Press Releases and Events
NOVATEK announces year-end 2011 reserves
Moscow, 02 February 2012. OAO NOVATEK (“NOVATEK” and/or the “Company”) today announced that independent petroleum engineers, DeGolyer and MacNaughton (D&M), have completed their comprehensive reserve appraisals of the Company’s oil and gas reserves as of 31 December 2011. The Company added approximately 1,685 million barrels of oil equivalent (boe) of proved reserves under SEC1 reserves reporting methodology (SEC standards), inclusive of 2011 production, and produced approximately 380 million boe2 during the year.
Estimated total SEC proved reserves as of 31 December 2011 increased to 9,393 million boe from 8,088 million boe as of year-end 2010. Total proved reserves of natural gas increased from 1,144 billion cubic meters (bcm) in 2010 to 1,321 bcm in 2011, or by 230 bcm, inclusive of the Company’s 2011 production. The increase in proved reserves was mainly attributable to organic reserve growth, including development and exploration drilling at the Company’s fields as well as a 29% increase in our stake in the South-Tambeyskoye field.
In 2011, on a barrel of oil equivalent basis, NOVATEK recorded a more than four-fold (444%) reserve replacement rate3 for its appraised fields under the SEC standards, and at year-end 2011, the Company’s reserve to production ratio (or R/P ratio) was 25 years. The Company also recorded a more than four-fold (435%) reserve replacement rate for natural gas while the R/P ratio amounted to approximately 25 years.
Under the Petroleum Resources Management System (PRMS4) reserves reporting methodology, the Company’s total proved reserves increased by 2,391 million boe, inclusive of 2011 production, and totaled 11,337 million boe, while proved plus probable reserves totaled 15,409 million boe as of 31 December 2011.
Natural gas reserves, bcm
Proved plus Probable
Liquids reserves, mmt
Proved plus Probable
Total reserves, mm boe
Proved plus Probable
1 The Company’s 2011 net proved reserves are based on appraisal reports for the East-Tarkosalinskoye, Khancheyskoye, North Khancheyskoye, Severo-Russkoye, Yurkharovskoye, West Yurkharovskoye and Olimpiyskiy fields and license areas based on NOVATEK’s 100% ownership interest, as well as the South-Tambeyskoye, Termokarstovoye, Yarudeyskoye, Khadyryakhinskiy, Pyreinoye, Severo-Chaselskoye, Yaro-Yakhinskiy, Beregovoy, Yevo-Yakhinskiy, and Samburgskiy fields and license areas, according to NOVATEK’s shareholding in the respective fields and license areas. The 2011 reserve appraisal does not include Salmanovskoye and Geofizicheskoye fields which are located in the Gydan peninsula and were acquired in 2011. The appraisal reports were conducted under the reserves estimation, reporting and disclosures rules promulgated by the U.S. Securities and Exchange Commission (“SEC”) reserves reporting methodology and do not include estimates for probable and possible reserves.
2 Marketable (or sales) production for appraised fields; total gross production, including fields not appraised by D&M, totaled approximately 385 million boe.
3 The reserves 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.
4 The appraisal reports were conducted under the PRMS reserves reporting methodology which was approved in March 2007 by the Society of Petroleum Engineers, the World Petroleum Council, the American Association of Petroleum Geologist, and the Society of Petroleum Evaluation Engineers and differs in certain material respects from SEC standards. The Company’s 2011 PRMS reserves are based on appraisal reports for the East-Tarkosalinskoye, Khancheyskoye, North Khancheyskoye, Severo-Russkoye, Yurkharovskoye, West Yurkharovskoye, Olimpiyskiy and Zapadno-Urengoiskiy fields and license areas based on NOVATEK’s 100% ownership interest, as well as the South-Tambeyskoye, Termokarstovoye, Yarudeyskoye, Khadyryakhinskiy, Pyreinoye, Zapadno-Zapolyarnoye, Severo-Chaselskoye, Yaro-Yakhinskiy, Beregovoy, Samburgskiy, and Yevo-Yakhinskiy fields and license areas, according to NOVATEK’s shareholding in the respective fields and license areas. The 2011 PRMS reserve appraisal does not include the Salmanovskoye and Geofizicheskoye fields which are located in the Gydan peninsula and were acquired in 2011.
1,000 cubic meters equals 6.54 barrels of oil equivalent. Liquids have been converted from tons to barrels using D&M’s estimates from the reserve appraisal reports of the respective fields for the years ended 31 December 2007 through 2011.
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. Upstream activities of the Company’s subsidiaries and joint ventures 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.