BG Group, soon to be part of Shell, revealed Friday a 58 percent earnings slump in the first half of 2015, compared to the same period last year.
The company posted earnings of $994 million for the first six months of 2015, which marked a significant decrease to the group’s earnings of $2.36 billion posted in the first six months of 2014. Upstream adjusted EBIT for the second quarter of 2015 was $422 million, compared to $1.2 billion for 2Q 2014, which marked a 65 percent drop from the same period last year.
Despite the income decrease BG announced that production output rose by 19 percent in the second quarter of 2015, compared to 2Q 2014, reaching 703,000 barrels of oil equivalent per day. Average production levels during the quarter in Australia and Brazil more than doubled to 80,000 barrels of oil equivalent per day and 143,000 barrels of oil equivalent per day, respectively, according to the group’s results statement.
BG Group Chief Executive Helge Lund commented in a company release:
“We achieved a number of key milestones during the quarter while continuing to deliver on our cost and efficiency programs. 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. In Australia, we assumed operational control of the first train at QCLNG, which is now operating at plateau, and produced first LNG from the second train earlier this month. In Brazil, our share of production is now exceeding 150,000 barrels of oil equivalent per day and the sixth FPSO was recently moored on location. Our LNG business has again produced a robust operating performance to deliver 58 cargoes in the quarter.
“This performance reflects our actions to stabilize and de-risk the business and our teams remain focused on delivering our 2015 commitments.”
Commenting on BG Group’s latest results, investment bank Jefferies said in an organization statement:
“Production of 703,000 barrels of oil equivalent per day was seven percent ahead of our estimate and the consensus, with strong contributions from Australia and Brazil, as well as higher entitlement volumes in Kazakhstan. Production is also ramping strongly at the Knarr development in Norway. Upstream adjusted EBIT of $422m is a 14 percent beat on consensus estimates and was 2 percent above our estimate.”