LNG boosts BG profits

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Reading-based gas producer, BG Group, has reported strong results for the fourth quarter of 2008 boosted by its liquefied natural gas (LNG) operations.

Net profit in the fourth quarter beat forecasts with a 25 per cent rise on the same period a year ago. Earnings per share for the period were up 74 per cent and operating profit was up 65 per cent to £5.4bn.

In addition to improving profits, successful explorations in Australia and Brazil have led to a 64 per cent year-on-year increase in proven and probable oil and gas reserves. Combined with its strong performance in LNG, the group has confirmed its production growth of six per cent to eight per cent by 2020.

BG Group is hopeful that the geographical diversity of its long-life assets will offset the fall in profits from the group’s oil and gas production in the current economic climate. The group has increased its forecasts for capital expenditure and expects to budget £4bn for 2009.

BG Group’s chief executive, Frank Chapman, said: ‘2008 was a year of record results, extending a 12-year trend that has seen operating profits rise to £5.4bn. Our strategy and performance have delivered, as intended, sustained high earnings growth and good financial returns over more than a decade.

‘We have now assembled a powerful opportunity set, together with a group of people with the ambition and skills to exploit those opportunities. And we have the financial strength to realise the material value inherent in our portfolio, and in so doing achieve a bright and positive future.’