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Strategy and Q3 Results – BG Group

BG Group · Nov 4, 2008 · 46 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. Strategy and Q3 Results – BG Group – slide 1
    Strategy and Q3 results 2008
  2. Strategy and Q3 Results – BG Group – slide 2
    Legal notice There are matters discussed in this presentation that are forward looking statements. By their nature, forward-looking statements involve uncertainty because they depend on future circumstances, and relate to events, not all…
  3. Strategy and Q3 Results – BG Group – slide 3
    The Integrated Gas Major Key messages Strong third quarter results Material exploration and appraisal success Strategic plan confirmed Acquisition of Queensland Gas Company Delivering value to shareholders 3
  4. Strategy and Q3 Results – BG Group – slide 4
    The Integrated Gas Major Overview Strategy update Business segments Portfolio for growth Q3 2008 results 4
  5. Strategy and Q3 Results – BG Group – slide 5
    Strategy Strategy update I Excellent exploration & appraisal results, success in 8 countries Net share of reserves & resources in Brazil estimated at over 3 bn boe 2P reserves expected to rise by over 2 bn boe* (+60%) Total…
  6. Strategy and Q3 Results – BG Group – slide 6
    Strategy Strategy update II Increased production expected in Brazil Expenditure re-phasing expected at Karachaganak Phase III Majority control of QGC now obtained LNG operating profit guidance raised 1.4 bn in 2008 1.3 bn in…
  7. Strategy and Q3 Results – BG Group – slide 7
    Strategy Integrated Gas Major Integrated Gas Major Connect gas to Secure competitively high value markets priced resources Build & access markets Equity reserves Serve customers Contracted resources Skills to succeed across…
  8. Strategy and Q3 Results – BG Group – slide 8
    Strategy Business model E&P LNG Power Transmission Distribution E&P Resources Enabling Markets Skills and opportunities across the gas chain 8
  9. Strategy and Q3 Results – BG Group – slide 9
    Strategy Key country portfolio Norway UK Kazakhstan USA Tunisia India Trinidad & Tobago Egypt Oman Nigeria Brazil Australia Core countries Potential core countries Focusing on developing material countries 9
  10. Strategy and Q3 Results – BG Group – slide 10
    Strategy Countries of current operation Norway Canada UK Kazakhstan Italy Israel / PA USA Oman India Tunisia China Algeria Thailand Libya Philippines Trinidad & Tobago Malaysia Egypt Nigeria Brazil Singapore Australia…
  11. Strategy and Q3 Results – BG Group – slide 11
    Business segments
  12. Strategy and Q3 Results – BG Group – slide 12
    Business segments E&P volumes CAGR 14% 1997-2007 000 boed 700 601 604 600 504 500 457 428 400 373 280 298 300 240 238 200 165 100 0 1997 1999 2001 2003 2005 2007 A decade of outstanding growth 12
  13. Strategy and Q3 Results – BG Group – slide 13
    Business segments E&P benchmarking Annual unit opex cost trend (/boe) 14 12 10 8 6 4 2 0 2002 2003 2004 2005 2006 2007 BG Top quartile Combined Companies Bottom quartile Source: Evaluate Energy 2008, BG Group Peer…
  14. Strategy and Q3 Results – BG Group – slide 14
    Business segments E&P benchmarking 3 year F&D cost trend (/boe) 35 30 25 20 15 10 5 0 2001-03 2002-04 2003-05 2004-06 2005-07 BG Top quartile Combined Companies Bottom quartile Source: Evaluate Energy 2008, BG Group…
  15. Strategy and Q3 Results – BG Group – slide 15
    Business segments E&P: Production BG net production (000s boepd) 2005-12 1000 CAGR 6-8% 2009 800 680,000 boepd 600 Medium term 2007-09 Long term 2010-12 400 Key projects: Key opportunities: Buzzard Karachaganak Jasmine…
  16. Strategy and Q3 Results – BG Group – slide 16
