FTSE 100-listed oil and gas explorer BG Group’s share price rose 4.5 per cent yesterday, despite modest first quarter results which unveiled a three per cent drop in profits.
Production fell three per cent over the period but operating profits for its liquid to natural gas (LNG) unit increased by three per cent, both of which were in line with previous guidance.
Three key project milestones were achieved in the first quarter of 2013 and future projects for the year remain on target.
“I am pleased with the delivery of our key milestones in the first quarter,” said new chief executive Chris Finlayson, who started in his role in January.
“We have made a good start to the year and while there is still more to accomplish, I am encouraged by the progress we are making against our remaining 2013 targets.”
Despite heavy rain, the company remains on target in Australia for its LNG project in 2014 and the $20.4bn cost estimate for the first phase of its project.
Oil well tests in Tanzania showed “better than expected” results and BG Group finalised a contract to sell up to 2.5m tonnes of LNG per year to India.
Drilling has begun in Egypt with plans to commence production in 2014, as part of a “recovery plan” for the company.
“This is a solid set of results,” said broker Investec. “There is no change to guidance, which is not a surprise this early in the year.
“We are slightly surprised at the positive share price reaction. This is perhaps a reflection of the negative sentiment towards the stock currently.”