LONDON (ShareCast) - A sharp plunge for BG Group meant that the oil and gas producing sector was at the bottom of the pile on Wednesday afternoon.

BG Group shocked the market this morning by cutting back production guidance as a result of a number of delays to project start-ups.

It now expects full-year production will be just 3% higher than in 2011, while 2013 output is not expected to show any growth at all.

Shares were down 13.77% at 1,146.38p before the end of trade today. Also weighing on the stock was a downgrade by Investec from ‘hold’ to ‘sell’. The broker said that today’s production downgrade “wipes out much of the projected EPS growth for BG”.

The firm also announced that it would be selling 40% of certain interest in its Queensland Curtis LNG project in Australia for $1.93bn, as well as a sale of LNG from its global LNG portfolio.

Seymour Pierce analyst Sam Wahab however noted that the group currently has an asset divestment programme to reduce net debt exposure, and thinks the sudden announcement of the disposal "would suggest that the disposal of their Australian LNG interest was forced upon them rather than a strategic decision."

Sector peers Ascent Resources, Neos Resources, Solo Oil and President Energy were also falling heavily before the close.




Top performing sectors so far today
Oil Equipment, Services & Distribution 24,692.51 +1.57%
Industrial Metals & Mining 2,589.06 +1.14%
Forestry & Paper 7,346.07 +1.11%
Construction & Materials 3,380.18 +0.72%
Life Insurance 4,767.56 +0.59%

Bottom performing sectors so far today
Oil & Gas Producers 7,931.08 -2.07%
Pharmaceuticals & Biotechnology 9,507.84 -1.70%
Technology Hardware & Equipment 846.12 -1.54%
Mobile Telecommunications 3,936.63 -1.19%
Fixed Line Telecommunications 2,527.82 -1.10%

BC

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