
|
| Business Performance | 2013 $m |
| 2012 Restated(a)$m |
|
|
4 361 |
| 4 662 |
| -6% | Revenue and other operating income | 9 278 |
| 9 538 |
| -3% |
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 251 |
| 1 340 |
| -7% | Upstream | 2 682 |
| 2 882 |
| -7% |
521 |
| 517 |
| +1% | LNG Shipping & Marketing | 1 263 |
| 1 237 |
| +2% |
16 |
| 18 |
| -11% | Other activities | (10) |
| 16 |
| - |
1 788 |
| 1 875 |
| -5% | Total operating profit including share of pre-tax results from joint ventures and associates | 3 935 |
| 4 135 |
| -5% |
|
|
|
|
|
|
|
|
|
|
|
(26) |
| (28) |
| -7% | Net finance costs | (61) |
| (49) |
| +24% |
(776) |
| (827) |
| -6% | Taxation for the period | (1 705) |
| (1 841) |
| -7% |
986 |
| 1 020 |
| -3% | Earnings for the period | 2 169 |
| 2 245 |
| -3% |
|
|
|
|
|
|
|
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|
29.0c |
| 30.0c |
| -3% | Earnings per share (cents) | 63.8c |
| 66.1c |
| -3% |
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2 772 |
| 3 121 |
| -11% | Cash generated by operations | 5 506 |
| 5 766 |
| -5% |
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2 604 |
| 2 385 |
| +9% | Capital investment on a cash basis(b) | 5 240 |
| 4 890 |
| +7% |
a) See note 1 (page 25).
b) Includes capital investment relating to discontinued operations for the quarter of $5 million (2012 $76 million) and for the half year of $10 million (2012 $161 million).
Second quarter
Revenue and other operating income decreased 6% to $4 361 million, reflecting fewer LNG cargo deliveries, a 2% decrease in E&P production volumes and lower realised oil and liquids prices.
Total operating profit decreased 5% to $1 788 million, reflecting the decrease in volumes combined with higher unit operating costs and depreciation in the Upstream segment, partially offset by the benefit of lower hedging losses in the LNG segment.
Net finance costs of $26 million included foreign exchange gains of $18 million (2012 net finance costs of $28 million included foreign exchange gains of $18 million).
Cash generated by operations decreased 11% to $2 772 million, as a result of reduced operating profits and a lower working capital cash inflow.
As at 30 June 2013, the Group's net debt was $11 198 million and the gearing ratio was 25.2%. The average maturity of the Group's gross borrowings was around 16 years.
Capital investment (excluding acquisitions and on a cash basis) of $2 604 million was predominantly in the Upstream segment ($2 590 million). This investment was focused primarily on the Group's major projects in Australia, Brazil,the UK and Egypt. Further details on project developments are provided in the second quarter business highlights section.
Business Review - Group continued
Half year
Revenue and other operating income decreased 3% to $9 278 million, reflecting fewer LNG cargo deliveries, lower E&P production volumes and lower realised oil and liquids prices.
Total operating profit decreased 5% to $3 935 million, reflecting the decrease in revenue and other operating income combined with higher unit operating costs and depreciation in the Upstream segment.
Net finance costs of $61 million included foreign exchange gains of $23 million (2012 net finance costs of $49 million included foreign exchange gains of $9 million and $21 million of interest received on tax refunds).
The Group's effective tax rate (including BG Group's share of joint venture and associates' tax) for the full year is expected to be 44%, slightly lower than the rate of 44.5% for 2012.
Cash generated by operations decreased 5% to $5 506 million, reflecting the combined result of the decrease in operating profit and adverse working capital movements.
Capital investment (excluding acquisitions and on a cash basis) of $5 240 million was predominantly in the Upstream segment ($5 218 million). This investment was focused primarily on the Group's major projects in Australia, Brazil, the UK and Egypt. Further details on project developments are provided in the second quarter business highlights section.
The Board has approved the payment of an interim dividend of 13.07 cents per share. This is half of the 2012 total dividend, in accordance with the Board's established policy. The interim dividend has been converted to Sterling at the average of the daily spot rates for the three business days prior to the business day before this announcement and will be paid on 6 September 2013 as 8.51 pence per share to shareholders on the register as at 7 August 2013.
Disposals, re-measurements and impairments
Total results included a pre-tax charge of $276 million ($153 million post-tax; 2012 pre-tax charge $1 298 million, $1 040 million post-tax) for the second quarter in respect of disposals, re-measurements and impairments, and a pre-tax charge of $241 million for the half year ($128 million post-tax; 2012 pre-tax charge $1 375 million, $1 095 million post-tax). The results for the second quarter of 2012 included a $1 800 million pre-tax ($1 295 million post-tax) impairment of certain assets associated with the shale gas business in the USA. For further information see Presentation of Non-GAAP measures (page 17) and notes 1 to 3 (pages 25 to 28).
Second quarter business highlights
Australia
Good progress continues to be made on Queensland Curtis LNG (QCLNG) with Phase 1 of the project on track for both first LNG in 2014 and the $20.4 billion budget.
Hydro-testing continues on the gas collection header infrastructure with seven of the 10 sections on the 200 kilometre network completed; work is on track to complete the remainder in July. Additionally, all of the mainline welding for the 340 kilometre export pipeline is complete, with around 70% of the pipeline lowered into the ground.
On Curtis Island, the liquefaction plant and common facilities are well on track. The steel dome roof of the second tank was raised, and all modules required for Train 1 and the common facilities have been delivered.
In the upstream, the pace of drilling was ahead of expectations with 213 wells drilled in the quarter, including a record 77 in June. The Group has now drilled three quarters of the 2 000 wells required for the first two trains. In addition, the first major water treatment facility at Kenya has been commissioned and first water was exported in July.
Brazil
Development in the Santos Basin also made very good progress with the start-up of the third of the initial 15 floating production, storage and offloading (FPSO) vessels in the joint ventures' current programme. The FPSO Cidade de Paraty (FPSO 3) came onstream on the Lula field in the quarter, on time and on budget.
Development of the remainder of the FPSO fleet remains on track. Work continues on FPSOs 4 and 5 planned for Sapinhoá and Iracema respectively, with FPSO 5 already in Brazil for topsides integration at the BrasFELS shipyard. Both FPSOs are on budget and are around 70% and 65% complete respectively, ahead of planned start-up in 2014.
In July, a fourth appraisal well at Iara was drilled and tested with excellent results. Well productivity data was significantly better than the Iara discovery well. The results of the Iara-4 well are very positive for potential recoverable reserves and resources from this giant field, which has oil in place similar to Lula. The Iara-6 appraisal well is currently underway, which will test the merits of high angle drilling through the reservoir.
In May, BG Group was the successful bidder for the operatorship of 10 blocks in the Barreirinhas Basin, an area along Brazil's northern coastline that is part of the country's equatorial margin. Six of these blocks initially have 100% BG Group equity. In the four remaining blocks, the Group is partnered with Petrobras (40%) and Galp (10%), the same partnership group as the BM-S-11 block in the pre-salt Santos Basin. It is expected that final contracts on these blocks will be signed in August.
Canada
In June, BG Group applied for a licence to export LNG from its proposed liquefaction facility on Ridley Island near Prince Rupert, British Columbia. Work continues across the scope of the project, and discussions with potential customers and partners are ongoing.
Egypt
At its first quarter 2013 results, BG Group highlighted the enhanced political risk in Egypt and the potential for additional gas to be diverted to the domestic market and away from LNG exports. During the second quarter, the domestic offtake from West Delta Deep Marine (WDDM) rose to an average of some 900 mmscfd, close to the sustainable maximum domestic offtake capacity, up from some 700 mmscfd in the first quarter. The Egyptian LNG plant continues to operate, but at lower than planned levels. Prior to the regime change, the Egyptian authorities provided written notice that domestic volumes will continue at the current level until the end of September 2013. They also stated their intent to abide by existing pooling arrangements through a combination of reduced domestic diversions in the fourth quarter and swap cargoes intended to keep the Egyptian LNG offtakers, which includes BG Group, whole. Lifting schedules for five compensating LNG export cargoes (two allocated to BG Group) from Qatar have been finalised, and deliveries are scheduled from the end of July through to mid-September.
As at 30 June 2013, the Group's receivable balance from Egypt General Petroleum Corporation (EGPC) in respect of domestic gas sales was $1.3 billion, an increase of $0.1 billion from the end of the first quarter reflecting higher domestic diversion volumes. The overdue balance remained at $0.6 billion. The recovery of receivables and the full realisation of the carrying value of the Group's Egyptian operations remain dependent on the business environment in Egypt, which BG Group continues to monitor closely.
Second quarter business highlights continued
Egypt continued
Operations of the Rosetta and WDDM production facilities, along with the drilling of the key Notus exploration well, have not been affected by the civil unrest and change in government. BG Group continues with its Phase 9a development programme, but given the current situation in Egypt, the Group's investment programme is under continuous review.
Upstream and LNG activities in Egypt accounted for around 20% of the Group's production and around 15% of earnings from continuing operations in 2012. The book value of BG Group's investment in Egypt, including receivables, represents around 12% of the Group's net assets.
Singapore
In May, BG Group announced the delivery of the first commercial cargo to Singapore's new LNG terminal on Jurong Island. In 2008, the Energy Market Authority (EMA) of Singapore selected BG Group as the sole aggregator of Singapore's first 3 million tons per annum (mtpa) of LNG demand. LNG cargoes will supply a variety of industrial customers, including six large scale power generation companies.
Tanzania
In July, BG Group had its eighth consecutive gas discovery offshore Tanzania, with the Ngisi-1 exploration well located in Block 4. The Ngisi well is the first to penetrate a reservoir section adjacent to the previously announced Pweza and Chewa discoveries in Block 4, opening up a new play in the Tertiary formation of the northern block.
Total gross recoverable resources for all BG Group's Tanzanian discoveries to date is now around 13 tcf. The site selection process for the LNG plant is progressing well.
Portfolio rationalisationprogramme
In May, BG Group signed binding agreements with China National Offshore Oil Corporation (CNOOC) for the sale of certain additional interests in the QCLNG project in Australia for $1.93 billion. Additionally, CNOOC will reimburse BG Group for its share of QCLNG project expenditure incurred from 1 January 2012. Completion of the transaction is expected by the end of the year, subject to government, regulatory and other relevant approvals and to the finalisation and execution of certain other related documentation.
In June, BG Group announced it had completed the sale of the Group's 65.12% holding in Gujarat Gas Company Limited (GGCL) for INR 24.6 billion ($422 million). BG Group's sale of its interest in GGCL is part of a broader rationalisation programme, aimed at refocusing the Group's portfolio on its core strengths of E&P and LNG.
Board changes
In July, BG Group announced that, with effect from November 2013, Simon Lowth has been appointed as Chief Financial Officer (CFO) and as an Executive Director. Simon is currently the CFO of AstraZeneca plc and an Executive Director on its Board.
Upstream
Second Quarter |
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| Half Year |
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| ||||
2013 $m |
| 2012 Restated(a)$m |
|
| Business Performance | 2013 $m |
| 2012 Restated(a)$m |
|
|
59.8 |
| 61.3 |
| -2% | Production volumes (mmboe)(b) | 119.1 |
| 122.2 |
| -3% |
|
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|
|
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|
|
2 916 |
| 3 066 |
| -5% | Revenue and other operating income | 5 988 |
| 6 053 |
| -1% |
|
|
|
|
|
|
|
|
|
|
|
1 272 |
| 1 466 |
| -13% | E&P operating profit before exploration charge | 2 704 |
| 3 028 |
| -11% |
(133) |
| (203) |
| -34% | Exploration charge | (239) |
| (315) |
| -24% |
1 139 |
| 1 263 |
| -10% | E&P operating profit | 2 465 |
| 2 713 |
| -9% |
112 |
| 77 |
| +45% | Liquefaction operating profit | 217 |
| 169 |
| +28% |
1 251 |
| 1 340 |
| -7% | Total operating profit | 2 682 |
| 2 882 |
| -7% |
|
|
|
|
|
|
|
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|
|
2 590 |
| 2 305 |
| +12% | Capital investment on a cash basis | 5 218 |
| 4 715 |
| +11% |
a) See note 1 (page 25).
b) Additional operating and financial data, including production volumes by country for the half year, is given on page 36.
