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The Integrated Gas Major – BG Group

BG Group · Feb 9, 2006 · 69 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 9th February 2006
  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: 2005 & 2006 Strong 2005 results, earnings up 64% Share buyback of 1 billion Dividend for 2005 of 6p per share, up 57% E&P and LNG targets for 2006 increased again Delivering exceptional…
  5. The Integrated Gas Major – BG Group – slide 5
    The Integrated Gas Major Key messages: Long term growth Distinctive long-life asset base Earnings trajectory to 2009 increased again Strong potential out to 2012 Secured new exploration plays Delivering exceptional value to…
  6. The Integrated Gas Major – BG Group – slide 6
    The Integrated Gas Major Overview Strategy 2005 results Progress to 2006 Long term growth Conclusions 7
  7. The Integrated Gas Major – BG Group – slide 7
    Strategy
  8. The Integrated Gas Major – BG Group – slide 8
    Strategy Integrated Gas Major Integrated Gas Major Connect gas to Secure low cost high value markets resources Build & access markets Equity reserves Serve customers Contracted resources Skills to succeed across the gas…
  9. The Integrated Gas Major – BG Group – slide 9
    Strategy Business environment Sustained high energy prices Increasing inter-regional gas trade Sharper competitor focus on gas Energy security concerns High prices changing industry landscape 10
  10. The Integrated Gas Major – BG Group – slide 10
    Strategy BG positioning Long-life and low cost assets Low cost and flexible LNG portfolio People and skills to deliver Exploration driving long term growth BG well positioned for long term growth 11
  11. The Integrated Gas Major – BG Group – slide 11
    Strategy Total operating profit (m) m 2500 CAGR 40% 1997-2005 2,380 2000 1,513 1500 1,279 1000 833 888 688 500 330 160 229 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 E&P T&D, LNG, Power & Other Continuing operations…
  12. The Integrated Gas Major – BG Group – slide 12
    2005 results Ashley Almanza Chief Financial Officer
  13. The Integrated Gas Major – BG Group – slide 13
    2005 results E&P operating profit (m) 641 (55) 1,942 167 1,189 + 63% 2004 Volume Price & E&A 2005 & Mix USD FX Continuing operations excluding disposals and certain re-measurements Operating profit includes BGs share of…
  14. The Integrated Gas Major – BG Group – slide 14
    2005 results LNG operating profit (m) 46 (26) 172 60 92 + 87% 2004 Shipping & Liquefaction BD & Other 2005 Marketing Continuing operations excluding disposals and certain re-measurements Operating profit includes BGs share…
  15. The Integrated Gas Major – BG Group – slide 15
    2005 results Global LNG: Outlook 2006-2009 Capital invested Return * Liquefaction 2006 - 0.9bn 2006 c 10% 2009 - 1.0bn Post 2006 c 13% Shipping Volumes EBITDA margin ** and 2006 - 12.9 mtpa 2006 c 9% Marketing 2009 - 16.7…
  16. The Integrated Gas Major – BG Group – slide 16
    2005 results T&D operating profit (m) 6 6 211 51 148 + 43% 2004 Comgas MetroGAS Other 2005 Continuing operations excluding disposals and certain re-measurements Operating profit includes BGs share of pre-tax operating…
  17. The Integrated Gas Major – BG Group – slide 17
    2005 results Group financial performance Quarter Full year Q4 2005 % yoy 2005 % yoy 858 +97 Total operating profit (m) 2,380 +57 (13) -35 Finance costs (m) (51) -24 504 +114 Earnings (m) 1,357 +64 - - ROACE (%) 23.4% - 703 +62…
  18. The Integrated Gas Major – BG Group – slide 18
    2005 results Dividend Step change in cashflow New material, long life assets Share buyback of 1 billion Dividend re-based to 6p per share, up 57% Future increases in line with underlying earnings growth Improved returns for…
  19. The Integrated Gas Major – BG Group – slide 19
    2005 results 2005 proved reserve additions (mmboe) Underlying performance 89 (188) Reserve replacement = 174% Fuel Gas 146 Price 219 2005 Production 172 Revisions New developments & Net sales arrangements Strong…
  20. The Integrated Gas Major – BG Group – slide 20
    2005 results Reserve Replacement Reserve Replacement 1 year 3 year % % Underlying 174 172 Performance (1) SEC Data (2) 120 152 (1) Underlying performance comprises proved reserves movements from revisions and new…
