BG Group, the third largest British oil and gas company, said Friday its earnings fell 65 percent, but still posted an increase in exploration and production.

The company said in its second quarter report that underlying earnings declined to $429 million, compared with $1.2 billion one year ago. Exploration and production increased 19 percent to 703,000 barrels of oil equivalent per day, though with most of that existing as oil, the weak price environment for crude oil took its toll.

Exploration and production was offset by declines in the Egyptian, British and U.S. markets, which alone dropped 17.5 percent to 33,000 boe per day. The company said, however, it expects 2015 exploration production to be near 690,000 boe per day, with Australian operations contributing to the growth expectations.

BG Group has focused on pushing production from its Queensland Curtis liquefied natural gas facility in Australia, which shipped new cargo this month.

Chief Executive Helge Lund, who took over early this year, said the LNG business for BG Group has been robust.

"This performance reflects our actions to stabilize and de-risk the business and our teams remain focused on delivering our 2015 commitments," he said in a statement.

BG Group is the target of a $70 billion takeover bid from Royal Dutch Shell, which Thursday cut capital spending by 20 percent in an effort to cut costs during what's expected to be a prolonged market downturn.

In its quarterly statement, Shell said both sides were planning for what it said was a "world class integration" of two industry leaders.

Investors reacted positively to BG Group's report. Shares in the company were up more than half a percent on the London exchange.