Second quarter
Revenue and other operating income decreased 5% to $2 916 million, reflecting a 2% reduction in production volumes and lower realised oil and liquids prices. Volumes were lower, in line with expectations, reflecting the planned shutdown and the Group's lower equity in Kazakhstan, the scaling back of drilling operations in the USA and reservoir decline in Egypt, partially offset by new developments coming onstream.
The Group's average realised oil price decreased 6% to $102.11 per barrel and the liquids price decreased 8% to $82.88 per barrel, reflecting movements in market prices. The average realised gas price per produced therm increased 7% to 47.55 cents. International gas price realisations were 5% higher at 42.98 cents per produced therm, and the average UK realised gas price was 22% higher at 54.48 pence per produced therm mainly due to increased spot sales.
Total E&P operating profit of $1 139 million was 10% lower reflecting the decrease in revenue and other operating income combined with higher unit operating costs and depreciation. Unit operating expenditure increased to $11.37 per boe, reflecting the impact of higher royalty costs from new developments in Brazil and Bolivia and higher lifting costs in the UK. Lifting costs in the UK have been affected by increased logistics costs associated with the grounding of the Eurocopter EC225 helicopter fleet; reduced third-party gas processed through the Armada hub, increasing the Group's share of costs; and higher than expected costs associated with repairs at Everest and Lomond. As a result, E&P unit operating costs for the full year are now expected to be $11.50 to $12.00 per boe at reference conditions.
The unit depreciation charge increased to $11.22 per boe due to a combination of new developments coming onstream and the impact of minor reserves revisions. E&P unit depreciation for the full year is now expected to be $11.00 to $11.50 per boe.
The exploration charge decreased 34% to $133 million primarily due to lower well write-offs. Gross exploration expenditure of $334 million included spend in Tanzania ($84 million), Brazil ($67 million), Australia ($59 million), Egypt ($44 million) and the UK ($30 million).
BG Group's share of operating profit from liquefaction activities increased 45% to $112 million, primarily as a result of higher prices at Atlantic LNG.
Capital investment on a cash basis of $2 590 million included investment in Australia ($1 237 million), Brazil ($598 million), the UK ($193 million) and Egypt ($147 million).
Upstream continued
Half year
Revenue and other operating income decreased 1% to $5 988 million, reflecting a 3% reduction in production volumes and lower realised oil and liquids prices, partially offset by favourable changes in the production mix. Production volumes were lower primarily due to reservoir decline in Egypt, planned maintenance and lower equity in Kazakhstan, and the scaling back of drilling operations in the USA, partially offset by continued ramp-up of production from new developments in Brazil, Thailand, Bolivia and the UK.
The Group's average realised oil and liquids prices each decreased 6% to $106.38 and $89.15 per barrel respectively, reflecting movements in market prices. The Group's average realised gas price per produced therm increased 10% to 46.83 cents, reflecting generally higher market prices and changes in the production mix.
Total E&P operating profit of $2 465 million was 9% lower as a result of the decrease in revenues combined with higher operating costs. Unit operating expenditure increased to $11.22 per boe, principally reflecting the impact of higher royalty costs as production increased from new royalty-paying fields and higher lifting costs. The unit depreciation charge increased to $11.15 per boe due to the impact of new developments coming onstream and minor reserves revisions.
BG Group's share of operating profit from liquefaction activities increased 28% to $217 million, primarily as a result of higher prices at Atlantic LNG and higher processing fee income at Egyptian LNG.
Capital investment on a cash basis of $5 218 million included investment in Australia ($2 727 million), Brazil ($1 053 million), the UK ($401 million) and Egypt ($264 million).
LNG Shipping & Marketing
Second Quarter |
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| Half Year |
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| ||||
2013 $m |
| 2012 Restated(a)$m |
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| Business Performance | 2013 $m |
| 2012 Restated(a)$m |
|
|
2.4 |
| 2.9 |
| -17% | LNG delivered volumes (mt) | 5.4 |
| 6.1 |
| -11% |
|
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|
|
|
|
|
|
|
|
|
1 677 |
| 1 828 |
| -8% | Revenue and other operating income | 3 723 |
| 4 006 |
| -7% |
|
|
|
|
|
|
|
|
|
|
|
531 |
| 556 |
| -4% | Shipping and marketing | 1 316 |
| 1 304 |
| +1% |
(10) |
| (39) |
| -74% | Business development and other | (53) |
| (67) |
| -21% |
521 |
| 517 |
| +1% | Total operating profit | 1 263 |
| 1 237 |
| +2% |
|
|
|
|
|
|
|
|
|
|
|
9 |
| 4 |
| +125% | Capital investment on a cash basis | 11 |
| 13 |
| -15% |
a) See note 1 (page 25).
Additional operating and financial data is given on page 36.
Second quarter
LNG Shipping & Marketing total operating profit increased 1% to $521 million, as the benefit of lower hedging losses and lower business development costs was largely offset by fewer cargo deliveries.
During the quarter, BG Group delivered 39 LNG cargoes, seven fewer than in the second quarter of 2012, due to fewer spot cargoes, reduced liftings from Egypt and the impact of disruptions in Nigeria, which led to the loss of two cargoes in the quarter. Cargo deliveries comprised 25 to Asia, 12 to South America, one to the USA and one to Mexico(2012: 46 cargoes: 27 Asia, 14 South America, four USA and one Europe).
Half year
LNG Shipping & Marketing total operating profit increased 2% to $1 263 million, as the benefit of lower hedging losses was largely offset by fewer cargo deliveries and the impact of reduced margins, predominantly as a result of the pricing change on cargoes delivered to Chile.
During the half year, BG Group delivered 88 LNG cargoes, 11 fewer than in the first half of 2012, due to the disruptions in Nigeria, which lead to the loss of three cargoes, fewer spot cargoes and reduced liftings from Egypt. First half cargo deliveries comprised 58 to Asia, 22 to South America, five to the USA, two to Europe and one to Mexico(2012: 61 Asia, 26 South America, nine USA and three Europe).
BG Group reiterates its 2013 LNG Shipping & Marketing total operating profit guidance range of $2.5 billion to $2.7 billion despite the disruptions in Nigeria which have resulted in the loss of five cargoes so far this year, including two in July, and lower volumes from Egyptian LNG. The current outlook assumes a reduction in Egyptian domestic diversions in the fourth quarter, the receipt of the two net allocated compensatory cargoes from Qatar and no further disruptions affecting Nigeria LNG.
Interim Management Report
This results announcement also represents BG Group's half-yearly financial report for the purposes of the Disclosure and Transparency Rules (DTR) made by the UK Financial Conduct Authority. In order to comply with the requirements of the DTR, this announcement must contain an Interim Management Report which must include (a) an indication of the important events that have occurred during the first six months of the financial year, and their impact on the condensed set of financial statements, and (b) a description of the principal risks and uncertainties for the remaining six months of the financial year. The principal risks and uncertainties for the remaining six months of the financial year are set out on pages 13 to 15. The important events that occurred during the first six months of the year are set out on pages 1 to 9 and should be read in conjunction with the important events that occurred during the first quarter of the year as set out in BG Group's First Quarter Results released on 2 May 2013. The relevant sections of the Group's First Quarter Results are repeated below without amendment. Where necessary, further updates have been provided in the Second Quarter Business Highlights on pages 5 to 6. Together with the Principal Risks and Uncertainties on pages 13 to 15 they form BG Group's Interim Management Report for the purposes of the DTRs.
First quarter business highlights Australia Good progress continues to be made on Queensland Curtis LNG (QCLNG) with Phase 1 of the project on track for both first LNG in 2014 and the $20.4 billion cost estimate. In the upstream, despite severe wet weather throughout the quarter, the pace of drilling was good with 126 wells drilled against a target of 130. With better weather in April and 11 rigs in operation, the Group is now back on schedule. Construction of the pipeline infrastructure achieved a critical milestone in February when the 2.3 kilometreNarrows Crossing pipeline was laid across Gladstone harbour without injury or incident. This was a significant engineering achievement being Australia's longest large-diameter underwater pipe-pull, and it is the first pipeline to connect Curtis Island with the mainland. While the severe weather and flooding slowed pipeline construction, those activities are back to a normal level, and the Group expects to make up lost time in the coming months. More than90% of the 200 kilometre gas collection system is now in the ground and has been backfilled. Around 80% of the mainline welding for the 340 kilometre export pipeline is complete, with around 60% of the pipeline lowered into the ground. On Curtis Island, the liquefaction plant and common facilities are on track. The 900 tonne steel dome roof was raised to the top of the first LNG storage tank in February. Additionally, all 62 modules required for Train 1 have been delivered, and the remaining 18 modules that support Train 2 are scheduled to be delivered by year end. Brazil Development in the Santos Basin proceeded as expected with the delivery of the second of 15 planned floating production, storage and offloading (FPSO) vessels. The FPSO Cidade de São Paulo (FPSO 2) came onstream on the Sapinhoá field in January on time and on budget. Following commissioning of the gas processing and reinjection systems in April, the facility is producing around 25 000 barrels of oil equivalent per day (boed). Gross production from BG Group's first two FPSOs increased to around 140 000 boed during April. In February, an extended well test started in the Sapinhoá North area of the BM-S-9 concession using the FPSO Cidade de São Vicente. The FPSO will operate for up to six months, gathering technical information on reservoir behaviour and oil flow in the subsea lines, among other data, in preparation for the northern development. During this initial test phase the well is expected to produce around 15 000 barrels of oil per day (bopd). Development of the remainder of the FPSO fleet remains on track, with FPSO 3 moored on location scheduled for start-up on the Lula field as planned in the second quarter. Work continues on FPSOs 4 and 5 planned for Sapinhoá and Iracema respectively, with one en route to Brazil. Both FPSOs are on budget and are around 60% complete, ahead of planned start-up in 2014.
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First quarter business highlights continued Brazil continued To ensure continued timely delivery of the pre-salt development programme, BG Group and partners in BM-S-11 signed letters of intent to charter two FPSOs for deployment at Lula Alto and Lula Central. These FPSOs will replace the last two of the eight replicant FPSOs. The two new chartered FPSOs are planned to commence production in the first quarter of 2016, each with capacity of 150 000 bopd and 212 million standard cubic feet per day (mmscfd) of natural gas. Further exploration and appraisal activity is also being undertaken in the Santos Basin. In February, BG Group made a discovery with the Sagitário well, the first to be drilled on the BM-S-50 concession. The well confirmed the presence of good quality oil and continues to be drilled to evaluate deeper targets. On BM-S-11, the Iara appraisal programme continues with the drilling of the Iara-4 well. Initial results have confirmed good quality oil in the reservoirs. Egypt In February, BG Group and its partner approved the next phase of development for the West Delta Deep Marine concession (WDDM), offshore the Nile Delta. The Phase 9a development is one element of the recovery plan for arresting production decline in the WDDM concession. Drilling has now commenced, with first production in 2014. Phase 9a includes drilling nine new wells during 2013 and 2014 as part of a wider plan for new wells in the field. As at 31 March 2013, the Group's receivable balance from Egypt General Petroleum Corporation (EGPC) in respect of domestic gas sales was $1.2 billion, a reduction of $0.1 billion from year end. The overdue balance remained at$0.6 billion. Based on repayment terms agreed with EGPC, the Group expects this balance and all future forecast receivables to be current by 2017, in line with previous guidance. However, the recovery of receivables in this timeframe, and the full realisation of the carrying value of the Group's Egyptian operations, remain dependent on the business environment in Egypt, which BG Group continues to monitor closely. Honduras In April, BG Group signed an Operating Contract, subject to approval by the National Congress, for an exploration licence covering approximately 35 000 square kilometres, offshore Honduras. India In March, BG Group continued its expansion in Asia-Pacific markets with the completion of an agreement for thelong-term sale of LNG to Gujarat State Petroleum Corporation Limited (GSPC) in India, concluding negotiations announced in September 2011. The Group will supply GSPC with 1.25 mtpa of LNG for 20 years beginning in 2015, potentially increasing to 2.5 mtpa after two years. GSPC will be supplied from the Group's global LNG portfolio. Tanzania The Group continued its successful exploration and appraisal record offshore Tanzania with the completion in March of its appraisal programme on the Jodari field in Block 1. The drill stem test on the original gas discovery well confirmed the excellent quality of the Tertiary reservoir, which flowed at a maximum rate of 70 mmscfd. The results, which were constrained by the test equipment, showed better than expected reservoir properties, including high connectivity, and demonstrated that future development wells could produce at higher rates. In April, a further successful drill stem test was also completed on the Mzia-2 well in Block 1. The test flowed at57 mmscfd, constrained by equipment, indicating better than expected reservoir properties and demonstrating the potential of the deeper Cretaceous play. The drillship Deepsea Metro-1 is now drilling the Ngisi-1 prospect in Block 4 and will subsequently appraise the easterly extension of the Chewa discovery. Further 3-D seismic data has now been acquired, and this data, along with results from the current drilling programme, will be used to develop the next exploration and appraisal campaign expected to commence later in 2013.
