Equity Research

Energy | European Integrated Oil 10 September 2013

BG Group

Pressing pause
We are reducing our rating to Equal Weight. BGs share price had recovered close to 20% relative to the sector this year on the expectation that production guidance was more realistic and that the company was on the verge of delivering a sustained period of growth in both cash flow and production. Such hopes now appear to be premature. Key projects in Brazil and Australia are on track but it is further issues in Egypt, Norway and the US that have led to a reduction in BGs previous volume expectations for 2014 and highlight more caveats around 2015 guidance. We now forecast 2014 production growth at 3%, leaving the company with a growth profile, which is far less differentiated compared to others in the peer group than we previously anticipated. Longer term we do expect the company to deliver significant cash flow generation and production growth from Brazil and Australia alongside a greater focus on portfolio rationalization, but with growth pushed ever further out it is increasingly difficult to justify the premium multiple on which the stock trades. We reduce our price target to 1320p/sh and our rating to Equal Weight. Volume disappointments overshadow exploration and LNG focus: BG surprised the market with its operational update on 2014 with Egypt performing far worse than both our expectations and seemingly those of consensus. Delays in Egypt and Norway and a decision to continue to operate fewer rigs in the US combined to leave volumes approximately 47kboe/d below a company-provided consensus of 720kb/d. The decision to minimize US volumes is welcome given the economics but the issues surrounding Egypt have the potential to continue to disappoint and we now assume 3% growth for the coming year. 2015 guidance was left unchanged at 775-825kb/d but there were further caveats relating to the political situation in Egypt, suggesting that there is higher risk associated with this than we previously anticipated and we have also reduced our expectations here. Longer-term fundamentals remain in place: Longer term we continue to see BGs resource base as impressive and that progress in delivering growth volumes in Brazil and Australia remains on track is encouraging. However with the shares now trading on 9.6x 2014E EV/EBIDA, a 53% premium to the sector we see delivery on 2014 milestones as essential to driving the next leg of share price performance. BG.L: Financial and Valuation Metrics GBP
FY Dec EPS Previous EPS P/E
Source: Barclays Research.

Stock Rating

EQUAL WEIGHT
from Overweight

Industry View

POSITIVE
Unchanged

Price Target

GBP 13.20
lowered -4% from GBP 13.70

Price (09-Sep-2013) Potential Upside/Downside Tickers Market Cap (GBP mn) Shares Outstanding (mn) Free Float (%) 52 Wk Avg Daily Volume (mn) Dividend Yield (%) Return on Equity TTM (%) Current BVPS (GBP)
Source: FactSet Fundamentals

GBP 12.17 +8% BG/ LN / BG.L 41465 3407.12 98.59 6.5 1.4 12.52 6.42

Price Performance 52 Week range

Exchange-LSE GBP 13.57-9.91

Link to Barclays Live for interactive charting

European Integrated Oil Rahim Karim, CFA +44 (0)20 3134 1853 rahim.karim@barclays.com Barclays, London

2011 0.85A 0.85A 14.4

2012 0.81A 0.81A 15.1

2013 0.78E 0.78E 15.6

2014 0.85E 0.92E 14.3

2015 1.08E 1.13E 11.3

Lydia Rainforth, CFA +44 (0)20 3134 6669 lydia.rainforth@barclays.com Barclays, London Joshua Stone +44 (0)20 3134 6694 joshua.stone@barclays.com Barclays, London

Barclays Capital Inc. and/or one of its affiliates does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. This research report has been prepared in whole or in part by equity research analysts based outside the US who are not registered/qualified as research analysts with FINRA. PLEASE SEE ANALYST CERTIFICATION(S) AND IMPORTANT DISCLOSURES BEGINNING ON PAGE 11.

Barclays | BG Group
European Integrated Oil Industry View: POSITIVE Stock Rating: EQUAL WEIGHT 2012A 8,054 10,564 8,098 4,379 0.81 1.28 3,415 0.26 2013E 7,474 10,571 8,224 4,117 0.78 1.20 3,417 0.29 2014E 8,008 11,287 8,798 4,496 0.85 1.32 3,418 0.32 2015E 10,162 14,289 10,886 5,724 1.08 1.67 3,418 0.35 CAGR 8.1% 10.6% 10.4% 9.3% 10.1% 9.3% 0.0% 10.0% Average 9.5 12.9 5.7 CAGR 10.3% 0.0% 15.1% 11.2% 11.5% 9.0% N/A N/A N/A N/A N/A Average 14.1 6.9 8.9 -3.7 1.7 1.6 27 36 21.5 POINT Quantitative Equity Scores Price (09-Sep-2013) GBP 12.17 Price Target GBP 13.20 Why Equal Weight? Key projects in Brazil and Australia are on track but it is further issues in Egypt, Norway and the US that have led to us to believe production growth in 2014 will be less differentiated versus peers. Longer term we still expect significant growth, but with growth pushed further out it is difficult to justifly the premium mulitple on which the stock trades. Upside case GBP 14.10 If we were to assume that BG is able to deliver on the upper end of its 2015 production target of 775-825 k boe/d this would lift our NAV by around 90p. Downside case GBP 9.00 A year delay in the start-up of the group's QCLNG project in Australia and a 15% cost over-run in Brazil would reduce our NAV by 200p. To reflect the increased execution risk, we believe it would be appropriate for the shares to trade at a 20% discount to NAV. Upside/Downside scenarios

BG Group (BG.L)
Income statement ($mn) Operating profit (adj) EBITDA (adj) EBIDA (adj) Net income (adj) EPS (adj) () EPS (adj, alt currency) ($) Diluted shares (mn) DPS ($) Return data ROACE (%) ROAE (%) ROMC (%) Balance sheet and cash flow ($mn) Shareholders' equity Minorities Net debt/(funds) Total debt Capital employed Cash flow from operations Capital expenditure Dividends paid Net cash from operations Free cash flow Net cash surplus/(deficit) Valuation and leverage metrics P/E (adj) (x) EV/EBITDA (adj) (x) EV/EBIDA (adj) (x) FCF yield (%) P/BV (x) Dividend yield (%) Net debt/capital (%) Net debt/equity (%) EV/1P reserves ($/boe) Selected operating metrics Upstream Oil production (000 b/d) Gas production (000 cf/d) Total production (000 boe/d) Net income ($/boe) Reserves (mn boe) Reserve life (years) F&D cost ($/bl) RRR (%) Downstream Refining capacity (000 b/d) Refining throughput (000 b/d)

