BG raises 2015 production guidance as profit slides

(Fixes to read $1.16 billion, paragraph 4)

* Raises 2015 production target to 680,000-700,000 boepd

* EBITDA down 37 pct year on year to $1.24 bln

* 2015 capex budget estimated at $6.5 bln

By Karolin Schaps

LONDON, Oct (HKSE: 3366-OL.HK - news) 30 (Reuters) - Britain's third-biggest energy company BG Group (LSE: BG.L - news) raised its 2015 production guidance for the second time this year as it posted a sharp fall in third-quarter earnings on Friday.

BG, which along with rivals worldwide has been cutting investment budgets and operating costs to deal with a halving in oil prices since June last year, cited higher than expected output from fields in Brazil and Australia for the new production guidance.

The company, which has accepted a $70 billion takeover offer from Shell (LSE: RDSB.L - news) , reported a 37 percent year-on-year fall in third-quarter earnings before interest, tax, depreciation and amortisation (EBITDA) to $1.24 billion, driven by weaker energy prices.

That was marginally better than the $1.16 billion consensus estimate of analysts polled by the company.

BG said that its capital investment programme would come to about $6.5 billion this year, in line with previous guidance and around 30 percent lower than last year. It (Other OTC: ITGL - news) also plans to save at least $300 million this year on organisational costs, it added.

"We are on track to deliver our promised operating and capital cost savings for 2015 and are adding new, low cash-cost volumes through Australia and Brazil," said Chief Executive Helge Lund, who took the reins in early February, before Shell made its takeover offer.

"These actions will help mitigate the impact of lower commodity prices on our financial results."

The gas-focused company raised its 2015 production outlook to between 680,000 and 700,000 barrels of oil equivalent per day (boepd), up from 650,000-690,000 barrels.

The group's fields lifted third-quarter output to 716,000 boepd, up 26 percent on the same period last year.

Acquirer Shell announced on Thursday that it took an $8.2 billion charge in the third quarter after scrapping projects in the Arctic and Canada to cope with weak prices and clean up its balance sheet ahead of the BG takeover slated to complete early next year.

(Editing by David Goodman)