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The Integrated Gas Major – BG Group

BG Group · Feb 15, 2005 · 59 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. The Integrated Gas Major – BG Group – slide 1
    BG Group The Integrated Gas Major London 15th February 2005
  2. The Integrated Gas Major – BG Group – slide 2
    Welcome Sir Robert Wilson Chairman
  3. The Integrated Gas Major – BG Group – slide 3
    Introduction Frank Chapman Chief Executive
  4. The Integrated Gas Major – BG Group – slide 4
    The Integrated Gas Major Key messages Strong 2004 results Accelerated delivery to 2006 Improved outlook to 2009 Enhanced portfolio of long term options Robust strategy delivering value for shareholders This business gets better…
  5. The Integrated Gas Major – BG Group – slide 5
    The Integrated Gas Major Overview 2004 results Progress to 2006 Strategy Long term growth Summary Q&A Delivering exceptional value to shareholders 5
  6. The Integrated Gas Major – BG Group – slide 6
    2004 results Ashley Almanza Chief Financial Officer
  7. The Integrated Gas Major – BG Group – slide 7
    2004 results E&P operating profit (m) 183 (44) 1204 106 959 + 26% 2003 Volume & Price & FX E&A Expense 2004 Cost Continuing operations excluding exceptional items Strong underlying performance 8
  8. The Integrated Gas Major – BG Group – slide 8
    2004 results LNG operating profit (m) 9 1 94 7 77 + 22% 2003 Shipping & ALNG Business 2004 Marketing Development & Other Continuing operations excluding exceptional items Strong progress 9
  9. The Integrated Gas Major – BG Group – slide 9
    2004 results T&D operating profit (m) 27 4 (3) (10) 134 116 + 16% 2003 Comgas MetroGAS Phoenix FX 2004 Continuing operations excluding exceptional items Comgas strong performer 10
  10. The Integrated Gas Major – BG Group – slide 10
    2004 results 2004 operating profit Quarter Full year Q4 2004 m % yoy 2004 m % yoy 364 +45 E&P 1204 +26 22 +29 LNG 94 +22 41 +21 T&D 134 +16 35 - Power 121 -6 (11) +10 Other activities (31) +3 451 +38 Group Total 1522 +22…
  11. The Integrated Gas Major – BG Group – slide 11
    2004 results Group financial performance Quarter Full year Q4 2004 % yoy 2004 % yoy (20) +54 Interest (m) (70) -10 249 +36 Earnings (m) 842 +23 435 +6 Net cash from operations (m) 1582 +10 509 +64 Investment (m) 1894 +80 - - ROACE…
  12. The Integrated Gas Major – BG Group – slide 12
    2004 results E&P unit operating costs Annual unit operating cost (/boe) BG 2004 opex 3.66/boe BG 2004 Industry costs rising BG 2003 Peer 2003 BG is an industry leader 0 2 4 6 8 Peer Group includes Super Majors, Source:…
  13. The Integrated Gas Major – BG Group – slide 13
    2004 results E&P reserves and resources Cumulative Reserves/ reserves/resources Production* Risked Exploration 6,596 mmboe 40 Years (2,109 mmboe) Un-booked Resources 4,487 mmboe 27 Years (869 mmboe) Probable Reserves (1,470…
  14. The Integrated Gas Major – BG Group – slide 14
    2004 results E&P benchmarking 3 year F&D costs (/boe) 3 year reserve replacement (%) BG 2002-2004 BG 2001-2003 Peer 2001-2003 0 2 4 6 8 10 0% 100% 200% 300% 400% Peer Group includes Super Majors, Source: Evaluate Energy…
  15. The Integrated Gas Major – BG Group – slide 15
    2004 results Total operating profit m 1600 CAGR 38% 1997-2004 1522 1400 1251 1200 1000 888 833 800 688 600 400 330 229 200 160 0 1997 1998 1999 2000 2001 2002 2003 2004 E&P T&D, LNG & Power Continuing operations excluding…
  16. The Integrated Gas Major – BG Group – slide 16