10.4 14.1 5.4

9.1 11.9 5.2

8.8 11.9 5.4

9.9 13.7 6.7

32,891 57 11,048 15,507 43,996 7,995 -9,556 -877 -2,438 -1,561 891

36,072 57 11,662 16,121 47,791 7,681 -12,010 -936 -5,265 -4,329 -614

39,529 44,118 57 57 16,348 16,855 20,807 21,314 55,934 61,030 8,254 10,343 -12,252 -10,065 -1,039 -1,135 -5,036 -857 -3,997 278 -4,686 -507

15.1 7.2 9.4 -2.4 2.0 1.4 25 34 21.5

15.6 7.3 9.4 -6.6 1.8 1.5 24 32 N/A

14.3 7.2 9.3 -6.1 1.7 1.7 29 41 N/A

11.3 5.8 7.6 0.4 1.5 1.8 28 38 N/A

Value
173 484 657 10.6 3,431 14.3 18.6 177 0 0 186 464 650 10.1 N/A N/A N/A N/A 0 0 198 465 664 11.5 N/A N/A N/A N/A 0 0 253 497 750 14.7 N/A N/A N/A N/A 0 0

Quality

Sentiment

Low

High

Source: POINT. The scores are valid as of the date of this report and are independent of the fundamental analysts' views. To view the latest scores, click here.

Source: Company data, Barclays Research Note: FY End Dec

10 September 2013

Barclays | BG Group

Disappointing update on 2014 milestones

BG released an operational update alongside a capital markets day presentation that focused on exploration and LNG. Key takeaways are as follows:

All 2013 guidance unchanged. QCLNG project in Australia remains on schedule with first gas into the plant expected
around year-end.

2014 milestones delayed. Combined impact on 2014 production of 30kboe/d from a four-month delay in both the
West Delta Deep Marine phase 9a project in Egypt and the Knarr project in Norway.

Reduction by a further 17kboe/d in the US following a decision to operate fewer rigs in

the area. In the presentations BG mentioned this could actually be enhancing to cash flow.

2015 production guidance of 775-825kboe/d remains unchanged. In exploration the target is to add 0.5-1.0bn boe of resources every year Exploration projects should provide one of four competitive advantages to the BG
Group.

LNG markets to remain tight. BG do not see the LNG business as a trading business. Active portfolio management will remain part of the groups strategy.

Significant reduction in guidance for 2014

Although BG left all guidance for 2013 unchanged, it provided what we see as a disappointing update for 2014 alongside the Capital Markets Day. In particular, versus consensus of 720kboe/d, the group now expects production 47kboe/d lower than previously. This would reduce growth expectations by 6-7%. Lower production expectations are the result of a range of issues and are summarised below.

Four month delay at the Knarr project in Norway with the scope of the project being
changed.

A further four-month delay in Egypt at phase 9a of the West Delta Deep Marine project
to later in 2014 due to on-going political and social instability in the country.

The combined impact from Egypt and Norway is a reduction of approximately 30

kboe/d in 2014.

A 17kb/d reduction in the US with continuing low natural gas prices leading BG to an
economic decision to continue to operate fewer rigs. Given our previous forecast of 719kboe/d for 2014 production for BG, the direct impact from the data released by the company is to reduce our estimate to 672kboe/d. Although we had been conservative in our volume estimate for the US it appears we may not have included enough contingencies elsewhere. Further to this direct impact, we have also incorporated continued weakness in Egypt taking our volume estimates to 664kboe/d in turn taking our estimate of growth for the year to close to 3%.

10 September 2013

Barclays | BG Group

Much larger declines in Egypt than anticipated

Due to the ongoing political and social instability in Egypt, phase 9a of West Delta Deep Marine has suffered a delay of around four months and BG now expects a later start-up for the project than originally planned in 2014. Given the groups guidance of 30kboe/d lower volumes in 2014 from Egypt and Norway combined, we estimate Egypt has contributed 22kboe/d to the lower volumes announced. Rather than provide large amounts of growth, Phase 9a of the WDDM was a project designed to arrest production decline. It appears to us therefore that the potential production declines in Egypt are much more severe than we had anticipated. Where we had originally forecast Egyptian production declines of 7% to 2017, we have lowered this to 10%. The WDDM field has had a history of operational issues with the compression pump installed during Phase 7 contributing less production than planned. At the time, BG indicated that the failure to stem declines was primarily a result of reduced pressure at the field, following years of strong liquids production, rather than any structural issues with the reservoir.

Weak gas environment forces even lower activity in the US but is the right decision
In its main presentation BG suggested that the reduction of 17kboe/d of US volumes relative to its previous expectations could actually be enhancing to cash flow. As a result we are not unduly concerned about the cut to US volumes.

7.5pp cut to 2014 growth aspirations

Including the lower volume expectations into our 2014 production forecasts means we now expect growth for the group of 3% y/y. This is down significantly from prior expectations of over 10.5% and essentially in-line with our estimate for growth from the rest of the sector. FIGURE 1 2014 production growth of BG versus the rest of the sector
% 24 20 16 12 8 4 0 BP RDS TOT BG ENI GALP OMV Sector average REP STL 2014 production growth
Source: Company data, Barclays Research

Lowering our longer term production forecasts

Despite BG reducing expectations for 2014 volumes, it left its 2015 production guidance of 775-825 kboe/d unchanged. However, the group were cautious to note that this target is contingent to a recovery in US natural gas prices and future events in Egypt. We believe risks are now to the downside and have lowered our 2015 production expectations by nearly 6pp to 750kboe/d. With these new forecasts, we expect 4.5% growth pa from 2012 2015 versus guidance of 6-8%. This compares with an average growth of 1.3% pa from the rest of the sector over the same period.
10 September 2013 4

Barclays | BG Group

FIGURE 2 2012-2015 production growth of BG versus the rest of the sector

% 10 8 6 4 2 0 -2 BP RDS TOT BG ENI OMV Group average REP STL

2012-2015 CAGR
Source: Company data, Barclays Research

Using BGs exploration strength

Away from the 2014 operational disappointments the wider takeaways from the capital markets day were encouraging, notably in exploration. BG is hoping an increasing exploration budget ($1.6-1.8bn pa) will allow it to sustain its historical exploration success, and deliver 0.5-1bn boe of new resource pa. The strategy supporting this spend is a balance between frontier plays and extending its foot print in existing hubs such as Brazil and Australia. During his presentation Malcolm Brown, EVP for exploration, indicated that the company was keen to enter at least one new frontier basin with unrisked resource potential of at least 1bn boe per annum. To this point the company highlighted its recent entry into Honduras where 3D seismic is expected to be shot in 2014 and 2015, and the first well spudded in 2016. Before this, BG hopes to test the potential of offshore Kenya (early 2014) and Uruguay also in 2016. The presentation also detailed more of BGs approach to which projects it should pursue. For example of over 100 prospects screened during 2012 only four were presented to senior management. The four key criteria on which BG base its selection criteria are for projects where:

BG is an early entrant Has distinctive knowledge (eg carbonates, tertiary deltas, HPHT) There is an associated LNG opportunity Or it is part of a wider hub strategy
Overall the presentation was a reminder that BG has been very successful in recent years in its exploration programme and that it has more opportunities to deliver longer-term growth outside of Brazil.