First quarter business highlights continued United Kingdom In March, the non-operated Elgin/Franklin area resumed operations with three wells back onstream, having beenshut down since March 2012 due to a gas leak on the G4 well. However, it is not expected to recover to preshut-down production levels until 2015, which will require new infill wells to be drilled. Additionally, the Everest East expansion project started production in March. The development comprises twosub-sea wells tied back to the North Everest platform. It is expected that the project will provide initial peak production of more than 10 000 boed with total gross reserves of around 20 million boe. All modules on the Jasmine project have now been installed on location ahead of schedule, substantially de-risking the project prior to start-up in the fourth quarter. Portfolio rationalisation programme In the quarter, BG Group signed and completed a sale and purchase agreement with EXCO Resources for the divestment of all its interests in the non-core conventional producing assets and acreage in the Cotton Valley formation in East Texas and North Louisiana for approximately $131 million. The net contribution to BG Group expected from these assets in 2013 was 3 000 boed. Board changesIn February, Fabio Barbosa was appointed Chairman BG South America, reporting to Chief Executive Chris Finlayson. Mr. Barbosa stepped down as Chief Financial Officer (CFO) and Executive Director. Den Jones,BG Group Financial Controller, who acted as Mr. Barbosa's alternate director during his leave of absence, was appointed a director of BG Group plc. Mr. Jones will continue as Interim CFO pending the conclusion of a succession process for the role of CFO, which encompasses both internal and external candidates. In February, Philippe Varin stepped down from the Board after almost seven years as a Non-Executive Director. In March, Lim Haw-Kuang was appointed as a Non-Executive Director, filling the vacancy left by Mr. Varin.Mr. Lim is the former Executive Chairman of Shell companies in China.
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Principal Risks and Uncertainties Overview This section forms part of the interim management review for the purposes of the Disclosure and Transparency rules made by the UK Financial Conduct Authority. BG Group's business, results and financial condition could be affected by a broad range of risks and uncertainties.BG Group's risk profile continually evolves over time as a result of changes in both the external environment and the continued growth and development of the Group's portfolio. The principal risks and uncertainties facing the Group are set out on pages 32 to 37 of the Annual Report and Accounts 2012 (ARA). These remain largely unchanged and are summarised (for reference) on pages 14 to 15 of this release. This summary is not intended, and should not be used, as a substitute for reading the appropriate pages of the ARA, which include further commentary on the risks and the Group's management of them. In accordance with DTR 4.2.7, the Group's principal risks and uncertainties for the remaining six months of the financial year are set out below. Egypt At its first quarter 2013 results, BG Group highlighted the enhanced political risk in Egypt and the potential for additional gas to be diverted to the domestic market and away from LNG exports. A further update is given onpages 5 to 6. The environment for investment in Egypt is clearly challenging. The recovery of receivables and the full realisation of the carrying value of the Group's Egyptian operations remain dependent on the business environment in Egypt, which BG Group continues to monitor closely. Global LNG Repeated disruptions at Nigeria LNG since the beginning of the year due to pipeline attacks and a maritime blockade have resulted in the loss of five cargoes, two in July. Whilst BG Group resumed lifting LNG cargoes from Nigeria in late July, any further disruptions in the remainder of the year could put downward pressure on the profitability of the LNG segment. Major growth projects Successful delivery of major projects is critical to BG Group's future growth. Substantial delay to, or failure to complete, these projects constitutes significant risks to the Group's prospects, reputation and financial position. Delivering major growth projects in Australia and Brazil safely, to schedule and on budget, while optimising operational performance and output from existing producing base assets, continues to be the critical success factor for the Group for the rest of 2013. The level of inherent risk associated with some of these developments is high given their scale, the use of innovative technological solutions and the fact that some developments are being delivered in anon-operated environment. Notwithstanding these risks, we continue to make good progress against our plans and remain on time and on budget in both Brazil and Australia. Brazil The ramp up of production in Brazil in the second half of 2013 remains a key area of focus for the Group as new wells are hooked-up and brought online. The installation and operation of critical items such as the Buoyancy Supported Risers (BSRs) could be affected by a range of events such as adverse weather conditions. These events may have a material impact on the ability to ramp up production as planned. Even though many of these events are not withinBG Group's control, the consortium is continuously monitoring the conditions for the installation and operation of critical items and seeking to mitigate any potential risks where possible. Australia Whilst the QCLNG project remains on track for first LNG in 2014 and the Phase 1 $20.4 billion budget, there are a number of project milestones to be met for the timely and on budget delivery of the project. During the remainder of 2013, the focus will be on delivering the Ruby central processing plant, the export pipeline and the field compressor stations as well as continuing to make progress with our drilling programme and the LNG plant.
Principal Risks and Uncertainties continued Other 2013 milestones The Group remains on course to deliver its previously published 2013 project delivery milestones, including those relating to Bongkot North Phase 3k, Jasmine and Margarita Phase 2. As with all projects, there are various inherent risks which could impact our ability to deliver these projects safely, to schedule and within budget. The summary of the Principal Risks and Uncertainties on pages 14 to 15 highlights some of these inherent risks (see 'Delivery of Projects'). Operational performance Optimising the operational performance and output from our existing producing base assets is also vital for the Group, not least from a cash flow and funding perspective as the Group continues to execute its major capital projects. The summary of Principal Risks and Uncertainties below highlights some of the inherent risks to sustaining optimal operational performance (see 'Operational performance'). Any unplanned shutdowns due to asset integrity issues or time overruns of scheduled shutdowns may cause material deferrals of production in our portfolio in the remainder of 2013. In the remainder of 2013 there will be further planned shutdowns in assets in our portfolio, notably in the UK. Effective planning and execution of these shutdowns will be important if the Group is to deliver levels of production planned in the second half of the year. Summary of Principal Risks and Uncertainties Asset Integrity and HSSE Major accidents or incidents may occur, resulting in: possible loss of life of, or injury to, members of the public, employees of BG Group or the Group's contractors; damage to the environment; and damage and/or loss of certain facilities, with an associated loss or deferment of production and revenues and/or delay or cancellation of exploration activities. The Group may also incur costs associated with mitigation, recovery and compensation. BG Group is also subject to health and safety laws in numerous jurisdictions around the world. BG Group is exposed to security threats. Acts of terrorism, piracy or civil unrest, which may affect the Group's employees and contractors, plants and offices, pipelines, transportation or computer systems, could severely disrupt its business and could cause harm to people and the environment. Attacks on the Group's computer networks and breaches of information security may also result in the loss of commercially sensitive data. Capital requirements, liquidity and interest rates BG Group's ability to deliver its business and growth objectives is dependent on its ability to fund capital intensive development projects, at present most notably in Australia and Brazil. BG Group is also exposed to liquidity risks, including risks associated with refinancing borrowings as they mature, and the risk that financial assets cannot readily be converted to cash without loss of value. BG Group's financing costs may be significantly affected by interest rate volatility. Climate change Policy approaches that promote the use of alternative energy sources, such as renewables and nuclear power, may affect BG Group's ability to maintain its position in key markets. Commodity prices BG Group's cash flows and profitability are sensitive to commodity prices for crude oil, natural gas, LNG and other hydrocarbons. Among the commodities, oil prices are by far the dominant driver of BG Group's profitability. The Group does not, as a matter of course, hedge all commodity prices, but may hedge certain LNG contracts and other revenue streams from time to time. Credit BG Group's exposure to credit risk takes the form of a loss that would be recognised if counterparties (including sovereign entities) failed or were unable to meet their payment or performance obligations. The Group is also exposed to political and economic risk events that may exacerbate country risk and which may cause non-payment of foreign currency obligations to BG Group by governments or government-owned entities, or which may otherwise impact successful project delivery and implementation.
Principal Risks and Uncertainties continued Delivery of projects Successful delivery of major projects is material to the Group's future growth and substantial delays to, or failure to complete, these projects constitute significant threats to the Group's prospects, reputation and financial position. Significant risks include adverse or extreme weather conditions, sub-surface uncertainties, inadequate scope definition at sanction, insufficient availability or ineffective deployment of resources, competing demands for contractor resources and services, the performance of BG Group's non-controlled joint venture (NCJV) partners and/or contractors, the uncertainties arising from the application of new technology, commercial (re-)negotiations, conflicts of objectives and priorities with partners or other stakeholders, environmental factors, permitting, compliance with governmental and regulatory requirements, and a deterioration of macroeconomic conditions. Environment BG Group's activities may adversely affect the environment through the release of hydrocarbons or chemicals,noise pollution, management of produced water, the visual impact of gas and oil infrastructure and the emission of pollutants. Release of hydrocarbons may result in significant fines, liabilities or other losses. Exchange rates Whilst BG Group reports its financial results in US Dollars, a portion of the Group's operating cash flows, capital expenditure and income taxes accrue in (and asset and liability positions are held in) other currencies, including the Australian Dollar (primarily QCLNG project capital expenditure), Brazilian Real (primarily Santos Basin developments capital expenditure) and Pound Sterling. Licence to operate and the political context Governments, legislators and/or regulators may act or intervene (or fail to act or intervene) in a way that diminishes or destroys value for BG Group. Governments may expropriate assets or property, or alter fiscal or other terms governing oil and gas industry operations, and they may also act (or fail to act) in a way that delays project schedules or increases costs, thus eroding value. Operational performance BG Group's production volumes, and therefore revenues, are dependent on the continued operational performance of its producing assets. Those producing assets may not deliver the volumes assumed in the business plan for a number of reasons, including limiting factors relating to reservoir and well performance, and facility, export and commercial capacity. Other factors affecting operational performance include unplanned shutdowns, asset integrity and health, safety, security and environment (HSSE) incidents, exposure to natural hazards such as extreme weather events, and political or security events that disrupt the ability of staff and contractors to work. Organisational capacity BG Group's performance, operating results and future growth depend on its ability to attract, retain, motivate and organise people with the appropriate level of expertise and knowledge, as BG Group pursues its objectives. Regulation, legislation and litigation BG Group's business activities are conducted in many different countries and are therefore subject to a broad range of such legislation and regulations. Any non-compliance with applicable laws and/or regulations (or new or changed interpretations or enforcement of existing laws or regulations) could lead to regulatory investigations, litigation and/or legal or regulatory sanctions (including financial penalties and the curtailment or cessation of operations), as well as reputational damage. Resources discovery, estimation and development There may be insufficient addition of new resources and reserves to enable future economically viable production and to fuel BG Group's production growth. Exploration and development activity may also be constrained by unexpected drilling conditions, poor availability of suitable rigs and restrictions on the availability of suitable human or technical resources. A decline in the price of oil or gas may make reserves and/or resources, previously deemed to be recoverable, uneconomic to develop. Furthermore, changes to gas and oil prices in fields subject to production sharing contracts may result in revised entitlements.
