(Adds LNG business details, analyst comment, updates shares)
By Karolin Schaps
LONDON, May 8 (Reuters) - BG Group said on Friday itwas still happy with Shell's $70 billion takeover biddespite a recent upturn in oil prices that led the company toincrease the profit outlook for its liquefied natural gas (LNG)business.
A near 20 percent rise in oil prices since Shell made itsagreed bid for BG on April 8, when the cash and shares pricevalued BG at 47 billion pounds ($72.6 billion), has raisedconcerns that investors might question that valuation and putpressure on Shell to conclude the deal as quickly as possible.
"There is no change to our view on the offer," BG's new chief executive, Helge Lund, said on his first resultsconference call since taking the reins in early February.
The recent oil price rise has improved BG's outlook for LNGprices and led the company to raise its LNG earnings forecastfor 2015 to $1.3-1.5 billion from a previous guidance of $0.7-1billion.
BG's LNG unit, one of the main pillars of the business whichShell said justified its takeover offer, significantly ramped upvolumes in the first quarter, selling 21 more cargoes than thesame time last year thanks to the newly opened QCLNG facility inAustralia.
Analysts at Jefferies, who recommend buying the stock,estimated that BG's first-quarter average LNG price was $11.15per mmbtu (million British thermal units), compared with averageAsian spot cargo prices of $7.40 per mmBtu last week.
BG last year agreed the sale of the QCLNG pipeline to APAGroup for $5 billion, but a reduction in the pipeline tariffmeant the sale would now conclude at $4.5-5 billion instead, BGsaid on Friday.
BG's first-quarter results, however, also showed how deeplythe drop in oil prices early this year had hit its business asit reported a 41 percent drop in core earnings to $1.6 billionfrom $2.7 billion at the same time last year.
The company's revenue and other income fell 21 percent yearon year to $4 billion, despite a doubling in output from itsAustralian and Brazilian operations.
Shell and BG are expected to conclude their takeover deal,which is subject to a range of regulatory approvals, in early2016.
Lund, who joined BG after a stellar 10-year career at thetop of Norway's Statoil, said he welcomed the Shelldeal with "mixed emotions" as a takeover had not been envisagedwhen he took the job at BG.
He is expected to leave the company once the takeovercompletes but said on Friday he had not yet spent any timethinking about what he might do next.
BG's shares were up 0.9 percent at 1185 pence by 0904 GMT,valuing the company at 40.5 billion pounds ($62.6 billion). ($1 = 0.6474 pounds) (Editing by Jane Merriman and Greg Mahlich)
