BG Earnings Plunge By 39% On Oil Price Slump

Oil and gas exploration giant BG has reported a plunge in underlying earnings as it prepares for its £36bn takeover by Royal Dutch Shell (Xetra: R6C1.DE - news) .

Earnings fell 39% to $5.6bn (£3.9bn) as the company was weighed down by the slump in world oil and gas prices.

For the quarter they were 22% lower at $1.4bn (£982m).

But chief executive Helge Lund said the group's performance was in line with or ahead of expectations.

BG confirmed it produced more than expected last year at 704,000 barrels of oil equivalent per day, beating its 2015 production target thanks to a ramp-up in output from fields in Australia, Brazil and Norway.

Mr Lund said: "This strong operational performance is the result of the capability and commitment of our teams across the organisation and we will deliver a high-performing business into the combination with Shell (LSE: RDSB.L - news) ."

Bottom-line pre-tax profits, before stripping out one-off items and other costs, were $3bn (£2bn), compared to a loss of $2.3bn(£1.6bn) in 2014.

The results come after shareholders in BG and Shell backed the merger between the two firms, expected to complete later this month.

It (Other OTC: ITGL - news) will see 10,000 jobs lost across both companies.

This week Shell reported an 80% fall in annual profits and said it was ready to implement more cuts should the oil price downturn continue.