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Statement of Directors' responsibilities
The Directors' confirm that this condensed set of financial statements has been prepared in accordance with IAS 34 'Interim Financial Statements' as adopted by the European Union, and that the interim management report herein includes a fair review of the information required by the Disclosure and Transparency Rules 4.2.7 and 4.2.8. The Directors of BG Group plc are listed in the 2012 Annual Report and Accounts. By order of the Board Chris Finlayson 25 July 2013Chief Executive
Den Jones 25 July 2013 Interim Chief Financial Officer |
Legal Notice
Certain statements included in these results contain forward-looking information concerning BG Group's strategy, operations, financial performance or condition, outlook, growth opportunities or circumstances in the countries, sectors or markets in which BG Group operates. By their nature, forward-looking statements involve uncertainty because they depend on future circumstances, and relate to events, not all of which are within BG Group's control or can be predicted by BG Group. Although BG Group believes that the expectations and opinions reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations and opinions will prove to have been correct. Actual results and market conditions could differ materially from those set out in the forward-looking statements. For a detailed analysis of the factors that may affect our business, financial performance or results of operations, we urge you to look at the 'Principal risks and uncertainties' included in BG Group plc's Annual Report and Accounts 2012. No part of these results constitutes, or shall be taken to constitute, an invitation or inducement to invest in BG Group plc or any other entity, and must not be relied upon in any way in connection with any investment decision. BG Group undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent legally required. Key Assumptions REFERENCE CONDITIONS • Brent Oil price real (1/1/2013): 2013: $100/bbl • US Henry Hub real (1/1/2013): 2013: $3.5/mmbtu • US/UK exchange rates of $1.6:£1 • US/AUD exchange rates of $1:$A1 • US/BRL exchange rates of $1:BRL1.90 • Prepared under International Financial Reporting Standards • All production includes fuel gas |
Going Concern
The Directors are satisfied that the Group's activities are sustainable for the foreseeable future, and that the business is a going concern and the financial statements have therefore been prepared on this basis. |
Related Parties
Information on related party transactions is provided in note 12, page 35. |
Presentation of Non-GAAP measures
Business Performance'Business Performance' excludes discontinued operations and disposals, certain re-measurements and impairments (see below) as exclusion of these items provides a clear and consistent presentation of the underlying operating performance of the Group's ongoing business. BG Group uses commodity instruments to manage price exposures associated with its marketing and optimisation activity. This activity enables the Group to take advantage of commodity price movements. It is considered more appropriate to include both unrealised and realised gains and losses arising from the mark-to-market of derivatives associated with this activity in 'Business Performance'. Disposals, certain re-measurements and impairmentsBG Group's commercial arrangements for marketing gas include the use of long-term gas sales contracts. Whilstthe activity surrounding these contracts involves the physical delivery of gas, certain gas sales contracts are classified as derivatives under the rules of IAS 39 and are required to be measured at fair value at the balance sheet date. Unrealised gains and losses on these contracts reflect the comparison between current market gas prices and the actual prices to be realised under the gas sales contract and are disclosed separately as 'disposals,re-measurements and impairments'. BG Group also uses commodity instruments to manage certain price exposures in respect of optimising the timing and location of its physical gas and LNG sales commitments. These instruments are also required to be measuredat fair value at the balance sheet date under IAS 39 and where practical have been designated as formal hedges. However, IAS 39 does not always allow the matching of fair values to the economically hedged value of the related commodity, resulting in unrealised movements in fair value being recorded in the income statement. These movements in fair value, together with any unrealised gains and losses associated with discontinued hedge accounting relationships that continue to represent economic hedges, are disclosed separately as 'disposals,re-measurements and impairments'. BG Group also uses financial instruments, including derivatives, to manage foreign exchange and interest rate exposure. These instruments are required to be recognised at fair value or amortised cost on the balance sheet in accordance with IAS 39. Most of these instruments have been designated either as hedges of foreign exchange movements associated with the Group's net investments in foreign operations, or as hedges of interest rate risk. Where these instruments represent economic hedges but cannot be designated as hedges under IAS 39, unrealised movements in fair value, together with foreign exchange movements associated with the underlying borrowings and foreign exchange movements on monetary items that form part of the Group's net investment in foreign operations, are recorded in the income statement and disclosed separately as 'disposals, re-measurements and impairments'. Realised gains and losses relating to the instruments referred to above are included in Business Performance. This presentation best reflects the underlying performance of the business since it distinguishes between the temporary timing differences associated with re-measurements under IAS 39 rules and actual realised gains and losses. BG Group has also separately identified profits and losses associated with the disposal of non-current assets, impairments of non-current assets and certain other exceptional items, as they require separate disclosure in order to provide a clearer understanding of the results for the period. For a reconciliation between the overall results and Business Performance and details of disposals,re-measurements and impairments, see the consolidated income statement (page 19), note 2 (page 27) and note 3 (page 28). Joint ventures and associatesUnder IFRS, the results from jointly controlled entities (joint ventures) and associates, accounted for under the equity method, are required to be presented net of finance costs and tax on the face of the income statement. Given the relevance of these businesses within BG Group, the results of joint ventures and associates are presented before interest and tax, and after tax. This approach provides additional information on the source of BG Group's operating profits. For a reconciliation between operating profit and earnings including and excluding the results of joint ventures and associates, see note 3 (page 28). Net borrowingsBG Group provides a reconciliation of net borrowings and an analysis of the amounts included within net borrowings as this is an important liquidity measure for the Group. |
Independent review report to BG Group plc
Introduction
We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2013, which comprises the Consolidated Income Statement, Consolidated Statement of Comprehensive Income, Consolidated Balance Sheet, Consolidated Statement of Changes in Equity, Consolidated Cash Flow Statement and Notes 1 to 12. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.
This report is made solely to the company in accordance with guidance contained in International Standard on Review Engagements 2410 (UK and Ireland) "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board (ISRE 2410). To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our work, for this report, or for the conclusions we have formed.
Directors' Responsibilities
The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.
As disclosed in note 1, the annual financial statements of the group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting", as adopted by the European Union.
Our Responsibility
Our responsibility is to express to the company a conclusion on the condensed set of financial statements in the half yearly financial report based on our review.
Scope of Review
We conducted our review in accordance with ISRE 2410. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2013 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.
Ernst & Young LLP
London
25 July 2013
Consolidated Income Statement
Second Quarter
|
|
| 2013 |
| 2012 Restated(a) |
| ||||
|
| Notes | Business Perform-ance(b)$m | Disposals, re-measure-ments and impairments(Note 2)(b)$m | TotalResult$m |
| Business Perform-ance(b)$m | Disposals,re-measure-ments and impairments(Note 2)(b)$m | TotalResult$m |
|
| Group revenue |
| 4 406 | - | 4 406 |
| 4 644 | - | 4 644 |
|
| Other operating income | 2 | (45) | 67 | 22 |
| 18 | 203 | 221 |
|
| Group revenue and other operating income | 3 | 4 361 | 67 | 4 428 |
| 4 662 | 203 | 4 865 |
|
| Operating costs |
| (2 721) | - | (2 721) |
| (2 897) | - | (2 897) |
|
| Profits and losses on disposal of non-current assets and impairments | 2 | - | (333) | (333) |
| - | (1 510) | (1 510) |
|
| Operating profit/(loss)(c) | 3 | 1 640 | (266) | 1 374 |
| 1 765 | (1 307) | 458 |
|
| Finance income | 2, 4 | 42 | 57 | 99 |
| 27 | 141 | 168 |
|
| Finance costs | 2, 4 | (62) | (67) | (129) |
| (43) | (132) | (175) |
|
| Share of post-tax results from joint venturesand associates | 3 | 103 | - | 103 |
| 68 | - | 68 |
|
| Profit/(loss) before tax |
| 1 723 | (276) | 1 447 |
| 1 817 | (1 298) | 519 |
|
| Taxation | 2, 5 | (737) | 123 | (614) |
| (797) | 258 | (539) |
|
| Profit/(loss) for the period from continuing operations | 3 | 986 | (153) | 833 |
| 1 020 | (1 040) | (20) |
|
| Profit/(loss) for the period from discontinued operations | 6 | - | 266 | 266 |
| - | 314 | 314 |
|
| Profit/(loss) for the period |
| 986 | 113 | 1 099 |
| 1 020 | (726) | 294 |
|
| Attributable to: |
|
|
|
|
|
|
|
|
|
| BG Group shareholders (earnings) |
| 986 | 108 | 1 094(d) |
| 1 020 | (740) | 280(d) |
|
| Non-controlling interest |
| - | 5 | 5 |
| - | 14 | 14 |
|
|
|
| 986 | 113 | 1 099 |
| 1 020 | (726) | 294 |
|
| Earnings per share continuing operations - basic | 7 | 29.0c | (4.5c) | 24.5c |
| 30.0c | (30.6c) | (0.6c) |
|
| Earnings per share discontinued operations - basic |
| - | 7.7c | 7.7c |
| - | 8.8c | 8.8c |
|
| Earnings per share continuing operations - diluted | 7 | 28.8c | (4.4c) | 24.4c |
| 29.9c | (30.5c) | (0.6c) |
|
| Earnings per share discontinued operations - diluted |
| - | 7.6c | 7.6c |
| - | 8.8c | 8.8c |
|
| Total operating profit/(loss) including share of pre-tax operating results from joint ventures and associates(e) | 3 | 1 788 | (266) | 1 522 |
| 1 875 | (1 307) | 568 |
|
a) See note 1 (page 25).
b) See Presentation of Non-GAAP measures (page 17) for an explanation of results excluding disposals, certain re-measurements and impairments and presentation of the results of joint ventures and associates.
c) Operating profit/(loss) is before share of results from joint ventures and associates.
d) Comprises earnings from continuing operations of $833 million (2012 $20 million loss) and from discontinued operations of $261 million (2012 $300 million).
e) This measurement is shown by BG Group as it is used as a means of measuring the underlying performance of the business.
The notes on pages 25 to 35 form an integral part of these condensed financial statements.
Consolidated Income Statement
Half Year
|
|
| 2013 |
| 2012 Restated(a) |
| ||||
|
| Notes | Business Perform-ance(b)$m | Disposals, re-measure-ments and impairments(Note 2)(b)$m | TotalResult$m |
| Business Perform-ance(b)$m | Disposals,re-measure-ments and impairments(Note 2)(b)$m | TotalResult$m |
|
| Group revenue |
| 9 316 | - | 9 316 |
| 9 525 | - | 9 525 |
|
| Other operating income | 2 | (38) | 160 | 122 |
| 13 | 150 | 163 |
|
| Group revenue and other operating income | 3 | 9 278 | 160 | 9 438 |
| 9 538 | 150 | 9 688 |
|
| Operating costs |
| (5 620) | - | (5 620) |
| (5 642) | - | (5 642) |
|
| Profits and losses on disposal of non-current assets and impairments | 2 | - | (323) | (323) |
| - | (1 511) | (1 511) |
|
| Operating profit/(loss)(c) | 3 | 3 658 | (163) | 3 495 |
| 3 896 | (1 361) | 2 535 |
|
| Finance income | 2, 4 | 71 | 189 | 260 |
| 74 | 138 | 212 |
|
| Finance costs | 2, 4 | (119) | (267) | (386) |
| (96) | (152) | (248) |
|
| Share of post-tax results from joint ventures and associates | 3 | 183 | - | 183 |
| 149 | - | 149 |
|
| Profit/(loss) before tax |
| 3 793 | (241) | 3 552 |
| 4 023 | (1 375) | 2 648 |
|
| Taxation | 2, 5 | (1 624) | 113 | (1 511) |
| (1 778) | 280 | (1 498) |
|
| Profit/(loss) for the period from continuing operations | 3 | 2 169 | (128) | 2 041 |
| 2 245 | (1 095) | 1 150 |
|
| Profit/(loss) for the period from discontinued operations | 6 | - | 269 | 269 |
| - | 381 | 381 |
|
| Profit/(loss) for the period |
| 2 169 | 141 | 2 310 |
| 2 245 | (714) | 1 531 |
|
| Attributable to: |
|
|
|
|
|
|
|
|
|
| BG Group shareholders (earnings) |
| 2 169 | 132 | 2 301(d) |
| 2 245 | (748) | 1 497(d) |
|
| Non-controlling interest |
| - | 9 | 9 |
| - | 34 | 34 |
|
|
|
| 2 169 | 141 | 2 310 |
| 2 245 | (714) | 1 531 |
|
| Earnings per share continuing operations - basic | 7 | 63.8c | (3.8c) | 60.0c |
| 66.1c | (32.2c) | 33.9c |
|
| Earnings per share discontinued operations - basic |
| - | 7.6c | 7.6c |
| - | 10.2c | 10.2c |
|
| Earnings per share continuing operations - diluted | 7 | 63.5c | (3.8c) | 59.7c |
| 65.7c | (32.0c) | 33.7c |
|
| Earnings per share discontinued operations - diluted |
| - | 7.6c | 7.6c |
| - | 10.2c | 10.2c |
|
| Total operating profit/(loss) including share of pre-tax operating results from joint ventures and associates(e) | 3 | 3 935 | (163) | 3 772 |
| 4 135 | (1 361) | 2 774 |
|
a) See note 1 (page 25).
b) See Presentation of Non-GAAP measures (page 17) for an explanation of results excluding disposals, certain re-measurements and impairments and presentationof the results of joint ventures and associates.
c) Operating profit/(loss) is before share of results from joint ventures and associates.
d) Comprises earnings from continuing operations of $2 041 million (2012 $1 150 million) and from discontinued operations of $260 million (2012 $347 million).
e) This measurement is shown by BG Group as it is used as a means of measuring the underlying performance of the business.