    Business segments Brazil: 2008 drilling and key prospects BM-S- 52 BG 40% Corcovado (2), (3) BM-S- 13 BG 60% BM-S- 10 BM-S- 11 BM-S- 50 BG 25% BG 25% BG 20% Iara (1) Parati Tupi Carioca BM-S- 47 BG 50% Saleta (1)…
  17. Strategy and Q3 Results – BG Group – slide 17
    Business segments Australia: QGC acquisition On-market cash offer for QGC at A5.75/share (circa A5.2bn) Proposed Australia LNG plant Value creation from combination of QGC QGC assets in Walloon Fairway and BG Group skills and…
  18. Strategy and Q3 Results – BG Group – slide 18
    Business segments E&P: 2008 E&A preview Summary of wells Alaska Canada UK Norway 4-6 New plays 1 well 3 wells 4 wells 3 wells 1 well 1 well 1 well Play extenders 17-19 Appraisal/Near term production 20-23 Tunisia 1 well 1 well…
  19. Strategy and Q3 Results – BG Group – slide 19
    Business segments LNG outlook 2008: raising LNG operating profit guidance to 1.4 bn 2009: over 50% of Shipping & Marketing volumes contracted margin fixed on material proportion of sales 2009: raising LNG operating profit guidance…
  20. Strategy and Q3 Results – BG Group – slide 20
    Business segments BG Groups global LNG strategy & markets UK Belgium France USA S. Korea Spain Japan Turkey Italy India China** Puerto Rico Mexico Egypt Taiwan Trinidad Singapore* Nigeria EG Australia Brazil Chile…
  21. Strategy and Q3 Results – BG Group – slide 21
    Business segments Global LNG & US: Supply mtpa Egypt 30 & T&T OKLNG & Brass 25 Australia 20 NLNG Train 7 15 Other term supply 10 Nigerian LNG T4/5 Contracted Equatorial Guinea to 2023 Egyptian LNG T2 5 Atlantic LNG T4…
  22. Strategy and Q3 Results – BG Group – slide 22
    Business segments Global LNG & US: Costs World-wide liquefaction capex (/tpa) US regasification capex (/mscfd) 1000 1000 Greenfield projects Greenfield projects Expansion projects Expansion projects 800 800 BG liquefaction…
  23. Strategy and Q3 Results – BG Group – slide 23
    Business segments Global LNG Strong competitive position Large, long-life supply base Low cost structure Flexible portfolio, serving global markets Integrated US portfolio Market-led strategy Capturing value globally…
  24. Strategy and Q3 Results – BG Group – slide 24
    Business segments Transmission and distribution High growth markets, India and Brazil Regulatory regimes focused on development Sustained volume growth Long-term growth businesses Exposure to high growth economies 24
  25. Strategy and Q3 Results – BG Group – slide 25
    Business segments Power Power drives growth in gas demand Existing portfolio of contracted gas plants US power plants in attractive north east region Integrated into BG Groups US gas business Portfolio of mostly gas-fired…
  26. Strategy and Q3 Results – BG Group – slide 26
    The Integrated Gas Major Total operating profit m CAGR 35% 1997-2007 4500 4,216 4000 3500 3,248 3,103 3000 2500 2,389 2000 1,520 1500 1,287 1000 833 888 688 500 229 330 160 0 1997 2000 2003 2006 2007 2008 E&P T&D, LNG,…
  27. Strategy and Q3 Results – BG Group – slide 27
    The Integrated Gas Major Key messages Strong third quarter results Material exploration and appraisal success Strategic plan confirmed Acquisition of Queensland Gas Company Delivering value to shareholders 27
  28. Strategy and Q3 Results – BG Group – slide 28
    Portfolio for growth
  29. Strategy and Q3 Results – BG Group – slide 29
    Portfolio for growth E&P: Prospect inventory Total risked exploration resources: 3,356 mmboe Onshore Norway Deepwater Other Brazil Egypt China Nigeria UK Offshore Conventional Well balanced inventory, around 75% of…
  30. Strategy and Q3 Results – BG Group – slide 30
    Portfolio for growth E&P: Reserves and resources CAGR 19% Reserves/ mmboe Production* 10,046 10000 8,017 8000 7,071 3,356 46 Years 2,713 6000 2,440 3,122 30 Years 1,772 4000 1,211 1,236 1,383 1,529 16 Years 2000 2,184…
