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NOVATEK announces second quarter and first half 2008 IFRS results

Moscow, 13 August 2008. OAO NOVATEK today released its consolidated interim condensed financial information for the three and six months ending 30 June 2008 prepared in accordance with International Financial Reporting Standards («IFRS»).

IFRS Financial and Operational Highlights (in millions of Russian roubles)

2Q 2008
2Q 2007
1H 2008
1H 2007
Revenues
20,411
14,550
Oil and gas sales
40,578
29,435
580
411
Sales of polymer and insulation tape
1,131
720
361
91
Other
519
156
21,352
15,052
Total revenues
42,228
30,311
(195)
9
Other income (loss)
(179)
25
21,157
15,061
Total revenues and other income
42,049
30,336
(11,822)
(9,010)
Total operating expenses
(22,845)
(18,589)
9,335
6,051
Profit from operations
19,204
11,747
22
42
Finance income (expense)
161
65
9,312
6,093
Profit before income tax
19,298
11,812
7,056
4,210
Profit for period
14,555
8,552
7,053
4,216
Profit (loss) attributable to OAO NOVATEK shareholders
14,556
8,563
2.32
1.39
Basic and diluted earnings per share
(in Russian roubles)
4.79
2.82

In the second quarter and first half 2008, total revenues grew by 41.9% to RR 21,352 million and by 39.3% to RR 42,228 million respectively, as compared to the corresponding periods of 2007, reflecting the general strength and stability of our core business operations.

Profit attributable to NOVATEK shareholders in the second quarter and first half 2008 increased by 67.3% to RR 7,053 million, or RR 2.32 per share, and by 70.0% to RR 14,556 million, or RR 4.79 per share, respectively, as compared to the corresponding periods of 2007.

Selected Operating Highlights

2Q 2008
2Q 2007
Production and Purchase Volumes
1H 2008
1H 2007
7,378
7,226
Natural gas production
(million cubic meters)
14,956
14,774
801
585
Natural gas purchases
(million cubic meters)
1,348
1,301
8,179
7,811
Total natural gas production and purchases
16,304
16,075
597
575
Liquids production (thousand tons)
1,228
1,161
38
-
Liquids purchases (thousand tons)
70
16
635
575
Total liquids production and purchases
1,298
1,177

In the second quarter 2008 our natural gas sales volumes increased primarily due to an increase in purchases from the third parties. We purchased the volumes of natural gas in order to meet the additional demand of the customers.

At 30 June 2008, we had 149 thousand tons of stable gas condensate in transit or storage and recognized as inventory until such time as it is delivered to the port of destination as compared to 176 thousand tons as of 30 June 2007.

Selected Balance Sheet Items
(in millions of Russian roubles)

30June2008
31 December 2007
ASSETS
Non-current assets
100,490
86,937
Property, plant and equipment, net
96,563
82,669
Total current assets
18,511
17,038
Total assets
119,001
103,975
LIABILITIES AND EQUITY
Non-current liabilities
14,761
10,088
Long-term debt
4,424
42
Current liabilities
12,400
12,075
Total liabilities
27,161
22,163
Equity attributable to
OAO NOVATEK shareholders
91,364
81,335
Minority interest
476
477
Total equity
91,840
81,812
Total liabilities and equity
119,001
103,975

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”.