    2004 results North Caspian BG is contracted to sell North Caspian RoK/Partners discussions continue Rights to terminate Value is being protected Forward plans assume sale will complete Forward plans assume sale 17
  17. The Integrated Gas Major – BG Group – slide 17
    Progress to 2006
  18. The Integrated Gas Major – BG Group – slide 18
    Progress to 2006 Project delivery Delivered 2005 2006 2004 Elba Island Atlantic Buzzard Two LNG ships Cromarty Three LNG ships Margarita EPF Interconnector Miskar expansion Lake Charles Exp. I Lake Charles Exp. II West Franklin…
  19. The Integrated Gas Major – BG Group – slide 19
    Progress to 2006 2006 volumes Previous New E&P (000 boed) 530 580 up 9.4% LNG (mtpa) 6.6 6.9 up 4.5% T&D (bcma)* 14.0 14.0 unchanged Power capacity (GW)** 2.8 2.8 unchanged At 2005 reference conditions (see appendix) * Includes…
  20. The Integrated Gas Major – BG Group – slide 20
    Progress to 2006 Capex : 2004 2006 (bn) 0.2 (0.2) 0.15 (0.25) 0.7 3.6 3.0 Previous Plan Enhancements, E&A Spend Financing, Ships Barca FX Current Plan New Assets & and ALNG Acquisitions At 2005 reference conditions (see…
  21. The Integrated Gas Major – BG Group – slide 21
    Progress to 2006 ROACE 13-14% 13.0% Increased returns Investment for growth Normalisation to 2004-09 new reference Investment for growth conditions beyond 2009 Lake Charles (IFRS) Previous New Target Target At 2005…
  22. The Integrated Gas Major – BG Group – slide 22
    Progress to 2006 Project screening Long term oil and gas prices have risen Robust range 20 - 28/bbl Fundamental approach unchanged Robust and relevant screening values 23
  23. The Integrated Gas Major – BG Group – slide 23
    Progress to 2006 Financial framework Sustainable dividend growth Capex for 2005-2006 2.4bn Gearing < 25% Material investment opportunities Strong financial framework 24
  24. The Integrated Gas Major – BG Group – slide 24
    Progress to 2006 Summary Strong operating and financial performance Outstanding project delivery and acceleration Increased investment Growth enhanced Strong track record of delivery 25
  25. The Integrated Gas Major – BG Group – slide 25
    Strategy Frank Chapman Chief Executive
  26. The Integrated Gas Major – BG Group – slide 26
    Strategy Energy consumption QBtu 250 CAGR 2000-2025 Oil Oil 1.8% 200 Gas Gas 2.2% 150 Coal 1.6% 100 Coal Renewables Renewables 1.7% 50 Nuclear Nuclear 0.7% 0 1970 1980 1990 2000 2010 2020 Source: EIA 2004 Gas is the fuel…
  27. The Integrated Gas Major – BG Group – slide 27
    Strategy Business environment Strong oil and gas prices Global economic growth resilient to prices Positive long term outlook for gas Strong growth in LNG, especially Atlantic Basin Increasing industry focus on gas Favourable…
  28. The Integrated Gas Major – BG Group – slide 28
    Strategy Integrated Gas Major Integrated Gas Major Connect gas to Secure low cost high value markets resources Build and access markets Equity reserves Serve customers Contracted resources Skills to succeed across the gas…
  29. The Integrated Gas Major – BG Group – slide 29
    Strategy Gas market focus UK / Europe Middle North Focus East / America Caspian Focus Atlantic supply India focus Long term growth Bolivia/ Long term Brazil growth Developed Market Developing Market Supplies Connecting…
  30. The Integrated Gas Major – BG Group – slide 30
    Long term growth BG Groups competitive advantage Aligned organisation Integrated gas Portfolio focus Leadership People Track Skills record Agility Distinctive combination delivering success 31
  31. The Integrated Gas Major – BG Group – slide 31
    Long term growth
