bg group drops on disappointing forecast

BG Group shares have plummeted after the oil and gas company said it is not expecting any production growth in 2013.

bg group drops on disappointing forecast


The firm – which is found in the top-ten holdings of about 250 funds including Nigel Thomas’ Axa Framlington UK Select Opportunities – made the shock forecast in today’s third-quarter results.

BG Group said its expects to grow production by 3% this year, suggesting production will reach about 665,000 barrels of oil equivalent per day. 

However, the firm disappointed the market by saying it expects production in 2013 to be “in line” with 2012. As of 1500 GMT, its shares were down 15% on the FTSE 100.

Frank Chapman, chief executive of the company, said the lower production growth was due to a number of factors, including delays in its Jasmine field start-up in the North Sea and lower production from Egypt.

The stock can be found in the top-ten of Thomas’ £3.3bn Axa Framlington UK Select Opportunities Fund, where it makes up 2.8% of the portfolio. 

Other large funds with significant positions in the company include Anthony Nutt’s £2bn Jupiter Income Fund, Nick Millington’s £1.3bn Scottish Widows UK Growth Fund and Richard Wilmot’s £1.3bn Newton UK Equity Fund.

BG Group’s results also contained some good news, although the production forecast attracted the most attention.

Third-quarter profits jumped 16% to $1.19bn (£740m), beating the consensus forecast of $1.1bn, while the firm has signed a $1.93bn, 20-year deal to supply China’s CNOOC with liquefied natural gas.


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