  21. The Integrated Gas Major – BG Group – slide 21
    2005 results E&P benchmarking 3 year F&D costs (/boe) 3 year reserve replacement (%) BG 2003-2005 (1) BG 2003-2005 (2) Peer 2002-2004 (1) BG 2003-05 position with Underlying Performance data (2) BG 2003-05 position with…
  22. The Integrated Gas Major – BG Group – slide 22
    2005 results E&P unit operating costs Annual unit operating cost (/boe) BG 2004 BG 2005 opex 4.04/boe BG 2005 Peer 2004 Industry costs rising BG is an industry leader 0 2 4 6 8 Source: Evaluate Energy 2005, BG Group Peer…
  23. The Integrated Gas Major – BG Group – slide 23
    Progress to 2006
  24. The Integrated Gas Major – BG Group – slide 24
    Progress to 2006 Project delivery Delivered Delivered 2006 2004 2005 Elba Island ELNG 1 Buzzard Two LNG ships Simian Three LNG ships Margarita EPF Sienna Miskar expansion Canada Interconnector Lake Charles Exp. II Central block…
  25. The Integrated Gas Major – BG Group – slide 25
    Progress to 2006 2006 volumes Previous New E&P (000 boed) 580 600 up 3.4% LNG (mtpa) 6.9 7.1 up 2.9% T&D (bcma) 11.7 11.7 restated* Power capacity (GW) 2.8 2.8 unchanged At 2006 reference conditions (see appendix) * Previous…
  26. The Integrated Gas Major – BG Group – slide 26
    Progress to 2006 Capex: 2005 2006 (bn) 0.20 0.05 3.5 3.1 0.15 0.5 2006 0.2 2.4 2.0 2005 1.5 2005 Strategy Brindisi New projects Q3 2005 E&P LNG equity Comgas 2006 Strategy guidance Outlook financing & guidance…
  27. The Integrated Gas Major – BG Group – slide 27
    2005 results & Progress to 2006 Summary Strong 2005 results, earnings up 64% Competitive E&P metrics Outstanding project delivery E&P and LNG targets for 2006 increased again Share buyback of 1 billion Dividend increased by 57%…
  28. The Integrated Gas Major – BG Group – slide 28
    Long term growth
  29. The Integrated Gas Major – BG Group – slide 29
    Long term growth Summary Distinctive long-life asset base Projects to 2009 Strong potential out to 2012 Low-cost flexible LNG portfolio Reserves, resources and new exploration plays Strong focus on value creation 30
  30. The Integrated Gas Major – BG Group – slide 30
    Long term growth E&P asset base BG net production (000s boepd) of assets on stream by end 2003 only 500 400 300 Assets in production in 2003 only 200 100 0 2003A 2006 2009 2012 At 2006 reference conditions (see appendix)…
  31. The Integrated Gas Major – BG Group – slide 31
    Long term growth North Sea: Buzzard Gross 2P reserves 510 mmboe Capex of 1.5 bn Project 90% complete On stream end 2006 BG net production 000s bopd 50 BG production plateau 41,000 bopd 40 Area hub for next 20 years 30 20…
  32. The Integrated Gas Major – BG Group – slide 32
    Long term growth North Sea: Hub development Hub Strategy Chough Rook Judy platform de-bottlenecked Crow Now capable of 450 mmscfd Jackdaw Record throughput Nov 2005 Courageous Drilling success in 2005/6 Jade Two Judy platform…
  33. The Integrated Gas Major – BG Group – slide 33
    Long term growth North Sea: Production BG net production 000s boepd Production up 11% 2007-09: 200 J Block Blake 150 Everest ECA Elgin Franklin 100 New discoveries 2005-06: Courageous Jackdaw 50 Calloway Banks 0 Production from…
  34. The Integrated Gas Major – BG Group – slide 34
    Long term growth Tunisia: Miskar Miskar North Mago 3D Seismic Record production in 2005 Well Gross 2P reserves 230 mmboe Six infill wells 3 wells in 2006/07 3 wells in 2009/10 Miskar Infill Drilling Further near-field…
  35. The Integrated Gas Major – BG Group – slide 35
    Long term growth Tunisia: Hasdrubal BG equity 50% Sfax Gross 2P reserves 78 mmboe Miskar pipeline Condensate pipeline On stream 2009 Nakta Hasdrubal Mahares pipeline Gross production 30,000 boepd Second production hub Further…
  36. The Integrated Gas Major – BG Group – slide 36
    Long term growth India GSPCL Panna/Mukta & Tapti Cairn BG farm-in Infill well drilling blocks Reliance Increased liquid volumes Reliance Higher gas prices Krishna ONGC Godavari Basin Farm in to 3 ONGC blocks Close to…
  37. The Integrated Gas Major – BG Group – slide 37
