100-listed BG Group’s shares plunged over five per cent yesterday, after project delays caused the oil and gas company to slash its production outlook for next year.
The firm said that the combined impact of ongoing political and social instability in Egypt and delays in Norway would reduce production in 2014 by around 30,000 barrels of oil equivalent per day (boepd).
In addition, BG Group expects to operate fewer rigs in the US due to the continuing low gas price there.
The announcement follows disappointments in February, when BG abandoned its target of one million barrels per day by 2015, and last October, when the firm said production would be flat in 2013.
“The company has itself to blame for [yesterday’s] fall in share price”, Malcolm Graham-Wood, analyst at VSA Capital, told City A.M. “The problem is that BG Group don’t update the market enough, so the announcement was a big shock. Issues in Egypt would have been anticipated, but Norway and the US were a bit of a curve-ball.”
BG Group said that guidance for this year remains unchanged.
Estimated output in 2015 is also unchanged, but BG said this is subject to a recovery in US gas prices and future events in Egypt.