The notes on pages 25 to 35 form an integral part of these condensed financial statements.
For information on dividends paid in the period, see note 9 (page 34).
Consolidated Statement of Comprehensive Income
Second Quarter |
|
| Half Year | ||
2013 $m | 2012 Restated(a)$m |
|
| 2013 $m | 2012 Restated(a)$m |
1 099 | 294 |
| Profit for the period | 2 310 | 1 531 |
|
|
|
|
|
|
|
|
| Other comprehensive income: |
|
|
|
|
| Items that may be reclassified to the income statement: |
|
|
84 | (19) |
| Hedge adjustments net of tax(b) | (484) | 108 |
(9) | (54) |
| Fair value movements on 'available-for-sale' assets net of tax(c) | (20) | (9) |
(1 870) | (540) |
| Currency translation adjustments | (1 060) | (585) |
|
|
|
|
|
|
|
|
| Other items: |
|
|
16 | (40) |
| Re-measurement of defined benefit pension obligation net of tax(d) | (25) | 40 |
(1 779) | (653) |
| Other comprehensive expense net of tax | (1 589) | (446) |
|
|
|
|
|
|
(680) | (359) |
| Total comprehensive income/(expense) for the period | 721 | 1 085 |
|
|
|
|
|
|
|
|
| Attributable to: |
|
|
(685) | (348) |
| BG Group shareholders | 712 | 1 070 |
5 | (11) |
| Non-controlling interest | 9 | 15 |
(680) | (359) |
|
| 721 | 1 085 |
a) See note 1 (page 25).
b) Income tax relating to hedge adjustments is a $26 million charge for the quarter (2012 $7 million credit) and a $144 million credit for the half year (2012 $50 million charge).
c) Income tax relating to fair value movements on 'available-for-sale' assets is $nil for the quarter (2012 $24 million credit) and $nil for the half year (2012 $4 million credit).
d) Income tax relating to the re-measurement of defined benefit pension obligations is a $4 million charge for the quarter (2012 $11 million credit) and a $8 million credit for the half year (2012 $15 million charge).
The notes on pages 25 to 35 form an integral part of these condensed financial statements.
Consolidated Balance Sheet
| As at30 Jun2013 $m | As at31 Dec2012 Restated(a) $m | As at 30 Jun2012 Restated(a)$m |
Assets |
|
|
|
Non-current assets |
|
|
|
Goodwill | 22 | 24 | 26 |
Other intangible assets | 4 394 | 4 469 | 4 545 |
Property, plant and equipment | 45 184 | 43 925 | 38 974 |
Investments | 2 867 | 2 488 | 2 335 |
Deferred tax assets | 1 002 | 821 | 1 075 |
Trade and other receivables | 788 | 896 | 894 |
Commodity contracts and other derivative financial instruments | 376 | 532 | 379 |
| 54 633 | 53 155 | 48 228 |
Current assets |
| ||
Inventories | 873 | 792 | 722 |
Trade and other receivables | 6 401 | 6 369 | 6 656 |
Current tax receivable | 25 | 25 | 140 |
Commodity contracts and other derivative financial instruments | 49 | 129 | 223 |
Cash and cash equivalents | 4 705 | 4 434 | 5 332 |
| 12 053 | 11 749 | 13 073 |
Assets classified as held for sale | - | 386 | 3 108 |
Total assets | 66 686 | 65 290 | 64 409 |
|
| ||
Liabilities |
| ||
Current liabilities |
| ||
Borrowings | (1 044) | (1 064) | (600) |
Trade and other payables | (5 816) | (5 301) | (5 330) |
Current tax liabilities | (1 761) | (1 377) | (1 483) |
Commodity contracts and other derivative financial instruments | (316) | (423) | (889) |
| (8 937) | (8 165) | (8 302) |
Non-current liabilities |
| ||
Borrowings | (15 258) | (14 443) | (15 031) |
Trade and other payables | (167) | (123) | (181) |
Commodity contracts and other derivative financial instruments | (157) | (347) | (754) |
Deferred income tax liabilities | (4 606) | (4 636) | (4 309) |
Retirement benefit obligations | (313) | (288) | (281) |
Provisions for other liabilities and charges | (4 070) | (4 182) | (3 624) |
| (24 571) | (24 019) | (24 180) |
Liabilities associated with assets classified as held for sale | (12) | (158) | (1 733) |
Total liabilities | (33 520) | (32 342) | (34 215) |
Net assets | 33 166 | 32 948 | 30 194 |
Equity |
| ||
Total shareholders' equity | 33 166 | 32 891 | 29 900 |
Non-controlling interest in equity | - | 57 | 294 |
Total equity | 33 166 | 32 948 | 30 194 |
a) See note 1 (page 25).
The notes on pages 25 to 35 form an integral part of these condensed financial statements.
Consolidated Statement of Changes in Equity
|
| Called up share capital$m | Share premium account $m | Hedging reserve$m | Translation reserve$m | Other reserves$m | Retained earnings$m | Total$m | Non-con-trolling interest$m | Total$m |
| Equity as at 31 December 2012 as previously reported | 578 | 619 | (191) | 1 934 | 2 710 | 27 387 | 33 037 | 57 | 33 094 |
| Impact of change in accounting policy(a) | - | - | - | (7) | - | (139) | (146) | - | (146) |
| Equity as at 31 December 2012 (restated) | 578 | 619 | (191) | 1 927 | 2 710 | 27 248 | 32 891 | 57 | 32 948 |
| Total comprehensive income for the period | - | - | 115 | (1 659) | - | 2 256 | 712 | 9 | 721 |
| Issue of shares | - | 19 | - | - | - | - | 19 | - | 19 |
| Purchase of own shares | - | - | - | - | - | (13) | (13) | - | (13) |
| Adjustment in respect of employee share schemes | - | - | - | - | - | 61 | 61 | - | 61 |
| Disposal of non-controlling interest | - | - | - | - | - | - | - | (66) | (66) |
| Dividends on ordinary shares | - | - | - | - | - | (504)(b) | (504) | - | (504) |
| Equity as at 30 June 2013 | 578 | 638 | (76) | 268 | 2 710 | 29 048 | 33 166 | - | 33 166 |
|
|
|
|
|
|
|
|
|
|
|
|
| Called up share capital$m | Share premium account $m | Hedging reserve$m | Translation reserve$m | Other reserves$m | Retained earnings$m | Total$m | Non-con-trolling interest$m | Total$m |
| Equity as at 31 December 2011 as previously reported | 577 | 584 | (642) | 2 508 | 2 710 | 23 647 | 29 384 | 291 | 29 675 |
| Impact of change in accounting policy(a) | - | - | - | 1 | - | (165) | (164) | - | (164) |
| Equity as at 31 December 2011 (restated) | 577 | 584 | (642) | 2 509 | 2 710 | 23 482 | 29 220 | 291 | 29 511 |
| Total comprehensive income for the period | - | - | 161 | (619) | - | 1 528 | 1 070 | 15 | 1 085 |
| Issue of shares | - | 19 | - | - | - | - | 19 | - | 19 |
| Purchase of own shares | - | - | - | - | - | (16) | (16) | - | (16) |
| Adjustment in respect of employee share schemes | - | - | - | - | - | 50 | 50 | - | 50 |
| Dividends on ordinary shares | - | - | - | - | - | (443) | (443) | - | (443) |
| Dividends to non-controlling interest | - | - | - | - | - | - | - | (12) | (12) |
| Equity as at 30 June 2012 (restated) | 577 | 603 | (481) | 1 890 | 2 710 | 24 601 | 29 900 | 294 | 30 194 |
a) See note 1 (page 25).
b) Comprises $478 million in respect of the 2012 final dividend, and $26 million in respect of dividends attributable to holders of American Depositary Receipts in prior periods.
The notes on pages 25 to 35 form an integral part of these condensed financial statements.
Consolidated Cash Flow Statement
Second Quarter |
|
| Half Year | ||
2013 $m | 2012 Restated(a) $m |
|
| 2013 $m | 2012 Restated(a) $m |
|
|
| Cash flows from operating activities |
|
|
1 718 | 857 |
| Profit before tax(b) | 3 828 | 3 090 |
(103) | (80) |
| Share of post-tax results from joint ventures and associates | (183) | (161) |
755 | 673 |
| Depreciation of property, plant and equipment and amortisation of intangible assets | 1 499 | 1 314 |
(20) | (181) |
| Fair value movements in commodity based contracts | (95) | (176) |
88 | 1 257 |
| (Profits) and losses on disposal of non-current assets and impairments | 82 | 1 259 |
66 | 163 |
| Unsuccessful exploration expenditure written off | 71 | 203 |
(44) | (35) |
| Decrease in provisions for liabilities and retirement benefit obligations | (34) | (113) |
(100) | (158) |
| Finance income | (263) | (227) |
128 | 187 |
| Finance costs | 386 | 292 |
16 | 20 |
| Share-based payments | 36 | 40 |
268 | 418 |
| Decrease in working capital | 179 | 245 |
2 772 | 3 121 |
| Cash generated by operations | 5 506 | 5 766 |
(617) | (729) |
| Income taxes paid | (1 126) | (1 322) |
2 155 | 2 392 |
| Net cash inflow from operating activities | 4 380 | 4 444 |
|
|
| Cash flows from investing activities |
|
|
37 | 35 |
| Dividends received | 54 | 52 |
271 | 1 089 |
| Proceeds from disposal of property, plant and equipment, intangible assets and investments | 492 | 1 089 |
(2 375) | (2 305) |
| Purchase of property, plant and equipment and intangible assets | (4 917) | (4 734) |
- | (10) |
| Loans to joint ventures and associates | - | (11) |
1 | 55 |
| Repayments from joint ventures and associates | 47 | 354 |
(229) | (70) |
| Interests in subsidiaries, joint ventures and associates and other investments | (323) | (145) |
27 | (325) |
| Other loan repayments/(advances) | 54 | (325) |
(2 268) | (1 531) |
| Net cash outflow from investing activities | (4 593) | (3 720) |
|
|
| Cash flows from financing activities |
|
|
(218) | (179) |
| Net interest paid(c) | (238) | (229) |
(473) | (447) |
| Dividends paid | (474) | (448) |
- | (12) |
| Dividends paid to non-controlling interest | - | (13) |
1 136 | 1 688 |
| Net proceeds from issue and repayment of borrowings | 1 120 | 1 787 |
11 | 8 |
| Issue of shares | 19 | 19 |
- | - |
| Movements in own shares | (13) | (16) |
456 | 1 058 |
| Net cash inflow from financing activities | 414 | 1 100 |
343 | 1 919 |
| Net increase in cash and cash equivalents(d) | 201 | 1 824 |
4 387 | 3 496 |
| Cash and cash equivalents at beginning of period(e) | 4 520 | 3 601 |
(25) | (35) |
| Effect of foreign exchange rate changes | (16) | (45) |
4 705 | 5 380 |
| Cash and cash equivalents at end of period(e) | 4 705 | 5 380 |
The cash flows above are inclusive of discontinued operations (see note 6 page 32).
a) See note 1 (page 25).
b) Includes profit before tax from discontinued operations for the quarter of $271 million (2012 $338 million) and for the half year of $276 million (2012 $442 million).
c) Includes capitalised interest for continuing and discontinued operations for the quarter of $129 million (2012 $106 million) and for the half year of $262 million
(2012 $205 million).
d) Cash and cash equivalents comprise cash and short-term liquid investments that are readily convertible to cash.
e) The balance at 30 June 2013 includes cash and cash equivalents of $4 705 million (31 December 2012 $4 434 million; 30 June 2012 $5 332 million) and cash included within assets held for sale of $nil (31 December 2012 $86 million; 30 June 2012 $48 million).
The notes on pages 25 to 35 form an integral part of these condensed financial statements.
Notes
1. Basis of preparation
These primary statements are the condensed financial statements ('the financial statements') of BG Group plc for the quarter ended and the half year ended 30 June 2013. The financial statements do not comprise statutory accounts within the meaning of Section 434 of the Companies Act 2006, and should be read in conjunction with theAnnual Report and Accounts for the year ended 31 December 2012 which have been prepared in accordance with IFRS as adopted by the EU, as they provide an update of previously reported information. The latest statutory accounts delivered to the registrar were for the year ended 31 December 2012 which were audited by PricewaterhouseCoopers LLP and on which the Auditors' Report was unqualified and did not contain statements under Sections 498(2) or 498(3) of the Companies Act 2006. These financial statements have been prepared in accordance with IAS 34'Interim Financial Reporting' as adopted by the EU, the requirements of the Disclosure and Transparency Rules issued by the Financial Conduct Authority and the accounting policies, methods of computation and presentation as set out in the Annual Report and Accounts 2012, except as stated below.
