BG Group Shares Plunge on CEO Chris Finlayson Resignation and Egypt Crisis
BG Group shares plunge on CEO Chris Finlayson's resignation and Egypt crisisBG Group

Shares in UK oil and gas giant BG Group plunged in the opening session with news of the resignation of chief executive officer Chris Finlayson after only 16 months at the helm of the company.

The BG Group stock price plummeted by over 6.5% to 1,071.00p in the immediate opening of the London Stock Exchange. The company also said its 2014 production would likely come in at the lower end of its expectations, thanks in part to shrinking production in Egypt.

Finlayson's resignation as CEO and as an executive director of the board is with immediate effect, for personal reasons, and he will not receive any payment beyond his contractual entitlement.

Until a permanent replacement is appointed, Andrew Gould, BG Group's non-executive chairman, will take over as interim executive chairman.

A recruitment process to find an external successor to Chris is now underway. Gould will revert to the role of non-executive chairman once the new chief executive is appointed, the company said.

"I would like to thank Finlayson for his contribution to the group over the past four years and we wish him well for the future," added Gould.

"The company must accelerate the creation and delivery of the longer-term value for our shareholders, while delivering the group's business plans. The board felt that it was in the best interests of the group to accept Chris' resignation and seek fresh leadership to deliver both of these priorities."

BG Group will announce its first quarter results on 1 May, including an update on its key projects which remain on schedule.

The group said: "Egypt remains challenging, with volumes in the first quarter declining 35% from the fourth quarter of 2013 to 66 thousand barrels of oil equivalent per day (kboed).

"This is a result of deteriorating reservoir performance and the high level of diversions to the domestic market, where the group is entitled to a lower share of production.

"The group's 2014 production guidance remains unchanged at 590 - 630 kboed, although production is now expected to be at the lower end of the range given the issues in Egypt. The deterioration in Egypt will similarly impact 2015 production."