BG Group shocked markets and took a 17% hit to its share price when it announced that the company would see no production growth in 2013. It was also revealed that production output for the end of 2012 would also show reduced growth, likely showing a rise in volumes of 3% as compared to 5% earlier in the year.
The company blamed the reduced production on the shutdown of the Elgin/Franklin field earlier in the year and the decision to scale back drilling in the US as a result of low natural gas prices. In addition to this, various delays on projects in the North Sea, Egypt and Brazil also took their toll.
Analysts had expected BG Group’s production portfolio to hit 700 000 bpd; the company’s news that it would only be producing an average of 641 000 bpd and no more in 2013 came as something of a shock to those who had been expecting an 11% rise.
BG’s Chief Executive Frank Chapman, commented on the situation: “It is disappointing today but I do want to point out that our company has managed to add a huge amount of resources over the years, about a billion barrels of resource a year and that resource now resides inside the company.”
Edited from various sources by David Bizley