BG Group share price up 1.7 per cent despite second-quarter profit sliding 65 per cent

Jessica Morris
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BG Group will have to scale back capital investment (Source: Getty)

Shares in BG Group rose 0.83 per cent to 1,097.5p per share in mid-afternoon trade after production rises in the second quarter.

The figures

BG Group became the latest casualty of the oil price slump as its earnings for the three months ending 31 July fell 65 per cent to $994m (£638m), down from $2.36bn (£1.51bn) a year earlier.

This was offset somewhat by oil and gas production hitting record levels during this period - as output rose 19 per cent to 703,000 barrels of oil equivalent per day.

The gas producer also maintained its dividend at 14.38 cents per share.

Why it's interesting

BG Group has struggled since oil prices started to fall from a peak of $106 per barrel in June last year, and they're yet to recover, hovering around $50 per barrel. However the bloodbath is industry-wide with rivals such as BP and Shell also reporting huge losses.

Today's results also come as BG group works towards a takeover by Shell, a deal which values it at £47bn. BG group today said that the mega-merger had gained regulatory approval in the US and Brazil.

Yesterday, Shell reassured its investors who are worried about the viability of such a large deal: "This should be well received as Shell has suffered from a perception that its capital discipline has been poor relative to peers and that the BG deal was struck assuming higher oil prices, while synergies were limited".

What BG Group said

"We achieved a number of key milestones during the quarter while continuing to deliver on our cost and efficiency programmes.

"This performance reflects our actions to stabilise and de-risk the business and our teams remain focused on delivering our 2015 commitments."

In short

BG Group's profits have been hit by the global oil price rout however this was offset slightly by better production levels.

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