British energy producer BG Group on Thursday said its net profits plunged 77 percent in the second quarter compared with a year earlier on a write-down to its US shale gas business. Earnings after tax stood at $283 million (230 million euros) in the three months to June 30 compared with $1.24 billion in the second quarter of 2011, BG Group said in a statement.
Revenues rose nine percent to $5.79 billion, while the company lowered its production estimate for 2012 to 720,000 barrels of oil and gas per day from 750,000 barrels. BG Group said the downward revision to output was in part owing to a gas leak that has now been plugged at the Elgin platform in the North Sea. "In the US... BG Group recorded a $1.3 billion non-cash post-tax impairment charge against our shale gas business," the company said in its earnings statement.
The write-down resulted "primarily from a change to the group's long-term US natural gas price premise," it added. Shale gas - extracted from fractures in shale or in organic material found in deposits - is considered an unconventional source of energy but is growing in importance across North America.