Natural gas produced and FTSE 100 constituent BG Group (LSE: BG) released its half yearly report today, marking steep drops in profits and revenues as a result of the falling fuel prices this year.
Revenue for Q2 2009 was down 28% year on year form the equivalent period of 2008. The year on year decline for the first half amounted to £910 million, or 14%.
Net profit for Q2 was down to £513 million, marking a 31% year on year drop from Q2 2008. BG put the blame on sharp declines in oil and gas prices the industry has seen over the past year for the disappointing performance and said it would not meet the production target set for 2009.
The report highlighted some positive developments, including a 7% year on year increase in production for Q2 and an expected annualised hike in production of 6-7%. The company also entered into an alliance with EXCO Resources to develop shale gas fields in Louisiana and Texas and reached a 20 year agreement with the China National Offshore Oil Company (CNOOC) to sell 3.6 million tonnes of LNG annually from its Queensland Curtis LNG project.
BG also lifted the interim dividend 20% year on year.
The company said it expects further increased in production, which is projected to average 700,000 barrels of oil equivalent per day (boed) in Q4, but will still fall short of the target of 680,000 boed, reaching it over the 12 months to 31 March 2010, a quarter later than initially planned.
The not so impressive results were expected by the market as BG Group was roughly flat on LSE following the release of the report this morning.
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