Gas exploration firm BG has reported a better-than-expected rise in fourth quarter profits despite a surprise drop in production.
The former British Gas firm said earnings increased by 13% to 1.1 billion US dollars (£655.2 million) in the final quarter of 2010, whereas the City had expected 924 million US dollars (£573.3 million).
The company said higher selling prices, including an 18% increase in the price of gas it sold in UK, had helped boost its profits.
Production of oil and gas dropped by 2% in the final quarter, whereas the City had expected levels to remain flat.
But the company said it expects to increase production by 7% a year until 2020 from existing discoveries alone.
The company also upped its production targets for the Santos Basin in Brazil, which it said will increase output by 38% to 550,000 barrels of oil equivalent per day by 2020, while it expects volumes of US shale gas to nearly double to 190,000 barrels of oil equivalent per day.
The strong fourth quarter results helped BG Group to record an 18% increase in earnings to 4 billion US dollars (£2.5 billion) in the full-year.
Stuart Joyner, an analyst at Investec, described BG’s results as a solid performance. He said: “They will get continuing assistance from commodity price rises in the first quarter of 2011, as oil is still more expensive than forecast even though it has come down a bit in recent days.”
The Reading-based firm expects to increase its output above its 7% target from 2012 as it ramps up production from new sites in Brazil, Australia and the US.
The company also said its total reserves increased by 12% to 16.2 billion barrels of oil equivalent in the year.