LNG not a trading business

The focus on the LNG business served two purposes. The first was to emphasise that the management team do not see the LNG business as simply a trading business, rather that it is a source of both sustainable profitability and growth. The second was to highlight that just how tight BG continue to see the LNG market with supply likely to be the constraining factor.
10 September 2013 5

Barclays | BG Group Outside of QCLNG trains one and two the management provided an assessment of the possible growth opportunities available to the group. To this point, BG detailed four LNG projects that the company are currently considering. These include Prince Rupert (~14mtpa) and Lake Charles (15mtpa) in North America, Tanzania (~10mtpa) in Africa and a third train (4.25mtpa) at the QCLNG project in Australia. It is currently too early for us to include these within our forecasts but we recognise that these could offer a source of upside to profitability longer term. The chart below shows our estimates of nearer term LNG profitability and volumes. LNG to deliver material growth over 2012-16 period
25 Volumes, mtpa EBIT, $bn (RHS) 3.0 2.9 20 2.8 2.7 15 2.6 2.5 10 2.4 2.3 5 2.2 2.1 0 2012 2013 2014 2015 2016
Source: Company data, Barclays estimates

2.0

Divestments key to long term upside but unlikely shorter term

A key theme throughout both the exploration and LNG updates was that of active portfolio management with the company willing and able to sell assets at an optimal time in order to keep capex below the previous target of $8-10bn. Previously BGs management has indicated that in addition to producing 25% of its current discovered resource base, it hopes to monetise a further 25% over the next 10 years. In turn this implies that the company will be selling around 3.5bn boe, suggesting the sale of assets will be as an important delivery of value creation as development. Whilst we continue to believe that the ambition to sell 25% of its current resource base will help drive long term shareholder returns, we see any material progress near term as unlikely. This reflects the group's current negative free cash flow position and management's ambition to try and retain its A credit rating. With the rating agencies generally preferring operating cash flow over divestment proceeds, we believe that the sale of any material production assets is unlikely till post 2015 once QCLNG is onstream and its Brazilian volumes are materially higher. In terms of non-producing assets, we believe that the company will look to exit its position in Tanzania at some stage, but believe this isn't likely for a couple of years as the asset's value is improved via incremental appraisal and engineering. EPS changes
p/share New EPS Old EPS Change 2013F 77.9 77.9 0% 2014F 84.9 91.5 -7% 2015F 108.0 113.1 -4% 2016F 127.3 132.4 -4% 2017F 142.9 147.7 -3%

We have reduced our 2014-17 estimates by an average of 5% to reflect the lower than expected medium term outlook for upstream volumes. We leave our 2013 estimate broadly unchanged.

Source: Company data, Barclays Research

10 September 2013

Barclays | BG Group

BG MODEL
Earnings
$bn Modelling assumptions: Oil price, Brent, $/bl UK natural gas, NBP p/therm Exchange rate, $: Financial forecasts Exploration & Production LNG T&D Power Generation Other Operations Adjusted operating profit Interest Pre-tax profit Taxation Tax rate, % Minorities Adjusted net income % Change GBP net income % Change Special items % Impact of special items Reported net income 4.78 1.05 0.49 0.26 (0.07) 6.51 (0.05) 6.45 (2.77) 43 (0.11) 3.57 19 1.78 9 (0.08) (2) 3.49 6.58 2.91 0.31 0.22 (0.04) 10.00 0.04 10.04 (4.27) 43 (0.05) 5.71 60 3.08 73 0.09 1 5.80 3.22 2.39 0.71 0.11 (0.02) 6.41 (0.20) 6.20 (2.61) 42 (0.15) 3.44 (40) 2.20 (29) (0.12) (4) 3.32 3.77 2.45 0.71 0.00 (0.00) 6.92 (0.16) 6.77 (2.61) 39 (0.15) 4.01 17 2.60 18 (0.66) (17) 3.35 5.15 2.57 0.51 0.00 (0.02) 8.21 (0.22) 7.99 (3.27) 41 (0.09) 4.63 15 2.89 11 (0.39) (9) 4.24 5.47 2.58 0.00 0.00 0.01 8.05 (0.14) 7.92 (3.54) 45 (0.00) 4.38 (5) 2.76 (4) (1.00) (23) 3.38 4.94 2.51 0.00 0.00 0.03 7.47 (0.12) 7.35 (3.24) 44 0.00 4.12 (6) 2.66 (4) (0.13) (3) 3.99 4.50 5.72 6.75 7.57 5.53 2.45 0.00 0.00 0.03 8.01 (0.12) 7.89 (3.39) 43 0.00 4.50 9 2.90 9 7.63 2.50 0.00 0.00 0.03 10.16 (0.12) 10.04 (4.32) 43 0.00 5.72 27 3.69 27 8.98 2.93 0.00 0.00 0.03 11.94 (0.11) 11.83 (5.09) 43 0.00 6.75 18 4.35 18 10.43 2.92 0.00 0.00 0.03 13.38 (0.10) 13.28 (5.71) 43 0.00 7.57 12 4.89 12 72.7 29.9 2.00 98.1 58.2 1.85 62.2 31.1 1.56 79.7 42.5 1.55 111.0 56.8 1.60 112.1 59.6 1.59 107.7 67.4 1.55 105.0 67.5 1.55 105.0 67.5 1.55 105.0 67.5 1.55 98.8 65.0 1.55 2007A 2008A 2009A 2010A 2011A 2012A 2013F 2014F 2015F 2016F 2017F

EPS calculation
2007A Adjusted net income, $bn Average shares in issue, bn Potential shares, bn Diluted shares in issue, bn Adjusted EPS, p % Change Adjusted E/ADR, $ % Change DPS, p % Change Dividend per ADR, $ % Change Payout ratio, %
Source: Company data, Barclays Research

