SHARES in energy firm BG Group plummeted yesterday as it warned 2013 production would be flat.
The FTSE 100 group said it did not expect to grow production next year, largely due to delays to projects. The shutdown of the non-operated Elgin/Franklin field in the North Sea and the deferral of the Jasmine field in the same area to next year will stifle production, BG Group said.
A scaling back of drilling in the US, thanks to lower gas prices, will also hurt output next year.
Production over the three months to September grew by five per cent, largely attributable to the strong performance of the natural gas business. Full year production growth is expected to be three per cent.
BG posted a 16 per cent rise in earnings over the third quarter to $1.2bn (£744m), up from $1bn over the same period last year and beating consensus forecasts of $1bn.
It also agreed to sell an interest in part of the Queensland Curtis gas project to the Chinese National Offshore Oil Corporation for $1.93bn.
Sam Wahab, oil and gas analyst at Seymour Pierce, yesterday raised concerns that with flat production growth forecast next year, investors cannot see how BG Group will maintain current earnings.
“This is compounded by the company’s significant investment in gas related exploration with diminishing spot prices,” he said.
BG shares closed down 13.69 per cent yesterday.