  31. Strategy and Q3 Results – BG Group – slide 31
    Portfolio for growth E&P: Reserves and resources 10,046 mmboe 2000 2000 1.6 million boepd 3,356 CAGR 8% 1500 1500 3,356 3,356 1.2 million boepd 1000 1000 CAGR 6% 3,122 3,122 3,122 CAGR 8% out to 2020 1,529 1,529 500 500…
  32. Strategy and Q3 Results – BG Group – slide 32
    Portfolio for growth Capital investment 2007-2009 ( billion) 0.7 (0.6) 0.9 8.8 0.3 7.5 Prior year Exploration Acquisitions Inflation FX Current Excludes full QGC acquisition 32
  33. Strategy and Q3 Results – BG Group – slide 33
    Portfolio for growth Capital structure and dividend Capital investment for 2008 2009 6.3 bn Substantial growth in investment opportunities Dividend policy unchanged Long-term growth, good returns 33
  34. Strategy and Q3 Results – BG Group – slide 34
    Portfolio for growth Framework for growth EPS Based on firm projects In BG plans** Energy growth* Zero growth Key growth projects Karachaganak Buzzard US LNG Trinidad E&P/ LNG Hasdrubal 2006 2009 Schematic representation…
  35. Strategy and Q3 Results – BG Group – slide 35
    Q3 2008 results
  36. Strategy and Q3 Results – BG Group – slide 36
    Financial performance Q3 2008 Underlying total operating profit up 36% Good performance in E&P Excellent LNG performance Strong results 36
  37. Strategy and Q3 Results – BG Group – slide 37
    Financial performance Q3 2008 Q3 2008 Q3 2007 million million % yoy Total operating profit 1 383 672 +106% Earnings 777 368 +111% EPS 23.2p 10.9p +113% Operating cash flow 1 198 773 +55% Results excluding disposals, certain…
  38. Strategy and Q3 Results – BG Group – slide 38
    Financial performance Q3 2008 operating profit Q3 2008 Q3 2007 million million % yoy E&P 917 433 +112% LNG 367 149 +146% T&D 80 67 +19% Power 19 29 -34% Other activities - (6) - Group total 1 383 672 +106% Results excluding…
  39. Strategy and Q3 Results – BG Group – slide 39
    Financial performance Q3 2008 operating profit E&P Q3 2008 Q3 2007 Volume (mmboe) 54.0 48.7 Exploration charge (m) 115 102 Operating profit (m) 917 433 Results excluding disposals, certain re-measurements and impairments Total…
  40. Strategy and Q3 Results – BG Group – slide 40
    Financial performance Q3 2008 operating profit LNG Q3 2008 Q3 2007 million million Shipping and marketing 351 130 Liquefaction 36 33 Business devt and other (20) (14) Operating profit 367 149 Results excluding disposals, certain…
  41. Strategy and Q3 Results – BG Group – slide 41
    Financial performance Q3 2008 operating profit T&D Q3 2008 Q3 2007 million million Comgas 69 59 Other 11 8 Operating profit 80 67 Results excluding disposals, certain re-measurements and impairments Total operating profit…
  42. Strategy and Q3 Results – BG Group – slide 42
    Financial performance Q3 2008 operating profit Power Q3 2008 Q3 2007 million million Subsidiaries 2 5 JVs and associates 17 24 Operating profit 19 29 Results excluding disposals, certain re-measurements and impairments…
  43. Strategy and Q3 Results – BG Group – slide 43
    Financial performance Q3 2008 Operating cashflow 1 198 m (up 55%) Capex 730 m Net funds 471 m Strong financial position 43
  44. Strategy and Q3 Results – BG Group – slide 44
    Financial performance Conclusions Strong third quarter results Progress made on growth programme Broad portfolio of long-term options Robust strategy delivering value to shareholders Creating shareholder value 44
  45. Strategy and Q3 Results – BG Group – slide 45
    Appendix
  46. Strategy and Q3 Results – BG Group – slide 46
    Appendix Key assumptions REFERENCE CONDITIONS Brent Oil price US 55/bbl US Henry Hub 7.25/mmBtu US/UK exchange rates of 2:1 Prepared under International Financial Reporting Standards All production includes fuel gas QGC RESERVES…

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