2008A 5.71 3.35 0.03 3.38 91.2 75 8.44 62 11.23 20 1.04 11 12

2009A 3.44 3.36 0.03 3.39 65.0 (29) 5.08 (40) 12.35 10 0.96 (7) 19

2010A 4.01 3.38 0.02 3.40 76.3 17 5.90 16 13.66 11 1.08 12 18

2011A 4.63 3.39 0.02 3.41 84.7 11 6.79 15 14.82 8 1.19 10 17

2012A 4.38 3.40 0.02 3.42 80.8 (5) 6.41 (6) 16.67 12 1.31 10 20

2013F 4.12 3.40 0.02 3.42 77.9 (4) 6.02 (6) 18.58 11 1.44 10 24

2014F 4.50 3.40 0.02 3.42 84.9 9 6.58 9 20.41 10 1.58 10 24

2015F 5.72 3.40 0.02 3.42 108.0 27 8.37 27 22.45 10 1.74 10 21

2016F 6.75 3.40 0.02 3.42 127.3 18 9.87 18 24.69 10 1.91 10 19

2017F 7.57 3.40 0.02 3.42 142.9 12 11.08 12 27.16 10 2.10 10 19

3.57 3.39 0.03 3.42 52.2 12 5.23 21 9.36 30 0.94 41 18

10 September 2013

Barclays | BG Group

Cash flow
$bn Adjusted net income Minorities Adjusted depreciation Exploration costs written off Deferred taxation Post tax int charge on debt EBIDA Less post tax interest charge Working capital movement Other movements Equity income retained Cash flow from operations per share, p Capital expenditure Dividends Net free cash flow Non recurring items: Acquisitions Divestments Share issuance (repurchase) All other items inc debt issue Surplus (deficit) FCF cover of div, x (0.99) 0.93 (1.01) 0.61 0.82 3.1 (3.82) 0.03 (0.31) 0.11 (1.97) 3.8 (1.81) 0.01 0.10 3.35 (0.39) (1.9) (1.79) 1.37 0.09 4.44 1.40 (2.4) (0.25) 0.20 0.03 5.41 1.11 (3.7) (0.43) 2.94 0.02 0.80 0.89 (1.8) 0.00 4.30 0.00 0.35 (0.61) (4.6) 0.00 0.00 0.00 0.35 (4.69) (3.8) 0.00 0.00 0.00 0.35 (0.51) 0.2 0.00 0.00 0.00 0.35 0.42 1.1 0.00 0.00 0.00 0.35 1.45 1.8 2007A 3.57 0.11 1.36 0.21 0.87 (0.03) 6.09 0.03 (0.25) (0.19) (0.20) 5.49 81 (3.60) (0.60) 1.28 2008A 5.71 0.05 1.63 0.44 0.79 (0.08) 8.55 0.08 0.08 (0.39) (0.18) 8.13 131 (5.41) (0.71) 2.01 2009A 3.44 0.15 1.75 0.55 0.55 0.10 6.54 (0.10) (0.67) (0.08) (0.16) 5.53 105 (6.87) (0.69) (2.03) 2010A 4.01 0.15 2.13 0.38 0.62 0.07 7.36 (0.07) (0.77) 0.11 (0.24) 6.39 122 (8.31) (0.79) (2.71) 2011A 4.63 0.09 2.29 0.29 0.48 0.06 7.84 (0.06) (0.57) 0.04 (0.27) 6.98 128 (10.35) (0.91) (4.28) 2012A 4.38 0.00 2.51 0.34 0.82 0.05 8.10 (0.05) (0.18) 0.41 (0.29) 8.00 148 (9.56) (0.88) (2.44) 2013F 4.12 0.00 3.10 0.37 0.60 0.04 8.22 (0.04) (0.30) 0.00 (0.20) 7.68 146 (12.01) (0.94) (5.27) 2014F 4.50 0.00 3.28 0.38 0.60 0.04 8.80 (0.04) (0.30) 0.00 (0.20) 8.25 157 (12.25) (1.04) (5.04) 2015F 5.72 0.00 4.13 0.39 0.60 0.04 10.89 (0.04) (0.30) 0.00 (0.20) 10.34 196 (10.07) (1.13) (0.86) 2016F 6.75 0.00 4.63 0.41 0.60 0.04 12.42 (0.04) (0.30) 0.00 (0.20) 11.88 226 (10.57) (1.24) 0.07 2017F 7.57 0.00 5.47 0.41 0.60 0.03 14.09 (0.03) (0.30) 0.00 (0.20) 13.56 257 (11.10) (1.36) 1.10

Source: Company data, Barclays Research

10 September 2013

Barclays | BG Group

Balance sheet
$bn Ordinary shareholders' funds Minorities Net debt Capital employed Additional items: NBV per share, p Net debt per share, p Balance sheet analysis: Net debt to equity, % Net debt to capital, % RoAE, % RoACE, % Accumulated depreciation Cash invested CROCI, % 0.1 0.1 26.6 26.3 9.5 24.1 25.3 8.3 7.6 34.9 32.8 9.0 29.0 29.5 21.3 17.4 16.7 15.3 10.6 38.8 16.9 26.4 20.6 16.3 13.7 11.7 45.3 16.2 38.8 27.7 16.6 12.8 13.8 54.8 14.3 33.6 25.1 14.1 10.4 15.3 59.3 13.6 32.3 24.4 11.9 9.1 17.3 65.1 12.6 41.4 29.2 11.9 8.8 19.5 75.4 11.7 38.2 27.6 13.7 9.9 22.1 83.1 13.1 33.1 24.9 14.4 10.7 25.1 91.2 13.6 26.8 21.1 14.4 11.1 28.6 99.5 14.2 213 0 381 31 422 90 504 133 540 209 611 205 686 222 751 310 838 320 942 312 1,060 284 2007A 14.38 0.26 0.02 14.66 2008A 18.34 0.18 1.52 20.04 2009A 22.91 0.32 4.89 28.12 2010A 26.33 0.36 6.94 33.62 2011A 29.38 0.29 11.40 41.07 2012A 32.89 0.06 11.05 44.00 2013F 36.07 0.06 11.66 47.79 2014F 39.53 0.06 16.35 55.93 2015F 44.12 0.06 16.85 61.03 2016F 49.62 0.06 16.43 66.11 2017F 55.83 0.06 14.98 70.87

Return on capital calculation

$ bn Adjusted net income Minorities Pre-tax net interest Tax rate, % Post-tax interest Post-tax operating profit Av. capital employed RoACE, % 2007A 3.57 0.11 (0.05) 43 (0.03) 3.65 13.85 26.3 2008A 5.71 0.05 (0.13) 43 (0.08) 5.69 17.35 32.8 2009A 3.44 0.15 0.18 42 0.10 3.70 24.08 15.3 2010A 4.01 0.15 0.11 39 0.07 4.23 30.87 13.7 2011A 4.63 0.09 0.10 41 0.06 4.78 37.35 12.8 2012A 4.38 0.00 0.09 45 0.05 4.43 42.53 10.4 2013F 4.12 0.00 0.08 44 0.04 4.16 45.89 9.1 2014F 4.50 0.00 0.08 43 0.04 4.54 51.86 8.8 2015F 5.72 0.00 0.08 43 0.04 5.77 58.48 9.9 2016F 6.75 0.00 0.07 43 0.04 6.78 63.57 10.7 2017F 7.57 0.00 0.06 43 0.03 7.60 68.49 11.1

Balance sheet segments

Capital employed by segment, 2012A Gas & Power 23% Net debt to EBITDA x 2.0 1.8 1.6 1.4 1.2 1.0 0.8 0.6 0.4 E&P 77% 0.2 0.0 07A 09A 011A 013F 15F 17F

Note: Data for 2013-2017 are Barclays estimates.

