Production
2006 operating profit was down 15% to £864 million (2005: £1,020 million) due to a 37% reduction in gas volumes partially offset by a 35% increase in selling price. The 51% reduction in Morecambe production volumes was due to management decisions to carry out remedial work on South Morecambe's cooler units during an extended summer maintenance period and our decision to switch off the field in response to low intraday gas prices especially in the fourth quarter of the year.
This was partially offset by a 16% increase in other production volumes mainly due to the full year effect of Centrica's 2005 acquisition of the Kerr McGee fields and the acquisition of an increased share in the Statfjord field. These fields contributed to the 47% increase in oil and condensates production which reached 5.6 million barrels of oil equivalent (MBOE) (2005: 3.8 MBOE) with average selling prices of £34/BOE (2005: £29/BOE). The 36% increase in variable production costs is due to the increased proportion of volumes from the newer fields where depreciation levels are higher.
Reserves
We have no reserve data for this company yet