NOVATEK announces year-end 2014 reserves

29 January 2015

Moscow, 29 January 2015. OAO NOVATEK (“NOVATEK” and/or the “Company”) announced that independent petroleum engineers, DeGolyer & MacNaughton, have completed their comprehensive reserve appraisal of the Company’s hydrocarbon reserves as of 31 December 2014.

Total SEC proved reserves, including the Company’s proportionate share in joint ventures, aggregated 12,578 million barrels of oil equivalent (boe), including 1,747 billion cubic meters (bcm) of natural gas and 135 million metric tons (mmt) of liquid hydrocarbons. In 2014, NOVATEK increased the proved reserves by three-tenths of one percent (0.3%) and recorded a reserve replacement rate of 109%.

The reserves growth during the reporting period was affected by the disposal of the Company’s share of 4.9% in SeverEnergia. Excluding this effect, the proved reserves grew by 2%, with an organic reserve replacement of 152% due to successful exploration works and drilling, what is equal to reserves addition of 733 million boe, inclusive of 2014 production.

At year-end 2014, the Company’s reserve to production ratio (or R/P ratio) was 28 years.

Under the PRMS reserves reporting methodology, the Company’s total proved plus probable reserves, including the Company’s proportionate share in joint ventures, aggregated 22,886 million boe, including 3,122 bcm of natural gas and 293 mmt of liquid hydrocarbons.

Natural gas reserves, bcm
 
2014
2013
2012
2011
2010
Proved
SEC
 1,747
1,740
1,758
1,321
1,144
Proved plus Probable
PRMS
 3,122
3,125
3,106
2,108
1,840
Liquids reserves, mmt
 
2014
2013
2012
2011
2010
Proved
SEC
135
134
106
  91
 73
Proved plus Probable
PRMS
293
314
247
199
166
Total reserves, mm boe
 
2014
2013
2012
2011
2010
Proved
SEC
12,578
12,537
12,394
  9,393
 8,088
Proved plus Probable
PRMS
22,886
23,085
22,355
15,409
13,386

 

Notes:

The Company’s 2014 net proved reserves include the reserves of the East-Tarkosalinskoye, Khancheyskoye, North-Khancheyskoye+Khadyryakhinskoye, North-Russkoye, Yurkharovskoye, West-Yurkharovskoye, Utrennee, Geofizicheskoye and East-Tazovskoye fields, Olimpiyskiy and West-Urengoiskiy license areas, based on NOVATEK’s 100% ownership interest, as well as the reserves of the South-Tambeyskoye, Termokarstovoye, Yarudeyskoye, North-Chaselskoye and Yaro-Yakhinskoye fields, Yevo-Yakhinskiy, Samburgskiy and North-Urengoyskiy license areas according to NOVATEK’s shareholdings in the joint ventures.

In 2014, marketable production at the appraised fields amounted to approximately 457 million boe.

The reserve replacement rate is calculated by taking the difference between the opening balance of reserves and the ending balance of reserves plus production for the period and dividing the sum by production for the period.

 

Conversion factors:

1,000 cubic meters of gas equals 6.54 barrels of oil equivalent.

Liquids have been converted from tons to barrels using specific density factor for each field.

***

Information provided in this press release presents expected results of OAO NOVATEK operations in 2014. The information represents preliminary assessment only, which can be adjusted after statistical, financial, fiscal and business reporting becomes available. The information on OAO NOVATEK’s operational results in this press release depends on many external factors and therefore, provided all permanent obligations imposed by the London Stock Exchange listing rules are unconditionally observed, cannot qualify for accuracy and completeness and should not be regarded as an invitation for investment. Therefore, the results and indicators actually achieved may significantly differ from any declared or forecasted results in 2014. OAO NOVATEK assumes no obligation (and expressly declares that it has no such obligation) to update or change any declarations concerning any future results, both due to new information obtained, any future events or for any other reasons.


PAO NOVATEK is the largest independent natural gas producer in Russia, and in 2017, entered the global gas 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”.

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