Source: Company data, Barclays Research

10 September 2013

Barclays | BG Group

Comparative valuations
Company Closing Price 08-Sept Majors BP Chevron* ExxonMobil* Royal Dutch Shell A Royal Dutch Shell B Total Arithmetic Average Euro Integrated Oil BG Group Eni Galp MOL OMV Repsol Statoil Arithmetic Average 1282 17.4 13.4 16050 36.0 18.4 136 9.7 5.0 14.6 5.4 4.4 5.9 4.3 7.0 9.6 4.2 14.7 5.5 4.5 5.5 4.0 6.9 7.8 4.0 12.1 5.0 4.6 5.1 4.0 6.1 16.5 12.1 33.2 9.6 8.8 12.3 9.6 14.6 15.1 9.1 28.5 10.4 9.4 11.5 9.9 13.4 11.9 8.6 21.7 9.8 9.4 10.3 9.9 11.7 1.4 6.3 2.2 3.1 3.5 5.4 5.1 3.9 1.6 6.5 2.6 2.9 3.5 5.4 5.3 4.0 1.8 6.7 3.1 3.1 3.5 5.4 5.5 4.1 446 121 87.3 2079 2162 42.4 5.3 6.6 8.4 5.2 5.4 4.8 6.0 4.9 6.6 8.4 5.1 5.3 4.6 5.8 4.8 6.2 8.1 5.0 5.2 4.5 5.6 8.8 10.4 11.9 8.5 8.8 8.6 9.5 8.2 10.5 12.0 8.7 9.0 8.6 9.5 8.2 9.8 11.6 8.8 9.1 8.9 9.4 5.3 3.2 2.8 5.6 5.4 5.7 4.7 5.6 3.5 3.1 5.9 5.6 5.8 4.9 5.9 3.9 3.4 6.1 5.9 5.9 5.2 2013F EV/EBIDA, x 2014F 2015F 2013F P/E, x 2014F 2015F Dividend yield, % 2013F 2014F 2015F

Source: Barclays Research * Covered by Paul Cheng, Barclays, New York

10 September 2013

10

Barclays | BG Group

ANALYST(S) CERTIFICATION(S):
We, Rahim Karim, CFA and Lydia Rainforth, CFA, hereby certify (1) that the views expressed in this research report accurately reflect our personal views about any or all of the subject securities or issuers referred to in this research report and (2) no part of our compensation was, is or will be directly or indirectly related to the specific recommendations or views expressed in this research report. The POINT Quantitative Equity Scores (POINT Scores) referenced herein are produced by the firms POINT quantitative model and Barclays hereby certifies that (1) the views expressed in this research report accurately reflect the firm's POINT Scores model and (2) no part of the firm's compensation was, is or will be directly or indirectly related to the specific recommendations or views expressed in this research report.

IMPORTANT DISCLOSURES CONTINUED

Barclays Research is a part of the Corporate and Investment Banking division of Barclays Bank PLC and its affiliates (collectively and each individually, "Barclays"). For current important disclosures regarding companies that are the subject of this research report, please send a written request to: Barclays Research Compliance, 745 Seventh Avenue, 14th Floor, New York, NY 10019 or refer to http://publicresearch.barclays.com or call 212-526-1072. The analysts responsible for preparing this research report have received compensation based upon various factors including the firm's total revenues, a portion of which is generated by investment banking activities. Research analysts employed outside the US by affiliates of Barclays Capital Inc. are not registered/qualified as research analysts with FINRA. These analysts may not be associated persons of the member firm and therefore may not be subject to NASD Rule 2711 and incorporated NYSE Rule 472 restrictions on communications with a subject company, public appearances and trading securities held by a research analysts account. Analysts regularly conduct site visits to view the material operations of covered companies, but Barclays policy prohibits them from accepting payment or reimbursement by any covered company of their travel expenses for such visits. In order to access Barclays Statement regarding Research Dissemination Policies and Procedures, please refer to https://live.barcap.com/publiccp/RSR/nyfipubs/disclaimer/disclaimer-research-dissemination.html. In order to access Barclays Research Conflict Management Policy Statement, please refer to: http://group.barclays.com/corporates-and-institutions/research/research-policy. The Corporate and Investment Banking division of Barclays produces a variety of research products including, but not limited to, fundamental analysis, equity-linked analysis, quantitative analysis, and trade ideas. Recommendations contained in one type of research product may differ from recommendations contained in other types of research products, whether as a result of differing time horizons, methodologies, or otherwise. Primary Stocks (Ticker, Date, Price) BG Group (BG.L, 09-Sep-2013, GBP 12.17), Equal Weight/Positive, C/D/E/J/K/L/M/N Other Material Conflicts: The Corporate and Investment Banking division of Barclays is providing investment banking services to BG Group PLC in connection with the sale of certain interests in Queensland Curtis LNG to China National Offshore Oil Corporation (CNOOC). The effects of this transaction has not been incorporated into the analysts views due to Barclays role in this potential transaction.

Disclosure Legend: A: Barclays Bank PLC and/or an affiliate has been lead manager or co-lead manager of a publicly disclosed offer of securities of the issuer in the previous 12 months. B: An employee of Barclays Bank PLC and/or an affiliate is a director of this issuer. C: Barclays Bank PLC and/or an affiliate is a market-maker and/or liquidity provider in securities issued by this issuer or one of its affiliates. D: Barclays Bank PLC and/or an affiliate has received compensation for investment banking services from this issuer in the past 12 months. E: Barclays Bank PLC and/or an affiliate expects to receive or intends to seek compensation for investment banking services from this issuer within the next 3 months. F: Barclays Bank PLC and/or an affiliate beneficially owned 1% or more of a class of equity securities of the issuer as of the end of the month prior to the research report's issuance. G: One of the analysts on the coverage team (or a member of his or her household) owns shares of the common stock of this issuer. H: This issuer beneficially owns 5% or more of any class of common equity securities of Barclays Bank PLC. I: Barclays Bank PLC and/or an affiliate has a significant financial interest in the securities of this issuer. J: Barclays Bank PLC and/or an affiliate trades regularly in the securities of this issuer. K: Barclays Bank PLC and/or an affiliate has received non-investment banking related compensation from this issuer within the past 12 months. L: This issuer is, or during the past 12 months has been, an investment banking client of Barclays Bank PLC and/or an affiliate. M: This issuer is, or during the past 12 months has been, a non-investment banking client (securities related services) of Barclays Bank PLC and/or an affiliate. N: This issuer is, or during the past 12 months has been, a non-investment banking client (non-securities related services) of Barclays Bank PLC and/or an affiliate. O: Barclays Capital Inc., through Barclays Market Makers, is a Designated Market Maker in this issuer's stock, which is listed on the New York 10 September 2013 11