The preparation of the financial statements requires management to make estimates and assumptions that affect the reported amount of revenues, expenses, assets and liabilities at the date of the financial statements. If in the future such estimates and assumptions, which are based on management's best judgement at the date of the financial statements, deviate from the actual circumstances, the original estimates and assumptions will be modified as appropriate in the period in which the circumstances change.
In the fourth quarter of 2012, BG Group announced agreements to sell both the Group's interest in Gujarat Gas Company Limited in India and the Group's interest in the Brazil-Bolivia Pipeline as well as the disposals of Comgás in Brazil and BG Italia Power in Italy. As a result, these operations, which represented the majority of the Group's Transmission and Distribution business segment and were considered to be a separate major line of business forBG Group, have been treated as discontinued.
The Transmission and Distribution businesses remaining with BG Group, principally Mahanagar Gas in India, are now included within the Other business segment.
A single amount is presented on the income statement for discontinued operations, comprising the post-tax results of these businesses and the post-tax profit or loss recognised on re-measurement to fair value less costs to sell and on disposal of the businesses. Comparative information has also been restated to reflect the presentation of discontinued operations as a separate line item.
In its 2012 fourth quarter and full year results, BG Group announced that following a review of the remaining business segments, the liquefaction businesses were combined with the previous E&P segment to form the 'Upstream' segment, and the remaining businesses which comprised the LNG segment were renamed 'LNG Shipping & Marketing'. The new segmental presentation is consistent with the basis used to present information for internal reporting purposes.
Presentation of results
The presentation of BG Group's results separately identifies the effect of:
·; The re-measurement of certain financial instruments; and
·; Profits and losses on the disposal and impairment of non-current assets and businesses and certain other exceptional items.
These items, which are detailed in note 2 to the financial statements (page 27), are excluded from Business Performance in order to provide readers with a clear and consistent presentation of the underlying operating performance of the Group's ongoing businesses.
New accounting standards and interpretations
The IASB issued an amended IAS 19 'Employee Benefits' in June 2011. The main amendment is to eliminate the option to defer the recognition of actuarial gains and losses, known as the 'corridor method'. The impact on the Group is that all actuarial gains and losses are recognised in other comprehensive income as they occur. In addition, net interest expense is calculated based on applying a single discount rate to the net deficit, replacing interest cost and expected return on plan assets. The amended standard has been adopted by the Group for the year ended31 December 2013 and comparative information has been restated. The impact on the balance sheet as at1 January 2012 is a reduction in net assets of $164 million. For the period ended 30 June 2012, the impact on profit before tax was a $10 million reduction ($4 million for the quarter) and the impact on other comprehensive income was a $40 million gain ($37 million loss for the quarter). The impact on the balance sheet as at 1 January 2013 is a reduction in net assets of $146 million. The impact on the balance sheet as at 30 June 2012 is a reduction in net assets of$131 million.
The IASB issued an amended IAS 1 'Presentation of Financial Statements' in June 2011. The main amendment is a requirement to group items presented in other comprehensive income on the basis of whether they are potentially reclassifiable to the income statement. The amended standard has been adopted by the Group as of 1 January 2013 and has not had a material impact on the Group's financial statements for the half year ended 30 June 2013.
A number of other amendments to accounting standards issued by the IASB are applicable from 1 January 2013.They have not had a material impact on the Group's financial statements for the half year ended 30 June 2013.2. Disposals, re-measurements and impairments
Second Quarter |
|
| Half Year | ||
2013 $m | 2012 Restated(a) $m |
|
| 2013 $m | 2012 Restated(a) $m |
67 | 203 |
| Revenue and other operating income - re-measurements of commodity based contracts | 160 | 150 |
(333) | (1 510) |
| Profits and losses on disposal of non-current assets and impairments | (323) | (1 511) |
(10) | 9 |
| Net finance (costs)/income - re-measurements of financial instruments | (78) | (14) |
123 | 258 |
| Taxation | 113 | 280 |
(153) | (1 040) |
| Impact on earnings - continuing operations | (128) | (1 095) |
a) See note 1 (page 25).
Second quarter and half year: Revenue and other operating income
Re-measurements included within revenue and other operating income amount to a credit of $67 million for the quarter (2012 $203 million), of which a credit of $35 million (2012 $95 million) represents non-cash mark-to-market movements on certain long-term gas contracts. For the half year, a credit of $160 million in respect of re-measurements is included within revenue and other operating income (2012 $150 million), of which a credit of $41 million represents non-cash mark-to-market movements on certain long-term gas contracts (2012 $72 million). Whilst the activity surrounding these contracts involves the physical delivery of gas, the contracts fall within the scope of IAS 39 and meet the definition of a derivative instrument. In addition, re-measurements include a $32 million credit for the quarter (2012 $108 million) and a $119 million credit for the half year (2012 $78 million) representing unrealised mark-to-market movements associated with economic hedges.
Second quarter and half year: Disposals and impairments of non-current assets
The second quarter included a pre-tax charge of $171 million (post-tax $94 million) in respect of certain E&P assets as a result of a reserves revision and a pre-tax charge of $116 million (post-tax $75 million) as a result of land relinquishments in the USA. In 2012, second quarter results included a $1 800 million pre-tax charge in respect of the impairment of certain assets associated with the shale gas business in the USA (post-tax $1 295 million), partially offset by a pre-tax profit of $391 million on the disposal of 10% of the Group's interest in the Karachaganak gas-condensate project (post-tax $155 million).
Other disposals and impairments in 2013 resulted in a pre-tax charge to the income statement of $46 million(2012 $101 million) in the second quarter (post-tax $6 million, 2012 $42 million) and a pre-tax charge of $36 million (2012 $102 million) in the half year (post-tax $4 million credit, 2012 $43 million charge).
Second quarter and half year: Net finance costs
Re-measurements presented in net finance costs include foreign exchange movements on certain borrowings and movements on monetary items that form part of the Group's net investment in foreign operations, offset bymark-to-market movements on certain derivatives used to hedge foreign exchange and interest rate risk.
3. Segmental analysis
Profit for the period | Business Performance | Disposals,re-measurements and impairments | Total Result | |||
Analysed by operating segment | ||||||
Second Quarter | 2013 $m | 2012 Restated(a) $m | 2013 $m | 2012 Restated(a) $m | 2013 $m | 2012 Restated(a) $m |
Group revenue(b) |
|
|
|
|
|
|
Upstream | 2 912 | 3 054 | - | - | 2 912 | 3 054 |
LNG Shipping & Marketing | 1 725 | 1 822 | - | - | 1 725 | 1 822 |
Other activities | 1 | 3 | - | - | 1 | 3 |
Less: intra-group sales | (232) | (235) | - | - | (232) | (235) |
Group revenue | 4 406 | 4 644 | - | - | 4 406 | 4 644 |
Other operating income(c) | (45) | 18 | 67 | 203 | 22 | 221 |
Group revenue and other operating income | 4 361 | 4 662 | 67 | 203 | 4 428 | 4 865 |
Operating profit/(loss) before share of results from jointventures and associates | ||||||
Upstream | 1 120 | 1 260 | (313) | (1 410) | 807 | (150) |
LNG Shipping & Marketing | 515 | 498 | 35 | 103 | 550 | 601 |
Other activities | 5 | 7 | 12 | - | 17 | 7 |
| 1 640 | 1 765 | (266) | (1 307) | 1 374 | 458 |
Share of pre-tax operating results from joint ventures andassociates | ||||||
Upstream | 131 | 80 | - | - | 131 | 80 |
LNG Shipping & Marketing | 6 | 19 | - | - | 6 | 19 |
Other activities | 11 | 11 | - | - | 11 | 11 |
| 148 | 110 | - | - | 148 | 110 |
Total operating profit/(loss) |
|
|
|
|
|
|
Upstream | 1 251 | 1 340 | (313) | (1 410) | 938 | (70) |
LNG Shipping & Marketing | 521 | 517 | 35 | 103 | 556 | 620 |
Other activities | 16 | 18 | 12 | - | 28 | 18 |
| 1 788 | 1 875 | (266) | (1 307) | 1 522 | 568 |
Net finance (costs)/income |
|
|
|
|
|
|
Finance income | 42 | 27 | 57 | 141 | 99 | 168 |
Finance costs | (62) | (43) | (67) | (132) | (129) | (175) |
Share of joint ventures and associates | (6) | (12) | - | - | (6) | (12) |
| (26) | (28) | (10) | 9 | (36) | (19) |
Taxation |
|
|
|
|
|
|
Taxation | (737) | (797) | 123 | 258 | (614) | (539) |
Share of joint ventures and associates | (39) | (30) | - | - | (39) | (30) |
| (776) | (827) | 123 | 258 | (653) | (569) |
Profit/(loss) for the period from continuing operations attributable to Shareholders (earnings) | 986 | 1 020 | (153) | (1 040) | 833 | (20) |
a) See note 1 (page 25).
b) External sales are attributable to segments as follows: Upstream $2 686 million (2012 $2 894 million), LNG Shipping & Marketing $1 719 million (2012 $1 747 million) and other $1 million (2012 $3 million). Intra-group sales are attributable to segments as follows: Upstream $226 million (2012 $160 million) and LNG Shipping & Marketing $6 million (2012 $75 million).
c) Business Performance Other operating income is attributable to segments as follows: Upstream $4 million (2012 $12 million), LNG Shipping & Marketing $(48) million (2012 $6 million) and Other $(1) million (2012 $nil).
3. Segmental analysis continued
| Business Performance | Disposals,re-measurements and impairments | Total Result | |||
Half Year | 2013 $m | 2012 Restated(a) $m | 2013 $m | 2012 Restated(a) $m | 2013 $m | 2012 Restated(a) $m |
Group revenue(b) |
|
|
|
|
|
|
Upstream | 5 982 | 6 045 | - | - | 5 982 | 6 045 |
LNG Shipping & Marketing | 3 766 | 4 001 | - | - | 3 766 | 4 001 |
Other activities | 2 | 6 | - | - | 2 | 6 |
Less: intra-group sales | (434) | (527) | - | - | (434) | (527) |
Group revenue | 9 316 | 9 525 | - | - | 9 316 | 9 525 |
Other operating income(c) | (38) | 13 | 160 | 150 | 122 | 163 |
Group revenue and other operating income | 9 278 | 9 538 | 160 | 150 | 9 438 | 9 688 |
Operating profit/(loss) before share of results from jointventures and associates | ||||||
Upstream | 2 436 | 2 698 | (297) | (1 437) | 2 139 | 1 261 |
LNG Shipping & Marketing | 1 251 | 1 201 | 122 | 76 | 1 373 | 1 277 |
Other activities | (29) | (3) | 12 | - | (17) | (3) |
| 3 658 | 3 896 | (163) | (1 361) | 3 495 | 2 535 |
Share of pre-tax operating results from joint ventures andassociates | ||||||
Upstream | 246 | 184 | - | - | 246 | 184 |
LNG Shipping & Marketing | 12 | 36 | - | - | 12 | 36 |
Other activities | 19 | 19 | - | - | 19 | 19 |
| 277 | 239 | - | - | 277 | 239 |
Total operating profit/(loss) |
|
|
|
|
|
|
Upstream | 2 682 | 2 882 | (297) | (1 437) | 2 385 | 1 445 |
LNG Shipping & Marketing | 1 263 | 1 237 | 122 | 76 | 1 385 | 1 313 |
Other activities | (10) | 16 | 12 | - | 2 | 16 |
| 3 935 | 4 135 | (163) | (1 361) | 3 772 | 2 774 |
Net finance (costs)/income |
|
|
|
|
|
|
Finance income | 71 | 74 | 189 | 138 | 260 | 212 |
Finance costs | (119) | (96) | (267) | (152) | (386) | (248) |
Share of joint ventures and associates | (13) | (27) | - | - | (13) | (27) |
| (61) | (49) | (78) | (14) | (139) | (63) |
Taxation |
|
|
|
|
|
|
Taxation | (1 624) | (1 778) | 113 | 280 | (1 511) | (1 498) |
Share of joint ventures and associates | (81) | (63) | - | - | (81) | (63) |
| (1 705) | (1 841) | 113 | 280 | (1 592) | (1 561) |
Profit/(loss) for the period from continuing operations attributable to Shareholders (earnings) | 2 169 | 2 245 | (128) | (1 095) | 2 041 | 1 150 |
a) See note 1 (page 25).
b) External sales are attributable to segments as follows: Upstream $5 563 million (2012 $5 664 million), LNG Shipping & Marketing $3 751 million (2012 $3 855 million) and other $2 million (2012 $6 million). Intra-group sales are attributable to segments as follows: Upstream $419 million (2012 $381 million) and LNG Shipping & Marketing $15 million (2012 $146 million).
c) Business Performance Other operating income is attributable to segments as follows: Upstream $6 million (2012 $8 million), LNG Shipping & Marketing $(43) million (2012 $5 million) and Other $(1) million (2012 $nil) .
