NOVATEK announces IFRS results for the second quarter and six months ended 30 June 2006

25 August 2006

Moscow, 25 August 2006. OAO NOVATEK today released its consolidated interim condensed financial information for the three and six months ending 30 June 2006 prepared in accordance with International Financial Reporting Standards («IFRS»).

The Second Quarter and Six Months 2006 IFRS Financial Highlights

2Q 2006
2Q 2005
 
1H 2006
1H 2005
RR, mln
RR, mln
Revenues
RR, mln
RR, mln
12,206
8,875
Oil and gas sales
23,525
17,357
291
225
Sales of polymer and insulation tape
548
437
56
54
Other
97
153
12,553
9,154
 Total revenues
24,170
17,947
(172)
3,628
Other income (loss)
(285)
3,624
12,381
12,782
Total revenues and other income
23,885
21,571
(7,672)
(5,242)
Total operating expenses
(14,395)
(10,783)
4,631
7,417
Profit before income tax and minority interests
9,505
10,501
3,443
5,600
Profit for period
7,145
7,908
3,499
5,608
Profit attributable to shareholders
7,216
7,923
1.15
1.85
Basic and diluted earnings per share(1)
2.38
2.61

(1) In July 2006, NOVATEK registered a 1000:1 share split which has been given retroactive effect in the consolidated interim condensed financial information. The average weighted average number of shares outstanding in both periods is 3,036,306,000. Earnings per share amounts in Russian roubles.

In the three and six months ended 30 June 2006, profit attributable to shareholders of OAO Novatek decreased compared to the corresponding period in 2005 due to the realization of gains on disposals of investments in oil and gas producing associates and other non-core subsidiaries of RR 3,631 million in the three months ended 30 June 2005.

Excluding the impact of disposals, net of associated income taxes, on the 2005 periods profit attributable to shareholders of Novatek in the three and six months ended 30 June 2006 increased by RR 577 million and RR 1,979 million, respectively, compared to the corresponding periods in 2005.

Selected Operating Highlights

2Q 2006
2Q 2005
 
1H 2006
1H 2005
 
 
Sales Volumes
 
 
7,683
6,764
Natural gas (millions cubic meters)
15,517
13,771
331
88
Stable gas condensate
(thousand tons)
588
88
124
27
Liquefied petroleum gas
(thousand tons)
253
27
74
341
Crude oil (thousand tons)
139
705
35
215
Oil products (thousand tons)
58
463

In the three and six month periods ended 30 June 2006, natural gas sales volumes increased primarily due to increased production at our core fields.

In the three and six month periods ended 30 June 2006, we recorded 187 thousand tons of stable gas condensate as «goods in transit» due to the change in our export terms. These volumes were recognized as inventory until such time as they are delivered to the port of destination.

Selected Balance Sheet Items
(in millions of Russian roubles)

 
30 June 2006
31 December 2004
ASSETS
 
 
Non-current assets
 
 
Property, plant and equipment, net
66,259
65,675
Total non-current assets
67,654
66,840
Total current assets
12,871
11,922
Total assets
 
80,525
 
78,762
 
LIABILITIES AND EQUITY
 
 
Non-current liabilities
 
 
Long-term debt
1,144
892
Total non-current liabilities
10,848
10,781
Total current liabilities
6,357
10,432
Total liabilities
17,205
21,213
Equity attributable to Group Shareholders
 
 
Total equity attributable to Group shareholders
63,039
57,268
Minority interest
281
281
Total equity
63,320
57,549
Total liabilities and equity
80,525
78,762

The full set of consolidated interim condensed IFRS financial information, the notes thereto and Management’s Discussion and Analysis of Financial Condition and Results of Operations are available on the Company’s web site (www.novatek.ru).


PAO NOVATEK is the largest independent natural gas producer in Russia, and in 2017, entered the global LNG market by successfully launching the Yamal LNG project. Founded in 1994, the Company is engaged in the exploration, production, processing and marketing of natural gas and liquid hydrocarbons. The Company’s upstream activities are concentrated mainly in the prolific Yamal-Nenets Autonomous Region, which is the world’s largest natural gas producing area and accounts for approximately 80% of Russia’s natural gas production and approximately 15% of the world’s gas production. NOVATEK is a public joint stock company established under the laws of the Russian Federation. The Company’s shares are listed in Russia on Moscow Exchange (MOEX) and the London Stock Exchange (LSE) under the ticker symbol “NVTK”.