Barclays | BG Group

IMPORTANT DISCLOSURES CONTINUED

Stock Exchange. At any given time, its associated Designated Market Maker may have "long" or "short" inventory position in the stock; and its associated Designated Market Maker may be on the opposite side of orders executed on the floor of the New York Stock Exchange in the stock. P: A partner, director or officer of Barclays Capital Canada Inc. has, during the preceding 12 months, provided services to the subject company for remuneration, other than normal course investment advisory or trade execution services. Q: The Corporate and Investment Banking division of Barclays Bank PLC, is a Corporate Broker to this issuer. R: Barclays Capital Canada Inc. and/or an affiliate has received compensation for investment banking services from this issuer in the past 12 months. S: Barclays Capital Canada Inc. is a market-maker in an equity or equity related security issued by this issuer.

Guide to the Barclays Fundamental Equity Research Rating System: Our coverage analysts use a relative rating system in which they rate stocks as Overweight, Equal Weight or Underweight (see definitions below) relative to other companies covered by the analyst or a team of analysts that are deemed to be in the same industry (the "industry coverage universe"). In addition to the stock rating, we provide industry views which rate the outlook for the industry coverage universe as Positive, Neutral or Negative (see definitions below). A rating system using terms such as buy, hold and sell is not the equivalent of our rating system. Investors should carefully read the entire research report including the definitions of all ratings and not infer its contents from ratings alone. Stock Rating Overweight - The stock is expected to outperform the unweighted expected total return of the industry coverage universe over a 12-month investment horizon. Equal Weight - The stock is expected to perform in line with the unweighted expected total return of the industry coverage universe over a 12month investment horizon. Underweight - The stock is expected to underperform the unweighted expected total return of the industry coverage universe over a 12-month investment horizon. Rating Suspended - The rating and target price have been suspended temporarily due to market events that made coverage impracticable or to comply with applicable regulations and/or firm policies in certain circumstances including where the Corporate and Investment Banking Division of Barclays is acting in an advisory capacity in a merger or strategic transaction involving the company. Industry View Positive - industry coverage universe fundamentals/valuations are improving. Neutral - industry coverage universe fundamentals/valuations are steady, neither improving nor deteriorating. Negative - industry coverage universe fundamentals/valuations are deteriorating. Below is the list of companies that constitute the "industry coverage universe": European Integrated Oil BG Group (BG.L) Galp Energia (GALP.LS) Repsol (REP.MC) Statoil ASA (STL.OL) Distribution of Ratings: Barclays Equity Research has 2409 companies under coverage. 44% have been assigned an Overweight rating which, for purposes of mandatory regulatory disclosures, is classified as a Buy rating; 50% of companies with this rating are investment banking clients of the Firm. 40% have been assigned an Equal Weight rating which, for purposes of mandatory regulatory disclosures, is classified as a Hold rating; 46% of companies with this rating are investment banking clients of the Firm. 13% have been assigned an Underweight rating which, for purposes of mandatory regulatory disclosures, is classified as a Sell rating; 43% of companies with this rating are investment banking clients of the Firm. Guide to the Barclays Research Price Target: Each analyst has a single price target on the stocks that they cover. The price target represents that analyst's expectation of where the stock will trade in the next 12 months. Upside/downside scenarios, where provided, represent potential upside/potential downside to each analyst's price target over the same 12-month period. Guide to the POINT Quantitative Equity Scores: The POINT Quantitative Equity Scores (POINT Scores) are based on consensus historical data and are independent of the Barclays fundamental analysts views. Each score is composed of a number of standard industry metrics. 10 September 2013 12 BP (BP.L) MOL (MOLB.BU) Royal Dutch Shell A (RDSa.L) Total (TOTF.PA) Eni (ENI.MI) OMV (OMVV.VI) Royal Dutch Shell B (RDSb.L)

Barclays | BG Group

IMPORTANT DISCLOSURES CONTINUED

A high/low Value score indicates attractive/unattractive valuation. Measures of value include P/E, EV/EBITDA and Free Cash Flow. A high/low Quality score indicates financial statement strength/weakness. Measures of quality include ROIC and corporate default probability. A high/low Sentiment score indicates bullish/bearish market sentiment. Measures of sentiment include price momentum and earnings revisions. These scores are valid as of the date of this report. To view the latest scores, which are updated monthly, click here. For a more detailed description of the underlying methodology for each score, please click here. Barclays offices involved in the production of equity research: London Barclays Bank PLC (Barclays, London) New York Barclays Capital Inc. (BCI, New York) Tokyo Barclays Securities Japan Limited (BSJL, Tokyo) So Paulo Banco Barclays S.A. (BBSA, So Paulo) Hong Kong Barclays Bank PLC, Hong Kong branch (Barclays Bank, Hong Kong) Toronto Barclays Capital Canada Inc. (BCCI, Toronto) Johannesburg Absa Capital, a division of Absa Bank Limited (Absa Capital, Johannesburg) Mexico City Barclays Bank Mexico, S.A. (BBMX, Mexico City) Taiwan Barclays Capital Securities Taiwan Limited (BCSTW, Taiwan) Seoul Barclays Capital Securities Limited (BCSL, Seoul) Mumbai Barclays Securities (India) Private Limited (BSIPL, Mumbai) Singapore Barclays Bank PLC, Singapore branch (Barclays Bank, Singapore)

10 September 2013

13

Barclays | BG Group

IMPORTANT DISCLOSURES CONTINUED

BG Group (BG/ LN / BG.L)

GBP 12.17 (09-Sep-2013) Rating and Price Target Chart - GBP (as of 09-Sep-2013)
20

Stock Rating EQUAL WEIGHT Currency=GBP Date 22-Aug-2013 03-Jul-2013 15-May-2013 06-Feb-2013 14-Dec-2012 01-Nov-2012 27-Jul-2012 04-May-2012 25-Apr-2012 10-Feb-2012 01-Jul-2011 Closing Price 11.68 11.06 12.23 11.35 10.42 11.02 12.54 13.64 14.12 14.79 14.28 13.67 15.33 13.03 11.62 12.62 Overweight Rating