3. Segmental analysis continued
| Business Performance | Disposals,re-measurements and impairments | Total Result | |||
Second Quarter | 2013 $m | 2012 Restated(a) $m | 2013 $m | 2012 Restated(a) $m | 2013 $m | 2012 Restated(a) $m |
Total operating profit/(loss) |
|
|
|
|
|
|
Upstream | 1 251 | 1 340 | (313) | (1 410) | 938 | (70) |
LNG Shipping & Marketing | 521 | 517 | 35 | 103 | 556 | 620 |
Other activities | 16 | 18 | 12 | - | 28 | 18 |
| 1 788 | 1 875 | (266) | (1 307) | 1 522 | 568 |
Less: Share of pre-tax operating resultsfrom joint ventures and associates |
|
|
|
| (148) | (110) |
Add: Share of post-tax results fromjoint ventures and associates |
|
|
|
| 103 | 68 |
Net finance costs |
|
|
|
| (30) | (7) |
Profit before tax |
|
|
|
| 1 447 | 519 |
Taxation |
|
|
|
| (614) | (539) |
Profit for the period from continuing operations attributable to Shareholders (earnings) | 833 | (20) | ||||
a) See note 1 (page 25). |
|
|
|
|
|
|
| Business Performance | Disposals,re-measurements and impairments | Total Result | |||
Half Year | 2013 $m | 2012 Restated(a) $m | 2013 $m | 2012 Restated(a) $m | 2013 $m | 2012 Restated(a) $m |
Total operating profit/(loss) |
|
|
|
|
|
|
Upstream | 2 682 | 2 882 | (297) | (1 437) | 2 385 | 1 445 |
LNG Shipping & Marketing | 1 263 | 1 237 | 122 | 76 | 1 385 | 1 313 |
Other activities | (10) | 16 | 12 | - | 2 | 16 |
| 3 935 | 4 135 | (163) | (1 361) | 3 772 | 2 774 |
Less: Share of pre-tax operating resultsfrom joint ventures and associates |
|
|
|
| (277) | (239) |
Add: Share of post-tax results fromjoint ventures and associates |
|
|
|
| 183 | 149 |
Net finance costs |
|
|
|
| (126) | (36) |
Profit before tax |
|
|
|
| 3 552 | 2 648 |
Taxation |
|
|
|
| (1 511) | (1 498) |
Profit for the period from continuing operations attributable to Shareholders (earnings) | 2 041 | 1 150 | ||||
a) See note 1 (page 25).
4. Net finance (costs)/income
Second Quarter |
|
| Half Year | ||
2013 $m | 2012 Restated(a) $m |
|
| 2013 $m | 2012 Restated(a) $m |
(134) | (92) |
| Interest payable(b) | (267) | (185) |
(28) | (26) |
| Interest on obligations under finance leases | (53) | (52) |
129 | 103 |
| Interest capitalised | 262 | 198 |
(29) | (28) |
| Unwinding of discount on provisions(c) | (61) | (57) |
(67) | (132) |
| Disposals, re-measurements and impairments(d) | (267) | (152) |
(129) | (175) |
| Finance costs | (386) | (248) |
42 | 27 |
| Interest receivable(b) | 71 | 74 |
57 | 141 |
| Disposals, re-measurements and impairments(d) | 189 | 138 |
99 | 168 |
| Finance income | 260 | 212 |
(30) | (7) |
| Net finance (costs)/income(e) | (126) | (36) |
a) See note 1 (page 25).
b) In 2013, interest receivable includes foreign exchange gains of $18 million for the quarter (2012 $18 million) and foreign exchange gains of $23 million for the half year (2012 $9 million).
c) Relates to the unwinding of the discount on provisions and amounts in respect of pension obligations which represent the unwinding of discount on the plans' net deficit.
d) Net finance (costs)/income in disposals, re-measurements and impairments for the quarter of $(10) million (2012 $9 million) and for the half year of $(78) million(2012 $(14) million) is included in note 2 (page 27) and principally reflects foreign exchange movements on certain borrowings, partly offset by mark-to-market movements on certain derivatives used to hedge foreign exchange and interest rate risk.
e) Excludes Group share of net finance costs from joint ventures and associates for the quarter of $6 million (2012 $12 million) and for the half year of $13 million(2012 $27 million).
5. Taxation
The tax charge for the second quarter was as follows: | Business Performance | Disposals,re-measurements and impairments | Total Result | |||
| ||||||
Second Quarter | 2013 $m | 2012 Restated(a) $m | 2013 $m | 2012 Restated(a) $m | 2013 $m | 2012 Restated(a) $m |
Tax charge/(credit) for the period excluding share of taxation from joint ventures and associates |
737 |
797 |
(123) |
(258) |
614 |
539 |
Share of taxation from joint ventures and associates | 39 | 30 | - | - | 39 | 30 |
Total including share of taxation from joint ventures and associates | 776 | 827 | (123) | (258) | 653 | 569 |
a) See note 1 (page 25).
5. Taxation continued
The tax charge for the half year was as follows: | Business Performance | Disposals,re-measurements and impairments | Total Result | |||
| ||||||
Half Year | 2013 $m | 2012 Restated(a) $m | 2013 $m | 2012 Restated(a) $m | 2013 $m | 2012 Restated(a) $m |
Tax charge/(credit) for the period excluding share of taxation from joint ventures and associates | 1 624 | 1 778 | (113) | (280) | 1 511 | 1 498 |
Share of taxation from joint ventures and associates | 81 | 63 | - | - | 81 | 63 |
Total including share of taxation from joint ventures and associates | 1 705 | 1 841 | (113) | (280) | 1 592 | 1 561 |
a) See note 1 (page 25).
Business Performance taxation for the half year, including share of taxation from joint ventures and associates, was $1 705 million (2012 $1 841 million). The effective tax rate of 44% for the half year is based on the best estimate of the weighted average annual income tax rate expected for the full year (2012 44.5%).
6. Discontinued operations
The post-tax profit of the businesses comprising discontinued operations for the quarter, including profits and losses on disposals and impairments, was $266 million (2012 $314 million) and for the half year was $269 million (2012 $381 million).
In June 2013, BG Group disposed of its 65.12% interest in Gujarat Gas Company Limited in India for consideration of $422 million, which resulted in a pre and post-tax profit of $245 million in the second quarter of 2013.
In May 2012, the Group disposed of its 40% equity interest in two gas-fired power generation plants in the Philippines to its partner, First Gen Corporation, for net cash proceeds of $360 million. This resulted in a pre and post-tax profit of $252 million in the second quarter of 2012.
Other disposals and impairments resulted in a post-tax result of $nil in the second quarter (2012 $2 million profit) and a post-tax loss of $2 million for the half year (2012 $nil).
Excluding profits and losses on disposals and impairments, the post-tax profit of the businesses comprising discontinued operations for the second quarter was a $21 million profit (2012 $60 million profit) and for the half year was a $26 million profit (2012 $129 million profit).
7. Earnings per ordinary share - continuing operations
Second Quarter |
|
| Half Year | ||||||
2013 | 2012 Restated(a) |
|
| 2013 | 2012 Restated(a) | ||||
$m | cents per share | $m | cents per share |
|
| $m | cents per share | $m | cents per share |
986 | 29.0 | 1 020 | 30.0 |
| Earnings - continuing operations excluding disposals, re-measurements and impairments | 2 169 | 63.8 | 2 245 | 66.1 |
(153) | (4.5) | (1 040) | (30.6) |
| Disposals, re-measurementsand impairments (after tax and non-controlling interest) | (128) | (3.8) | (1 095) | (32.2) |
833 | 24.5 | (20) | (0.6) |
| Earnings - continuing operations | 2 041 | 60.0 | 1 150 | 33.9 |
a) See note 1 (page 25).
Basic earnings per share calculations in 2013 are based on the weighted average number of shares in issue of 3 400 million for the quarter and half year.
The earnings figure used to calculate diluted earnings per ordinary share is the same as that used to calculate earnings per ordinary share given above, divided by 3 419 million for the quarter and 3 418 million for the half year, being the weighted average number of ordinary shares in issue during the period as adjusted for dilutive equity instruments.
8. Reconciliation of net borrowings(a) - Half Year
| $m |
Net borrowings as at 31 December 2012 | (10 624) |
Net increase in cash and cash equivalents | 201 |
Cash inflow from changes in borrowings | (1 120) |
Inception of finance lease liabilities/assets | (117) |
Foreign exchange and other re-measurements | 376 |
Disposal of borrowings classified as held for sale | 86 |
Net borrowings as at 30 June 2013 | (11 198) |
As at 30 June 2013, BG Group's share of the net borrowings in joint ventures and associates amounted to approximately $1.1 billion, including BG Group shareholder loans of approximately $0.7 billion. These net borrowings are included in BG Group's share of the net assets in joint ventures and associates which are consolidated inBG Group's accounts.
a) Net borrowings are defined on page 39.
Net borrowings comprise:
| As at30 Jun2013 $m | As at31 Dec2012 $m |
Amounts receivable/(due) within one year |
|
|
Cash and cash equivalents | 4 705 | 4 434 |
Overdrafts, loans and finance leases | (1 044) | (1 064) |
Derivative financial instruments(a) | (46) | (71) |
| 3 615 | 3 299 |
Amounts receivable/(due) after more than one year |
|
|
Loans and finance leases(b) | (15 086) | (14 248) |
Derivative financial instruments(a) | 273 | 325 |
| (14 813) | (13 923) |
Net borrowings | (11 198) | (10 624) |
a) These items are included within commodity contracts and other derivative financial instrument balances on the balance sheet.
b) Includes finance lease receivable of $172 million (2012 $195 million) included within non-current assets on the balance sheet.
8. Reconciliation of net borrowings - Half Year continued
Liquidity and Capital Resources
All the information below is as at 30 June 2013
The Group's principal borrowing entities are BG Energy Holdings Limited and certain wholly owned subsidiary undertakings, the majority of whose borrowings are guaranteed by BG Energy Holdings Limited (collectively BGEH).
BGEH had a $4.0 billion US Commercial Paper Programme and a $2.0 billion Euro Commercial Paper Programme, both of which were unutilised. BGEH also had a $15.0 billion Euro Medium Term Note Programme, of which $8.4 billion was unutilised.
BGEH had aggregate undrawn committed revolving bank borrowing facilities of $5.22 billion, of which $2.18 billion expires in 2016 and $3.04 billion expires in 2017. BGEH also had an undrawn committed revolving bank borrowing facility of £250m, which expires in 2015. Furthermore BGEH had $2.3 billion of undrawn credit facilities provided by export credit agencies, $1.8 billion of which is subject to documentation.
In addition, BGEH had uncommitted borrowing facilities including multicurrency lines, overdraft facilities of £45 million and credit facilities of $20 million, all of which were unutilised.
9. Dividends
Half Year | ||||
2013 | 2012 | |||
$m | centsper share | $m | centsper share | |
Prior year final dividend, paid in the period | 478 | 14.26 | 443 | 12.96 |
The final dividend of 14.26 cents per ordinary share ($478 million) in respect of the year ended 31 December 2012 was paid on 31 May 2013 to shareholders on the register at the close of business on 19 April 2013. The interim dividend of 13.07 cents per ordinary share ($444 million) in respect of the year ending 31 December 2013 is payable on6 September 2013 to shareholders on the register as at 7 August 2013.
