BG Group
Oil and gas producer BG Group raised its dividend by 10 percent for investors (Reuters)

BG Group shares dropped by as much as 2.5 percent in early London trading after the British oil and gas company said it would fail to a meet medium-term production target.

Reporting its fourth quarter and full year results, BG Group said annual earnings were up 3 percent to $4.4bn (£2.8bn, €3.26bn).

However, it added that the company would not achieve its goal of producing 1m barrels of oil equivalent per day by 2015.

"Importantly, we have begun a review of our longer-term strategy, and I look forward to sharing it with the market in May," said BG Group's Chief Executive, Chris Finlayson in a statement published on the company's website.

Fourth quarter earnings had plummeted 29 percent on the same quarter a year before, to $1bn, though BG Group blamed a one-off tax credit of $277m for the misleadingly drastic fall.

BG Group also raised its dividend by 10 percent to 26.14 cents per share.

In October, the company shaved around a fifth off of its value when it warned investors that output would be flat in 2013 because of issues in Egypt and delays in its Brazilian and North Sea projects.

The firm has reported its first production from its Sapinhoá field in Brazil, which is producing 120,000 barrels of oil per day, which is said is on schedule and budget.

Along 2013, BG Group said it expects production to be slightly down in the first half, then lower in the third quarter, before growing strongly in the fourth quarter as its Brazilian operation steps up a gear.

On the London Stock Exchange BG Shares were 1,082.28 pence at 08:48 GMT.