    Long term growth Trinidad Gross un-contracted reserves 3.4 tcf Monetisation opportunities Domestic market 220 mmscfd 2008 ALNG de-bottlenecking 40 mmscfd 2009 New 3.6mtpa Train 2011/12 2-4 E&A wells planned 2006/07 Licence round…
  38. The Integrated Gas Major – BG Group – slide 38
    Long term growth Egypt Higher gross production 2007-09 De-bottlenecking LNG (5-10%) Train 3 progress Egyptian un-contracted supply Potential Gaza supply Government alignment Investments building on existing assets 39
  39. The Integrated Gas Major – BG Group – slide 39
    Long term growth Egypt: Exploration Four exploration wells in 2006 Memphis, Mathilde, Silva & Mina Rigs contracted for 2006/07 Three new operated blocks WDDM Close to infrastructure El Manzala High potential, multi-play El…
  40. The Integrated Gas Major – BG Group – slide 40
    Long term growth Brazil: Comgas concession Key dimensions High potential GDP (2004) US 155bn Population 25 million No of households 6.3 million Low exploitation No of customers 484,500 2005 avg gas sales 11.9 mmcmd Gas % of…
  41. The Integrated Gas Major – BG Group – slide 41
    Long term growth Comgas: Gross margin & volumes Gross margin* 2004 Volume mmcmd Total 153 million 1% 1% Volume CAGR 10% 2005-2010 4% 25 9% 20 15 22% 10 63% 5 0 2004A 2006 2008 2010 2012 2014 * Gross Margin = Turnover…
  42. The Integrated Gas Major – BG Group – slide 42
    Long term growth Karachaganak Rail Orenburg 8 bcm BG 32.5% joint operated field export Orenburg BG capital spend over 1bn 4 mtpa Production CAGR 20% 2001-05 Gas re- Field injection Gross 2005 peak rate of Samara 410,000…
  43. The Integrated Gas Major – BG Group – slide 43
    Long term growth Karachaganak: Field enhancement BG net production 000s boepd 250 De-bottlenecking 200 Western export up to 7.7 mtpa On stream end 2006 150 Phase IIM 100 Enhancing liquids plateau 50 16 wells, 480m gross 5 drilled to…
  44. The Integrated Gas Major – BG Group – slide 44
    Long term growth Karachaganak: Field expansion BG net production 000s boepd 250 4th Stabilisation Train 200 Western export up to 10.3 mtpa Gross capex over 450m 150 On stream 2009 100 Phase III 50 Liquids sales up to 14 mtpa Gas sales…
  45. The Integrated Gas Major – BG Group – slide 45
    Long term growth Karachaganak: Full potential BG net production 000s boepd 250 Developing full liquids potential 200 Significant production growth 150 Raising & extending plateau 100 Significant upside 50 Maximising recovery 0 2005A…
  46. The Integrated Gas Major – BG Group – slide 46
    Long term growth Nigeria: LNG purchase Long term supply from NLNG First delivery January 2006 2.3 mtpa contract for 20 years Excess volumes Future supply options Brass River MoU signed 2 mtpa OKLNG to follow Further NLNG…
  47. The Integrated Gas Major – BG Group – slide 47
    Long term growth Nigeria: OKLNG Slug Four train project, 5.5 mtpa each catcher Process Flares Initial development of two trains LNG trains FEED award shortly Buildings Utilities BG well placed for offtake 2010/11 Loading…
  48. The Integrated Gas Major – BG Group – slide 48
    Long term growth Nigeria: Upstream Faulting forms prospective Gas accumulations Farm-in to OPL 332 hydrocarbon traps along faults BG 45% & operator One well commitment Phase 1 Significant oil and gas potential 3D seismic late…
  49. The Integrated Gas Major – BG Group – slide 49
    Long term growth E&P: E&A progress Drilling In 2005: completed 29 wells, 14 successes Three further successes in UK and India since year end Key successes: Manatee, Sienna-up, Jackdaw & Calloway Near-term production: Banks,…
  50. The Integrated Gas Major – BG Group – slide 50
    Long term growth E&P: 2006 E&A preview UK Canada 6-7 wells 12 wells 3 wells Norway 0-1 well 1 well Italy Tunisia 1 well 1 well Trinidad 0-2 wells Mauritania India 1-2 wells 2 wells Brazil Egypt 3 wells 2 wells 1 well 2…
  51. The Integrated Gas Major – BG Group – slide 51
    Long term growth E&P: Brazil So Francisco Brasilia onshore 14 licences, 3 BG operated 10 new licences in 2005 Santos deep-water Belo Horizonte 3 wells in 2006 3D seismic 1,400 sq km in 2007 Santos Shallow-water 2 wells in…
  52. The Integrated Gas Major – BG Group – slide 52
    Long term growth E&P: Norway Barents Sea Country entry in 2004 Mid-Norway Organic growth 15 licences, 8 BG operated Tromso 6 new licences in 2005 1 or 2 wells in 2006 3D seismic acquisition Trondheim Northern Long term…
