NOVATEK announces IFRS results for the third quarter and nine months ended 30 September 2007

21 November 2007

Moscow, 21 November 2007. OAO NOVATEK today released its consolidated interim condensed financial information for the three and nine months ending 30 September 2007 prepared in accordance with International Financial Reporting Standards («IFRS»).

The Third Quarter and Nine Months 2007 IFRS Financial Highlights

3Q 2007
3Q 2006
 
9M 2007
9M 2006
RR, mln
RR, mln
Revenues
RR, mln
RR, mln
14,680
12,749
Oil and gas sales
44,093
36,503
413
276
Sales of polymer and insulation tape
1,133
824
103
73
Other
259
170
15,196
13,098
Total revenues
45,485
37,497
(1)
42
Other income (loss)
24
(243)
15,195
13,140
Total revenues and other income
45,509
37,254
(8,524)
(7,712)
Total operating expenses
(27,091)
(22,336)
6,670
5,415
Profit before income tax
18,482
14,920
5,118
4,085
Profit for period
13,670
11,230
5,119
4,086
Profit attributable to shareholders
13,682
11,302
1.69
1.35
Basic and diluted earnings per share(1)
4.51
3.72

In the three and nine months ended 30 September 2007, profit attributable to shareholders of OAO NOVATEK increased by RR 1,033 million and RR 2,380 million, respectively, compared to the corresponding periods in 2006 due to a combination of increased prices for natural gas and liquids and an increase in liquids sales volumes.

Selected Operating Highlights

3Q 2007
3Q 2006
 
9M 2007
9M 2006
   
Sales Volumes
   
6,639
7,097
Natural gas (millions cubic meters)
23,480
22,614
436
438
Stable gas condensate
(thousand tons)
1,210
1,026
150
134
Liquefied petroleum gas
(thousand tons)
398
387
73
68
Crude oil (thousand tons)
198
208
6
8
Oil products (thousand tons)
37
66

In the third quarter of 2007, natural gas sales volumes decreased, compared to the corresponding period in 2006, primarily due to a decrease in volumes sold to wholesale traders. In the 2007 period, liquids (stable gas condensate, liquefied petroleum gas, crude oil and oil products) sales volumes increased compared to the 2006 period, primarily due to increased gas condensate and crude oil production.

In the nine month period of 2007, natural gas sales volumes increased, compared to the corresponding period in 2006, due to an increase in purchases and a decrease in natural gas inventory volumes. In the 2007 period, liquids sales volumes increased compared to the 2006 period, due to a combination of increased production and a decrease in net volumes of stable gas condensate recorded as goods in transit.

Selected Balance Sheet Items
(in millions of Russian roubles)

 
30 September 2007
31 December 2006
ASSETS
   
Non-current assets
   
Property, plant and equipment, net
76,522
66,734
Total non-current assets
79,270
68,508
Total current assets
17,307
15,818
Total assets
96,577
84,326
LIABILITIES AND EQUITY
   
Non-current liabilities
   
Long-term debt
105
543
Total non-current liabilities
9,986
10,552
Total current liabilities
7,613
5,098
Total liabilities
17,599
15,650
Equity attributable to Group Shareholders
   
Total equity attributable to Group shareholders
78,745
68,320
Minority interest
233
356
Total equity
78,978
68,676
Total liabilities and equity
96,577
84,326

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 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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