NOVATEK announces second quarter and first half 2011 IFRS results

12 August 2011

Moscow, 12 August 2011. OAO NOVATEK today released its consolidated interim condensed financial information for the three and six months ended 30 June 2011 prepared in accordance with International Financial Reporting Standards (“IFRS”). 
 
 
IFRS Financial and Operational Highlights
(in millions of Russian roubles)
 
2Q 2011
2Q 2010
 
1H 2011
1H 2010
 
 
Revenues
 
 
40,501
25,051
Oil and gas sales
85,294
52,288
-
611
Sales of polymer and insulation tape
-
1,080
75
44
Other revenues
143
80
40,576
25,706
Total revenues
85,437
53,448
(22,439)
(15,717)
Total operating expenses
(45,860)
(31,664)
-
-
Net gain on disposal of interest
in subsidiaries
 -
 1,583
(65)
29
Other operating income (loss)
(1)
24
18,072
10,018
Profit from operations
39,576
23,391
1,073
(1,078)
Total finance income (expense)
3,811
(466)
18,154
8,931
Profit before income tax
41,870
22,915
14,300
7,066
Profit (loss)
33,100
18,142
14,421
7,139
Profit (loss) attributable to shareholders of OAO NOVATEK
33,274
18,321
4.75
2.35
Basic and diluted earnings per share
(in Russian roubles)
10.97
6.04
 
Total revenues in the second quarter and first half 2011, increased by 57.8% and 59.9%, respectively, as compared to the corresponding periods in 2010, primarily due to higher natural gas and liquid hydrocarbons’ sales volumes and prices.
 
Profit from operations increased by 80.4% and 69.2% in the second quarter and first half 2011, respectively, compared to the corresponding reporting period in 2010 due to the growth in revenues and our ability to control operating expenses. Profit attributable to shareholders of OAO NOVATEK more than doubled (102.0%) in the second quarter 2011 and increased by 81.6% in the first half of 2011, resulting in earnings per share of RR 4.75 and RR 10.97, respectively, due primarily to higher oil and gas sales and cost optimization.
   
Selected Operating Highlights
 
 
2Q 2011
2Q 2010
Production and Purchase Volumes
1H 2011
1H 2010
10,696
8,290
Natural gas production
(million cubic meters)
22,635
18,145
1,313
-
Net share in equity production of natural gas
(million cubic meters)
2,684
-
12,009
8,290
Total natural gas production
25,319
18,145
1,036
879
Liquids production (thousand tons)
2,060
1,741
2
1
Liquids purchases (thousand tons)
3
6
1,038
880
Total liquids production and purchases
2,063
1,747
  
  
  
  
  
2Q 2011
2Q 2010
Sales Volumes
1H 2011
1H 2010
11,830
7,909
Natural gas (millions cubic meters)
25,822
18,015
755
539
Stable gas condensate (thousand tons)
1,479
951
217
231
Liquefied petroleum gas (thousand tons)
446
456
53
48
Crude oil (thousand tons)
102
92
2
3
Oil products (thousand tons)
3
6
 
In the second quarter and first half 2011, our natural gas sales volumes increased by 49.6% and 43.3%, respectively, compared to the corresponding periods in 2010. The increases were primarily due to the growth in NOVATEK’s production capacity combined with the expansion of our customer portfolio and higher natural gas demand in the domestic market.
 
During the second quarter 2011, our total liquids’ sales volumes increased by 25.1% and our total liquids’ sales volumes in the first half of 2011 increased by 34.9% compared to the corresponding periods in 2010 primarily due to organic growth in production capacity. At 30 June 2011, we recorded 274 thousand tons of stable gas condensate in transit or storage and recognized as inventory as compared to 332 thousand tons as of 30 June 2010.
  
 Selected Balance Sheet Items
(in millions of Russian roubles)
 

    
 
30 June 2011
31 December 2010
ASSETS
  
  
Non-current assets
260,257
255,608
Property, plant and equipment, net
194,189
185,573
Current assets
47,289
29,565
Total assets
307,546
285,173
LIABILITIES AND EQUITY
 
 
Non-current liabilities
91,980
59,946
Long-term debt
77,601
47,074
Current liabilities
21,879
57,441
Total liabilities
113,859
117,387
Equity attributable to
OAO NOVATEK shareholders
 
172,908
147,119
Non-controlling interest
20,779
20,667
Total equity
193,687
167,786
Total liabilities and equity
307,546
285,173

 
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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