BG Group Increases Production, Reports EBITDA Plunge

Despite increasing production, BG Group reported a  y-o-y 39% decrease in the Upstream EBITDA and an even worse tree for its LNG Shipping & Marketing business.

“Production reached record levels, more than doubling in both Australia and Brazil, and we now expect output for the year to be in the upper half of our forecast range” BG Group’s Chief Executive, Helge Lund, commented in a note released on Friday. 

The British-headquartered company reported a 19% increase in production to 703 kboed, moving full year guidance to the upper half of 650 - 690 kboed range. On the other hand, earnings per share for the first 6 months of the year fell 58% from $2,361 million to $994 million. Capital investment decreased too.

‘Capital investment on a cash basis was 34% lower at $3 123 million and was entirely in the Upstream segment, consisting of $2 827 million on development and other activities, and $296 million on exploration’ reads the part referring to half-year results.

BG, which received an unconditional anti-trust approval of the Shell offer from Brazil in July, is about to merge with the Anglo-Dutch super-major. 

“We are making good progress with the recommended combination with BG, which should enhance our free cash flow, create an IOC leader in LNG and deep water innovation, and be a springboard to change Shell into a simpler and more profitable company.  The regulatory filings process and integration planning are both progressing well” Shell’s CEO Ben van Beurden commented in a separate communique released on Thursday. 

In April, Royal Dutch Shell and BG Group reached agreement on the terms of a recommended cash and share offer by Shell for the entire capital of BG Group, with Shell offering 383 pence in cash and 0.4454 Shell B Shares for each BG Share.