  32. The Integrated Gas Major – BG Group – slide 32
    Long term growth Framework for growth Strong asset base with in-built growth Incremental investments around existing assets Connecting assets to enhance value New opportunities providing added impetus Strong focus on value…
  33. The Integrated Gas Major – BG Group – slide 33
    Long term growth Framework for growth (from February 2004) Earnings Risked E&A and BD Additional projects Firm projects Firm projects beyond 2006 in BG plans Firm projects to 2006 Existing assets Energy growth* Zero growth…
  34. The Integrated Gas Major – BG Group – slide 34
    Long term growth Framework for growth (February 2005) Earnings Firm projects in 2005 plan Growth based on firm projects in 2004 plan Energy growth* Zero growth 2003 2006 2009 Schematic representation only At 2005 reference…
  35. The Integrated Gas Major – BG Group – slide 35
    Long term growth North Sea 000 boed Decline to 2007 arrested 200 Field enhancements 150 J Block Everest 100 Neptune 50 Armada Blake 0 New discoveries 2004A 2005 2006 2007 2008 2009 Maria, NW Seymour 2004 view Field…
  36. The Integrated Gas Major – BG Group – slide 36
    Long term growth India : Panna, Mukta & Tapti growth 000 boed Compared to acquisition in 2001 60 Current gas production up 45% 2P reserves up 15% Enhancements Panna Mukta 30 Enhancements Tapti Production planned to double from 2004…
  37. The Integrated Gas Major – BG Group – slide 37
    Long term growth Egypt ELNG 1 Q2 2005 3 months acceleration ELNG 2 Q4 2005 6 months acceleration Upstream supply accelerated Damietta supply and off-take Offtake 1.6 mtpa peak Rosetta DCQ increase 275-345 mmscfd Equity…
  38. The Integrated Gas Major – BG Group – slide 38
    Long term growth Trinidad ALNG 4 Q4 2005 ECMA Dolphin Deep Q4 2005 Dolphin gross ultimate 2P reserves increased to 2.9 tcf Central Block 65 mmscfd facility Q2 2006 Further expansion end 2009 ALNG 4 and Petrotrin supply Adding…
  39. The Integrated Gas Major – BG Group – slide 39
    Long term growth LNG : Atlantic Basin volumes & import capacity mtpa 25 Market progress 20 Elba - Cypress pipeline Dragon LNG 15 Brindisi 10 Supply progress 5 Damietta offtake (BG & Petronas) Supplies under negotiation 0 2004A…
  40. The Integrated Gas Major – BG Group – slide 40
    Long term growth Comgas Gross 8% CAGR 2004-2009 bcmpa 6 1st tariff review completed Supports future market growth 4 2004 operating profit up 38% Focus on high margins 2 Residential Commercial 0 2004A 2005 2006 2007 2008 2009…
  41. The Integrated Gas Major – BG Group – slide 41
    Long term growth Portfolio additions from M&A India Panna Mukta, Tapti enhancements Egypt Rosetta equity Trinidad Central block Mauritania Projects & exploration potential Canada Exploration progress & potential M&A success…
  42. The Integrated Gas Major – BG Group – slide 42
    Long term growth Projects in the plan Existing assets Existing assets and and enhancements enhancements Existing assets + Interconnector reverse flow Nigeria supply Comgas organic growth Karachaganak gas sales Panna/Mukta drilling…
  43. The Integrated Gas Major – BG Group – slide 43
    Long term growth Framework for growth (February 2005) Earnings Firm projects Risked E&A and BD in BG plans Additional projects Growth based Firm projects beyond 2006 on firm projects Firm projects to 2006 in 2004 plan Existing…
  44. The Integrated Gas Major – BG Group – slide 44
    Long term growth Additional projects Core asset enhancements Delivering LNG growth Value creation via exploration Additional value creation to 2009 and beyond 45
