BG Group Adjusted Profit Declines on Tax, Lower LNG Prices

BG Group Plc, the U.K.’s third-largest oil and gas producer, said adjusted profit fell 29 percent in the fourth quarter on lower liquefied natural gas prices and a tax credit a year earlier that wasn’t repeated.

Excluding disposals and one-time items, earnings were $1.03 billion, the company said in a statement today. That missed the $1.06 billion mean estimate in a Bloomberg survey of 11 analysts.

Chief Executive Officer Chris Finlayson, who took over on Jan. 1, has delayed the company strategy presentation, usually held with the fourth-quarter earnings, to reset company production targets. BG fell by a record 14 percent in one day on Oct. 31, when it said output won’t grow in 2013 because of project delays in the North Sea, U.S., Brazil and Egypt.

Net income rose to $1.73 billion in the period from $1.34 billion a year earlier.

Nexen Inc. restarted in November the North Sea Buzzard oil field, where BG has a stake, after it was shut for about a month. Total SA said Jan. 24 it expected to resume pumping at its Elgin and Franklin fields, in which BG is also a partner, within weeks following a natural gas leak in March.

West Delta

BG said in October its West Delta Deep Marine project in Egypt wasn’t meeting expectations and in November told clients in Chile about a possible LNG supply reduction this year partly because of less fuel available from the African nation.

“The LNG division will likely continue to see earnings restricted due to price hedging in 2012, before improving in 2013 as hedges come to an end,” Oswald Clint, an analyst at Sanford C. Bernstein & Co. in London, also said before the earnings were released.

LNG prices in Japan, the world’s biggest buyer of the fuel, were about 5 percent lower, averaging at $15.89 million British thermal units in October and November last year, down from the same period a year earlier, according to the latest data available from LNG Japan Corp.

As of November, BG reached asset sales agreements that would release about $7.6 billion of capital by July, more than then $5 billion targeted in February.

BG will host a webcast presentation at 12 p.m. London time.