Industry View POSITIVE

Price Target 13.70 13.50 14.00 14.20 14.50 14.90 18.00 18.30 18.50 18.00 17.00 16.50 17.00 16.00 15.00 14.10

18

16

14

12

10

11-May-2011 25-Mar-2011
Jan- 2011 Jul- 2011 Closing Price Jan- 2012 Jul- 2012 Jan- 2013 Rating Change Jul- 2013

10-Dec-2010 30-Nov-2010 03-Nov-2010

Target Price

Link to Barclays Live for interactive charting

C: Barclays Bank PLC and/or an affiliate is a market-maker and/or liquidity provider in securities issued by BG Group or one of its affiliates. D: Barclays Bank PLC and/or an affiliate has received compensation for investment banking services from BG Group in the past 12 months. E: Barclays Bank PLC and/or an affiliate expects to receive or intends to seek compensation for investment banking services from BG Group within the next 3 months. J: Barclays Bank PLC and/or an affiliate trades regularly in the securities of BG Group. K: Barclays Bank PLC and/or an affiliate has received non-investment banking related compensation from BG Group within the past 12 months. L: BG Group is, or during the past 12 months has been, an investment banking client of Barclays Bank PLC and/or an affiliate. M: BG Group is, or during the past 12 months has been, a non-investment banking client (securities related services) of Barclays Bank PLC and/or an affiliate. N: BG Group is, or during the past 12 months has been, a non-investment banking client (non-securities related services) of Barclays Bank PLC and/or an affiliate. Valuation Methodology: Our price target for BG Group's shares is derived using a discounted cash flow methodology, using a 10% discount rate. Our calculation includes our estimate of value created from future growth based on the company's past and expected future return spread over its cost of capital. The cash flows in our calculation comprise both dollar and local currencies. Our price target is set in local currency, based on the dollar exchange rate on the date the target is initially published. Subsequently, the corresponding ADR price target in US dollars will move with the prevailing exchange rate on a daily basis. If the dollar exchange rate relative to the local currency moves significantly compared with the rate used when the local currency price target was initially published, we re-calculate and re-publish the local currency price targets using the current dollar exchange rates. Our price targets are not market-linked. Risks which May Impede the Achievement of the Barclays Research Price Target: Our BG Group share price target and rating depends upon our estimates of profitability and cash flow and the rate at which we discount the cash flows. These estimates in turn are based on assumptions for oil prices and downstream margins. These assumptions depend on the Barclays Capital European Oil and Gas equity research teams estimates for future energy supply-demand patterns, exchange rates, commodity prices. All of our estimates are subject to revision and may be materially different from eventual outcomes. In addition the company operates on a global basis in many regions with sometimes unstable political regimes and changing fiscal terms. The actions of OPEC can also have a significant influence on the oil market. All estimates assume no marked changes in the current political landscape. Both upstream and LNG operations are subject to planned and unplanned downtime. BG has significant exposure to LNG, which is still an evolving industry. Other Material Conflicts: The Corporate and Investment Banking division of Barclays is providing investment banking services to BG Group PLC in connection with the sale of certain interests in Queensland Curtis LNG to China National Offshore Oil Corporation (CNOOC). The effects of this transaction has not been incorporated into the analysts views due to Barclays role in this potential transaction.