  45. The Integrated Gas Major – BG Group – slide 45
    Long term growth Additional projects : North Sea Example: Armada Hub Enhancing multiple hubs Norway 15/12 UK Increasing hub production Maria e ok e M-Spoke Armada Sp V- Spo k Pi Near hub discoveries S- N.W. Seymour 22/3b,…
  46. The Integrated Gas Major – BG Group – slide 46
    Long term growth Additional projects : Karachaganak Asset enhancement Debottlenecking Atyrau-Samara expansion Additional western volumes New processing facilities Stabilisation train 4 20-30 mmboe/annum liquids Potential 5th…
  47. The Integrated Gas Major – BG Group – slide 47
    Long term growth Additional projects : Trinidad & Tobago ALNG multi-train debottlenecking 1.5 to 3 mtpa Dolphin field 600 bcf unbooked resources NCMA Poinsettia deep discovery 200-300 bcf unbooked resources Manatee gas…
  48. The Integrated Gas Major – BG Group – slide 48
    Long term growth Additional projects : LNG Import capacity (mtpa) 35-40 Longer term supply potential Existing Assets Embedded New Trinidad expansion ELNG T3 options Medium term New Greenfield supply potential OKLNG 21 ALNG…
  49. The Integrated Gas Major – BG Group – slide 49
    Long term growth Exploration: Acreage acquired UK Canada 4 blocks 4 core locations 6 blocks Norway 1 licence 8 licences Mauritania 3 blocks Egypt Trinidad 2 blocks 1 block Brazil 1 block 2003 2004 Growing the…
  50. The Integrated Gas Major – BG Group – slide 50
    Long term growth Exploration: Prospect inventory EMV value 21% CAGR 2000-2004 Exploration and appraisal wells 60 Appraisal 50 Exploration 40 30 20 10 0 2000 2001 2002 2003 2004 2000 2001 2002 2003 2004 2005e…
  51. The Integrated Gas Major – BG Group – slide 51
    Long term growth Exploration: Wells planned 2005 North Sea Canada 6 exploration 19 E&A wells 1 appraisal Italy Spain 2 exploration 1 exploration Israel Mauritania 1 exploration 5 exploration 2 appraisal Thailand Trinidad 2…
  52. The Integrated Gas Major – BG Group – slide 52
    Long term growth Additional projects North America Brindisi regas Armada Hub expansion expansions North America CATS Karachaganak extra volumes new supplies ullage filling Microgen North America Gaza Gas Marketing Dragon…
  53. The Integrated Gas Major – BG Group – slide 53
    Summary
  54. The Integrated Gas Major – BG Group – slide 54
    Summary Key messages Strong 2004 results Accelerated delivery to 2006 Improved outlook to 2009 Enhanced portfolio of long term options Robust strategy delivering value for shareholders This business gets better 55
  55. The Integrated Gas Major – BG Group – slide 55
  56. The Integrated Gas Major – BG Group – slide 56
    Appendix
  57. The Integrated Gas Major – BG Group – slide 57
    Appendix Key assumptions REFERENCE CONDITIONS Brent Oil price US23/bbl UK uncontracted 21pence/therm US Henry Hub 4.30/mmBtu US/UK exchange rates of 1.80:1 US/UK inflation rates of 2.5% per annum Prepared under International…
  58. The Integrated Gas Major – BG Group – slide 58
    Appendix Glossary Increase or (decrease) EPF Early production facility United States Dollar EPOD Extended plan of development UK pounds sterling F&D Finding and development costs m Million UK pounds sterling FX Foreign exchange 000…
  59. The Integrated Gas Major – BG Group – slide 59
    Appendix Projects in the plan Existing assets and enhancements Projects to 2006 and enhancements Existing assets + Lake Charles I, II ALNG 4 Glenelg Comgas organic growth LNG ships Atlantic Margarita EPF CPC expansion Miskar…

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