Annual Report and Accounts 2009 - BG Group

B) STANDARDISED MEASURE OF DISCOUNTED FUTURE NET CASH FLOWS
The following tables set out the standardised measure of discounted future net cash flows relating to proved gas and oil reserves and report the causes
of changes in the standardised measure of the cash flows relating to reserves. Future cash inflows have been computed by reference to the Group’s
estimate of future production of net proved gas and oil reserves at the end of each year and estimates of third-party prices. 2009 prices are calculated using
a 12-month average price in line with the revised SEC methodology effective for the year ended 31 December 2009. Prior year prices include calculations
based on year end prices for 2008 and 2007. The standardised measure of discounted future net cash flow information presented below is not intended to
represent the replacement cost or fair market value of the Group’s gas and oil properties. The disclosures shown are based on estimates of proved reserves,
future production schedules and costs, which are inherently imprecise and subject to revision. The standardised measure is as follows:
UK
£bn
Atlantic
Basin
£bn
Asia and
Middle East
£bn
As at 31 December 2007:
Future cash inflows 13.05 8.56 13.66 7.32 42.59
Future production and development costs (3.87) (1.90) (5.04) (2.16) (12.97)
Future income tax expenses (4.83) (2.85) (3.10) (2.08) (12.86)
Future net cash flows 4.35 3.81 5.52 3.08 16.76
10% annual discount for estimated timing of cash flows (1.27) (1.59) (2.80) (1.12) (6.78)
As at 31 December 2008:
3.08 2.22 2.72 1.96 9.98
Future cash inflows 10.17 8.44 13.86 5.53 38.00
Future production and development costs (4.13) (2.29) (7.72) (3.81) (17.95)
Future income tax expenses (3.52) (2.36) (1.93) (0.58) (8.39)
Future net cash flows 2.52 3.79 4.21 1.14 11.66
10% annual discount for estimated timing of cash flows (0.75) (1.44) (2.11) (0.38) (4.68)
As at 31 December 2009:
1.77 2.35 2.10 0.76 6.98
Future cash inflows 10.24 8.14 16.65 13.29 48.32
Future production and development costs (4.65) (3.00) (8.02) (7.23) (22.90)
Future income tax expenses (3.02) (1.60) (3.04) (1.89) (9.55)
Future net cash flows 2.57 3.54 5.59 4.17 15.87
10% annual discount for estimated timing of cash flows (0.65) (1.30) (2.82) (2.05) (6.82)
1.92 2.24 2.77 2.12 9.05
Rest of
World
£bn
Total
£bn
BG Group Annual Report and Accounts 2009
121
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