May 1 (Bloomberg) -- BG Group Plc, whose chief executive officer resigned this week, said first-quarter earnings fell 3 percent as production in Egypt declined further.
Profit excluding disposals and one-time items dropped to $1.15 billion from $1.18 billion a year earlier, the U.K.’s third-largest natural-gas producer said today in a statement. That beat the $1.05 billion average estimate of eight analysts surveyed by Bloomberg.
“The deterioration in Egypt will similarly impact 2015 production,” BG said in statement today. “A significant amount of maintenance activity,” particularly in the U.K. “will lead to substantially lower production” in the next two quarters with output rising in the last quarter of the year.
CEO Chris Finlayson resigned after a little more than a year in the job as the Reading, England-based company missed or dropped production targets. His exit, for personal reasons, prompted analysts including RBC Capital Markets to speculate that BG, which is expanding its liquefied natural gas and oil businesses, may become an acquisition target.
The shares rose as much as 8 pence, or 0.7 percent, to 1,136 pence in London. They traded at 1,198 pence at 8:16 a.m. local time.
BG, which remains committed to Finlayson’s strategy, needs to accelerate returns to shareholders, Chairman Andrew Gould said April 28. Gould is acting CEO until a permanent successor is found.
First-quarter output fell 4 percent to 633,000 barrels of oil equivalent a day. The company forecast average output will be about 590,000 barrels a day this year.
Egyptian extraction dropped 35 percent in the first quarter to 66,000 barrels a day from the prior three months because of deteriorating field performance and fuel diversion to the domestic market, BG said. The nation accounted for about 10 percent of the company’s production and 5 percent of earnings.
It hasn’t exported any LNG cargoes from Egypt so far this year with one scheduled before July. BG’s receivables for gas supplies to the Egyptian market doubled to $1.4 billion as of March 31 from last year, the company said.
BG “currently expects very limited cargoes from Egyptian LNG for the foreseeable future,” it said today. “The planned gas development program in Equatorial Guinea will result in fewer cargoes” next year.
The company’s received 40 cargoes from supplies in the first quarter, down from 49 in the same period last year, with total tonnage falling 18 percent, it said today. LNG shipping and marketing earnings dropped 7 percent to $692 million.
In Brazil, BG’s gross pumping exceeded 220,000 barrels of oil equivalent a day at the end of the quarter following installation of additional production units. The company last month teamed up with PTT Exploration & Production Pcl to jointly explore acreage in the Barreirinhas Basin off Brazil.
In Canada, BG’s pipeline partner Spectra Energy Corp. is advancing a LNG project with the British company now authorized to export as much as 25 million tons of the fuel a year.
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