10. Quarterly information: earnings and earnings per share
| 2013 $m | 2012 Restated(a) $m | 2013 cents per share | 2012 Restated(a) cents per share |
First quarter |
|
|
|
|
Total Result - continuing operations | 1 208 | 1 170 | 35.5 | 34.4 |
Total Result - discontinued operations | (1) | 47 | - | 1.4 |
Business Performance | 1 183 | 1 225 | 34.8 | 36.1 |
Second quarter |
|
| ||
Total Result - continuing operations | 833 | (20) | 24.5 | (0.6) |
Total Result - discontinued operations | 261 | 300 | 7.7 | 8.8 |
Business Performance | 986 | 1 020 | 29.0 | 30.0 |
Third quarter |
|
| ||
Total Result - continuing operations |
| 1 208 |
| 35.5 |
Total Result - discontinued operations |
| 77 |
| 2.3 |
Business Performance |
| 1 109 |
| 32.6 |
Fourth quarter |
|
| ||
Total Result - continuing operations |
| 935 |
| 27.5 |
Total Result - discontinued operations |
| 806 |
| 23.7 |
Business Performance |
| 1 025 |
| 30.2 |
Full year |
|
| ||
Total Result - continuing operations |
| 3 293 |
| 97.0 |
Total Result - discontinued operations |
| 1 230 |
| 36.2 |
Business Performance |
| 4 379 |
| 128.9 |
a) See note 1 (page 25).
11. Commitments and contingencies
Details of the Group's commitments and contingent liabilities as at 31 December 2012 can be found in note 24, page 120 of the Annual Report and Accounts 2012. The Group's capital expenditure commitments have decreased by approximately $1 billion in the six month period to 30 June 2013, primarily due to progress on the Group's major growth projects. There have been no material changes to the Group's other commitments or contingent liabilities in the period.
12. Related party transactions
The Group provides goods and services to, and receives goods and services from, its joint ventures and associates. In addition, the Group provides financing to some of these parties by way of loans. Details of related party transactions for the year ended 31 December 2012 can be found in note 25, page 122 of the Annual Report and Accounts 2012. There have been no material changes in these relationships in the six month period to 30 June 2013. No related party transactions have taken place in the first six months of the current financial year that have materially affected the financial position or the performance of the Group during that period.
Supplementary information: Operating and financial data
Second Quarter | First Quarter |
|
| Half Year |
| ||||||||
2013 | 2012 | 2013 |
|
| 2013 | 2012 |
| ||||||
|
|
|
| E&P Production volumes (mmboe) |
|
|
| ||||||
8.8 | 8.0 | 8.0 |
| Oil | 16.8 | 16.1 |
| ||||||
8.2 | 8.8 | 8.7 |
| Liquids | 16.9 | 17.2 |
| ||||||
42.8 | 44.5 | 42.6 |
| Gas | 85.4 | 88.9 |
| ||||||
59.8 | 61.3 | 59.3 |
| Total | 119.1 | 122.2 |
| ||||||
|
| E&P Production volumes (boed in thousands) |
|
| |||||||||
96 | 87 | 89 |
| Oil | 93 | 88 |
| ||||||
90 | 97 | 97 |
| Liquids | 93 | 95 |
| ||||||
471 | 489 | 473 |
| Gas | 472 | 488 |
| ||||||
657 | 673 | 659 |
| Total | 658 | 671 |
| ||||||
|
|
|
|
| |||||||||
$102.11 | $109.18 | $110.47 |
| Average realised oil price per barrel | $106.38 | $112.76 |
| ||||||
|
|
|
|
| |||||||||
$82.88 | $89.95 | $95.10 |
| Average realised liquids price per barrel | $89.15 | $94.76 |
| ||||||
|
|
|
|
| |||||||||
54.48p | 44.61p | 58.40p |
| Average realised UK gas price per produced therm | 56.28p | 45.54p |
| ||||||
(83.49c) | (70.92c) | (91.75c) |
| (87.29c) | (72.16c) |
| |||||||
|
|
|
|
| |||||||||
42.98c | 41.08c | 41.23c |
| Average realised International gas price per produced therm | 42.10c | 39.43c |
| ||||||
|
|
|
|
| |||||||||
47.55c | 44.25c | 46.10c |
| Average realised gas price per produced therm | 46.83c | 42.70c |
| ||||||
|
|
|
|
| |||||||||
$7.05 | $5.68 | $6.31 |
| E&P lifting costs per boe | $6.68 | $5.95 |
| ||||||
|
|
|
|
| |||||||||
$11.37 | $9.71 | $11.08 |
| E&P operating expenditure per boe | $11.22 | $9.63 |
| ||||||
|
|
|
|
| |||||||||
$11.22 | $9.18 | $11.08 |
| E&P depreciation per boe | $11.15 | $8.86 |
| ||||||
|
|
|
|
| |||||||||
2 069 | 1 623 | 1 912 |
| E&P development expenditure (including acquisitions) ($m) | 3 981 | 3 060 |
| ||||||
|
| ||||||||||||
|
| Half Year | |||||||||||
|
| 2013 mmboe | 2012 mmboe | 2013kboed | 2012kboed | ||||||||
E&P Production volumes by country |
| ||||||||||||
Australia |
| 4.6 | 4.5 | 24 | 24 | ||||||||
Bolivia |
| 6.1 | 3.9 | 34 | 21 | ||||||||
Brazil |
| 6.5 | 4.2 | 36 | 22 | ||||||||
Egypt |
| 21.0 | 23.6 | 116 | 130 | ||||||||
India |
| 3.6 | 4.9 | 20 | 27 | ||||||||
Kazakhstan |
| 16.6 | 19.1 | 92 | 105 | ||||||||
Norway |
| 0.5 | 0.3 | 3 | 2 | ||||||||
Thailand |
| 7.6 | 5.4 | 42 | 30 | ||||||||
Trinidad and Tobago |
| 13.6 | 14.6 | 75 | 80 | ||||||||
Tunisia |
| 6.8 | 6.5 | 38 | 36 | ||||||||
UK |
| 19.5 | 20.7 | 108 | 114 | ||||||||
USA |
| 12.7 | 14.5 | 70 | 80 | ||||||||
Total |
| 119.1 | 122.2 | 658 | 671 | ||||||||
Supplementary information: Operating and financial data continued
Second Quarter | First Quarter |
| Half Year | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2013 | 2012 | 2013 |
|
| 2013 | 2012 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
| Gross exploration expenditure ($m) |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
267 | 164 | 234 |
| Capitalised expenditure (including acquisitions) | 501 | 404 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
67 | 60 | 101 |
| Other expenditure | 168 | 132 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
334 | 224 | 335 |
| Total | 669 | 536 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
Gross exploration expenditure by country ($m) |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
59 | 33 | 37 |
| Australia | 96 | 73 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
67 | 17 | 54 |
| Brazil | 121 | 91 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
44 | 42 | 45 |
| Egypt | 89 | 54 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
84 | 73 | 100 |
| Tanzania | 184 | 170 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
30 | 40 | 29 |
| UK | 59 | 75 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
50 | 19 | 70 |
| Other | 120 | 73 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
334 | 224 | 335 |
| Total | 669 | 536 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplementary information: Operating and financial data continued
Second Quarter | First Quarter |
| Half Year | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2013 | 2012 | 2013 |
|
| 2013 | 2012 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
| LNG cargo deliveries by country |
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
- | 3 | - |
| Argentina | - | 5 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
1 | 1 | - |
| Brazil | 1 | 1 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
11 | 10 | 10 |
| Chile | 21 | 20 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
- | 2 | 2 |
| China | 2 | 2 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2 | 3 | 1 |
| India | 3 | 4 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
12 | 16 | 18 |
| Japan | 30 | 32 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
1 | - | - |
| Mexico | 1 | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
- | - | - |
| Netherlands | - | 1 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
- | - | 1 |
| Portugal | 1 | 1 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3 | - | - |
| Singapore | 3 | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
4 | 3 | 12 |
| South Korea | 16 | 17 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
4 | 3 | - |
| Taiwan | 4 | 6 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
- | 1 | 1 |
| UK | 1 | 1 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
1 | 4 | 4 |
| USA | 5 | 9 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
39 | 46 | 49 |
| Total | 88 | 99 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2 399 | 2 888 | 2 980 |
| LNG delivered volumes (thousand tonnes) | 5 379 | 6 054 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
a) Other items include movements in accruals and prepayments, capitalised financing costs and movements in finance leases.
Historical supplementary information is available on the BG Group plc website: www.bg-group.com
Glossary
In BG Group's results some or all of the following definitions are used: |
| ||||
| bcf | billion cubic feet |
|
| |
| bcfd | billion cubic feet per day |
|
| |
| boe | barrels of oil equivalent |
|
| |
| boed | barrels of oil equivalent per day |
|
| |
| bopd | barrels of oil per day |
|
| |
| Capital investment | Comprises expenditure on property, plant and equipment, other intangible assets and investments, including business combinations |
|
| |
| Capital investmenton a cash basis | Comprises cash flows on purchase of property, plant and equipment and intangible assets, loans to joint ventures and associates and investments in subsidiaries, joint ventures and associates |
|
| |
| Delivered volumes | Comprise all LNG volumes discharged in a given period, excluding LNG utilised by the ships |
|
| |
| E&P | Exploration and Production |
|
| |
| FPSO | Floating Production Storage and Offloading system |
|
| |
| Gearing ratio | net borrowings as a percentage of total shareholders' funds (excluding the re-measurementof commodity financial instruments and associated deferred tax) plus net borrowings |
|
| |
| IAS | International Accounting Standard issued by the IASB |
|
| |
| IASB | International Accounting Standards Board |
|
| |
| IFRIC | International Financial Reporting Interpretations Committee |
|
| |
| IFRS | International Financial Reporting Standard |
|
| |
| kboed | thousand barrels of oil equivalent per day |
|
| |
| LNG | Liquefied Natural Gas |
|
| |
| LNG Shipping & Marketing | LNG shipping, marketing and interests in regasification businesses |
|
| |
| m | million |
|
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| mmboe | million barrels of oil equivalent |
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| mmbtu | million british thermal units |
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| mmcfd | million cubic feet per day |
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| mmscfd | million standard cubic feet per day |
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| mtpa | million tonnes per annum |
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| Net borrowings | Comprise cash, current asset investments, finance lease liabilities/assets, currency and interest rate derivative financial instruments and short and long-term borrowings. Excludes net borrowings in respect of assets classified as held for sale |
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| PSC | Production Sharing Contract |
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| SEC | US Securities and Exchange Commission |
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| STOIIP | Stock tank oil initially in place |
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| Tbtu | trillion british thermal units |
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| tcf | trillion cubic feet |
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| Total operating profit | Operating profit plus share of pre-tax operating results of joint ventures and associates |
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| Total resources | The aggregate of proved and probable reserves plus discovered resources and risked exploration |
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| Unit operating expenditureper boe | Production costs and royalties incurred over the period divided by the net production for the period. This measure does not include the impact of depreciation and amortisation costs and exploration costs as they are not considered to be costs associated with the operation of producing assets |
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| Unit lifting costs per boe | 'Unit operating expenditure' as defined above, excluding royalty, tariff and insurance costs incurred over the period divided by the net production for the period |
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| Upstream | Exploration & Production and LNG liquefaction businesses |
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Enquiries |
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Enquiries relating to BG Group's results, businessand financial position should be made to: | General enquiries about shareholder mattersshould be made to: | ||||
Investor Relations DepartmentBG Group plcThames Valley Park DriveReadingBerkshireRG6 1PT | Equiniti LimitedAspect HouseSpencer RoadLancingWest SussexBN99 6DA | ||||
Tel: 0118 929 3025email: [email protected] | Tel: 0871 384 2064 Online: via https://help.shareview.co.uk | ||||
| (From here, you will be able to email your query securely) | ||||
Media Enquiries: Neil Burrows Tel: 0118 929 2462 Mark Todd Tel: 0118 929 3110 Kim Blomley Tel: 0118 938 6568 |
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High resolution images are available at www.flickr.com/bggroup |
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BG Group is listed on the US over-the-counter market knownas the International OTCQX. Enquiries should be made to: |
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OTC Markets Group Inc.304 Hudson Street3rd FloorNew York, NY 10013USA |
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email: [email protected] |
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Financial Calendar |
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Ex-dividend for 2013 interim dividend | 7 August 2013 | ||||
Record date for 2013 interim dividend | 9 August 2013 | ||||
Payment of 2013 interim dividend | 6 September 2013 | ||||
Exploration and LNG Capital Markets Day | 9 September 2013 | ||||
Announcement of 2013 third quarter results | 31 October 2013 | ||||
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BG Group plc website: www.bg-group.com |
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Registered office 100 Thames Valley Park Drive, Reading RG6 1PTRegistered in England No. 3690065 |
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Related Shares:
BG..L