10 September 2013

14

DISCLAIMER: This publication has been prepared by the Corporate and Investment Banking division of Barclays Bank PLC and/or one or more of its affiliates (collectively and each individually, "Barclays"). It has been issued by one or more Barclays legal entities within its Corporate and Investment Banking division as provided below. It is provided to our clients for information purposes only, and Barclays makes no express or implied warranties, and expressly disclaims all warranties of merchantability or fitness for a particular purpose or use with respect to any data included in this publication. Barclays will not treat unauthorized recipients of this report as its clients. Prices shown are indicative and Barclays is not offering to buy or sell or soliciting offers to buy or sell any financial instrument. Without limiting any of the foregoing and to the extent permitted by law, in no event shall Barclays, nor any affiliate, nor any of their respective officers, directors, partners, or employees have any liability for (a) any special, punitive, indirect, or consequential damages; or (b) any lost profits, lost revenue, loss of anticipated savings or loss of opportunity or other financial loss, even if notified of the possibility of such damages, arising from any use of this publication or its contents. Other than disclosures relating to Barclays, the information contained in this publication has been obtained from sources that Barclays Research believes to be reliable, but Barclays does not represent or warrant that it is accurate or complete. Barclays is not responsible for, and makes no warranties whatsoever as to, the content of any third-party web site accessed via a hyperlink in this publication and such information is not incorporated by reference. The views in this publication are those of the author(s) and are subject to change, and Barclays has no obligation to update its opinions or the information in this publication. The analyst recommendations in this publication reflect solely and exclusively those of the author(s), and such opinions were prepared independently of any other interests, including those of Barclays and/or its affiliates. This publication does not constitute personal investment advice or take into account the individual financial circumstances or objectives of the clients who receive it. The securities discussed herein may not be suitable for all investors. Barclays recommends that investors independently evaluate each issuer, security or instrument discussed herein and consult any independent advisors they believe necessary. The value of and income from any investment may fluctuate from day to day as a result of changes in relevant economic markets (including changes in market liquidity). The information herein is not intended to predict actual results, which may differ substantially from those reflected. Past performance is not necessarily indicative of future results. This communication is being made available in the UK and Europe primarily to persons who are investment professionals as that term is defined in Article 19 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005. It is directed at, and therefore should only be relied upon by, persons who have professional experience in matters relating to investments. The investments to which it relates are available only to such persons and will be entered into only with such persons. Barclays Bank PLC is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority and is a member of the London Stock Exchange. The Corporate and Investment Banking division of Barclays undertakes U.S. securities business in the name of its wholly owned subsidiary Barclays Capital Inc., a FINRA and SIPC member. Barclays Capital Inc., a U.S. registered broker/dealer, is distributing this material in the United States and, in connection therewith accepts responsibility for its contents. Any U.S. person wishing to effect a transaction in any security discussed herein should do so only by contacting a representative of Barclays Capital Inc. in the U.S. at 745 Seventh Avenue, New York, New York 10019. Non-U.S. persons should contact and execute transactions through a Barclays Bank PLC branch or affiliate in their home jurisdiction unless local regulations permit otherwise. Barclays Bank PLC, Paris Branch (registered in France under Paris RCS number 381 066 281) is regulated by the Autorit des marchs financiers and the Autorit de contrle prudentiel. Registered office 34/36 Avenue de Friedland 75008 Paris. This material is distributed in Canada by Barclays Capital Canada Inc., a registered investment dealer and member of IIROC (www.iiroc.ca). Subject to the conditions of this publication as set out above, Absa Capital, the Investment Banking Division of Absa Bank Limited, an authorised financial services provider (Registration No.: 1986/004794/06. Registered Credit Provider Reg No NCRCP7), is distributing this material in South Africa. Absa Bank Limited is regulated by the South African Reserve Bank. This publication is not, nor is it intended to be, advice as defined and/or contemplated in the (South African) Financial Advisory and Intermediary Services Act, 37 of 2002, or any other financial, investment, trading, tax, legal, accounting, retirement, actuarial or other professional advice or service whatsoever. Any South African person or entity wishing to effect a transaction in any security discussed herein should do so only by contacting a representative of Absa Capital in South Africa, 15 Alice Lane, Sandton, Johannesburg, Gauteng 2196. Absa Capital is an affiliate of Barclays. In Japan, foreign exchange research reports are prepared and distributed by Barclays Bank PLC Tokyo Branch. Other research reports are distributed to institutional investors in Japan by Barclays Securities Japan Limited. Barclays Securities Japan Limited is a joint-stock company incorporated in Japan with registered office of 6-10-1 Roppongi, Minato-ku, Tokyo 106-6131, Japan. It is a subsidiary of Barclays Bank PLC and a registered financial instruments firm regulated by the Financial Services Agency of Japan. Registered Number: Kanto Zaimukyokucho (kinsho) No. 143. Barclays Bank PLC, Hong Kong Branch is distributing this material in Hong Kong as an authorised institution regulated by the Hong Kong Monetary Authority. Registered Office: 41/F, Cheung Kong Center, 2 Queen's Road Central, Hong Kong. This material is issued in Taiwan by Barclays Capital Securities Taiwan Limited. This material on securities not traded in Taiwan is not to be construed as 'recommendation' in Taiwan. Barclays Capital Securities Taiwan Limited does not accept orders from clients to trade in such securities. This material may not be distributed to the public media or used by the public media without prior written consent of Barclays. This material is distributed in South Korea by Barclays Capital Securities Limited, Seoul Branch. All equity research material is distributed in India by Barclays Securities (India) Private Limited (SEBI Registration No: INB/INF 231292732 (NSE), INB/INF 011292738 (BSE), Registered Office: 208 | Ceejay House | Dr. Annie Besant Road | Shivsagar Estate | Worli | Mumbai - 400 018 | India, Phone: + 91 22 67196363). Other research reports are distributed in India by Barclays Bank PLC, India Branch. Barclays Bank PLC Frankfurt Branch distributes this material in Germany under the supervision of Bundesanstalt fr Finanzdienstleistungsaufsicht (BaFin). This material is distributed in Malaysia by Barclays Capital Markets Malaysia Sdn Bhd. This material is distributed in Brazil by Banco Barclays S.A. This material is distributed in Mexico by Barclays Bank Mexico, S.A. Barclays Bank PLC in the Dubai International Financial Centre (Registered No. 0060) is regulated by the Dubai Financial Services Authority (DFSA). Principal place of business in the Dubai International Financial Centre: The Gate Village, Building 4, Level 4, PO Box 506504, Dubai, United Arab Emirates. Barclays Bank PLC-DIFC Branch, may only undertake the financial services activities that fall within the scope of its existing DFSA licence. Related financial products or services are only available to Professional Clients, as defined by the Dubai Financial Services Authority.

Barclays Bank PLC in the UAE is regulated by the Central Bank of the UAE and is licensed to conduct business activities as a branch of a commercial bank incorporated outside the UAE in Dubai (Licence No.: 13/1844/2008, Registered Office: Building No. 6, Burj Dubai Business Hub, Sheikh Zayed Road, Dubai City) and Abu Dhabi (Licence No.: 13/952/2008, Registered Office: Al Jazira Towers, Hamdan Street, PO Box 2734, Abu Dhabi). Barclays Bank PLC in the Qatar Financial Centre (Registered No. 00018) is authorised by the Qatar Financial Centre Regulatory Authority (QFCRA). Barclays Bank PLC-QFC Branch may only undertake the regulated activities that fall within the scope of its existing QFCRA licence. Principal place of business in Qatar: Qatar Financial Centre, Office 1002, 10th Floor, QFC Tower, Diplomatic Area, West Bay, PO Box 15891, Doha, Qatar. Related financial products or services are only available to Business Customers as defined by the Qatar Financial Centre Regulatory Authority. This material is distributed in the UAE (including the Dubai International Financial Centre) and Qatar by Barclays Bank PLC. This material is distributed in Saudi Arabia by Barclays Saudi Arabia ('BSA'). It is not the intention of the publication to be used or deemed as recommendation, option or advice for any action (s) that may take place in future. Barclays Saudi Arabia is a Closed Joint Stock Company, (CMA License No. 09141-37). Registered office Al Faisaliah Tower, Level 18, Riyadh 11311, Kingdom of Saudi Arabia. Authorised and regulated by the Capital Market Authority, Commercial Registration Number: 1010283024. This material is distributed in Russia by OOO Barclays Capital, affiliated company of Barclays Bank PLC, registered and regulated in Russia by the FSFM. Broker License #177-11850-100000; Dealer License #177-11855-010000. Registered address in Russia: 125047 Moscow, 1st Tverskaya-Yamskaya str. 21. This material is distributed in Singapore by the Singapore branch of Barclays Bank PLC, a bank licensed in Singapore by the Monetary Authority of Singapore. For matters in connection with this report, recipients in Singapore may contact the Singapore branch of Barclays Bank PLC, whose registered address is One Raffles Quay Level 28, South Tower, Singapore 048583. Barclays Bank PLC, Australia Branch (ARBN 062 449 585, AFSL 246617) is distributing this material in Australia. It is directed at 'wholesale clients' as defined by Australian Corporations Act 2001. IRS Circular 230 Prepared Materials Disclaimer: Barclays does not provide tax advice and nothing contained herein should be construed to be tax advice. Please be advised that any discussion of U.S. tax matters contained herein (including any attachments) (i) is not intended or written to be used, and cannot be used, by you for the purpose of avoiding U.S. tax-related penalties; and (ii) was written to support the promotion or marketing of the transactions or other matters addressed herein. Accordingly, you should seek advice based on your particular circumstances from an independent tax advisor. Copyright Barclays Bank PLC (2013). All rights reserved. No part of this publication may be reproduced in any manner without the prior written permission of Barclays. Barclays Bank PLC is registered in England No. 1026167. Registered office 1 Churchill Place, London, E14 5HP. Additional information regarding this publication will be furnished upon request.

US08-000001