  53. The Integrated Gas Major – BG Group – slide 53
    Long term growth E&P: Libya Successful early entry Tunisia Tripoli Sirte Basin, 2 licences Sirte Basin 100% equity in proven basin BG operator 4,750 sq km 2D/3D seismic 2006/07 2 wells in 2008 Libya Kufra Basin, 1 licence…
  54. The Integrated Gas Major – BG Group – slide 54
    Long term growth E&P: Prospect inventory Over 200 prospects and leads Net risked reserves of 2,440 mmboe Key countries Brazil, Egypt, Norway and UK Significant new acreage being assessed Significant potential to deliver value…
  55. The Integrated Gas Major – BG Group – slide 55
    Long term growth E&P: Reserves and resources Cumulative Reserves/ reserves/resources Production* Risked Exploration 7,071 mmboe 38 Years (2,440 mmboe) Un-booked Resources (1,211 mmboe) 4,631 mmboe 25 Years Probable Reserves…
  56. The Integrated Gas Major – BG Group – slide 56
    Long term growth E&P: Production BG net production 000s boepd 1000 CAGR 6-10% 2005-12 800 CAGR 5-7% 2006-09 600 600 Medium term Long term 2007-09 2010-12 Key projects: Key opportunities: 400 Buzzard Karachaganak expansion…
  57. The Integrated Gas Major – BG Group – slide 57
    Long term growth Global LNG: Summary Leading position in Atlantic Basin Multiple, low cost import terminals Increasing portfolio of contracted supply Supply growth CAGR of 28% to 2009 Value being realised from flexibility Embedded…
  58. The Integrated Gas Major – BG Group – slide 58
    Long term growth Global LNG: Regasification and markets Lake Charles Expansions reducing unit costs Second expansion due Q2 2006 Fuel savings, NGLs Elba Island High value markets Expansion by 2012 agreed Dragon & Brindisi Dragon…
  59. The Integrated Gas Major – BG Group – slide 59
    Long term growth Global LNG: Supply BG supply (mtpa) CAGR 20-25% 2005-12 30 Overall 2012 outcome of 24-30 mtpa Supply Options Brass CAGR 28% 2005-09 OKLNG 25 ELNG Train 3 New Trinidad 20 Further Nigeria Algeria Spot 15 Planned…
  60. The Integrated Gas Major – BG Group – slide 60
    Long term growth 2007-2012 Key projects & opportunities Key developments on stream 2007-09 Hasdrubal Lake Charles (fuel savings/NGLs) Karachaganak LNG long term firm supply Panna/Mukta/Tapti LNG ships Dolphin Comgas Dragon…
  61. The Integrated Gas Major – BG Group – slide 61
    Conclusions
  62. The Integrated Gas Major – BG Group – slide 62
    The Integrated Gas Major Framework for growth (February 2006) Earnings Firm projects Firm projects beyond 2006 in BG plans Firm projects to 2006 Growth based on Existing assets firm projects in 2005 plan** Energy growth* Zero…
  63. The Integrated Gas Major – BG Group – slide 63
    The Integrated Gas Major Key messages: 2005 & 2006 Strong 2005 results, earnings up 64% Share buyback of 1 billion Dividend for 2005 of 6p per share, up 57% E&P and LNG targets for 2006 increased again Delivering exceptional…
  64. The Integrated Gas Major – BG Group – slide 64
    The Integrated Gas Major Key messages: Long term growth Distinctive long-life asset base Earnings trajectory to 2009 increased again Strong potential out to 2012 Secured new exploration plays Delivering exceptional value to…
  65. The Integrated Gas Major – BG Group – slide 65
    66
  66. The Integrated Gas Major – BG Group – slide 66
    Appendix
  67. The Integrated Gas Major – BG Group – slide 67
    Appendix Key assumptions REFERENCE CONDITIONS Brent Oil price US40/bbl US Henry Hub 6/mmBtu US/UK exchange rates of 1.80:1 UKCS upstream tax 40% 2003-05; 50% 2006 forward Prepared under International Financial Reporting Standards…
  68. The Integrated Gas Major – BG Group – slide 68
    Appendix LNG: Long term firm supply Firm Supply Commercial (mtpa) Start-Up ALNG T2/3 2.1 2003 NLNG 2.3 Q1 2006 ELNG T2* 3.5 Q2 2006 ALNG T4** 1.5 Q3 2006 EG 3.3 Q3 2007 Total Firm Supply*** 12.7 Q3 2007 *First cargo lifted in…
  69. The Integrated Gas Major – BG Group – slide 69
    Appendix Glossary Increase or (decrease) GDP Gross domestic product United States Dollar GW Gigawatt UK pounds sterling HIIP Hydrocarbons initially in place m Million UK pounds sterling JV Joint venture 000 Thousand km Kilometres 2P…

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