Press Releases and Events
NOVATEK announces year-end 2008 reserves
Moscow, 9 February 2009. OAO NOVATEK 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 2008. The Company added approximately 504 million barrels of oil equivalent (boe) of proved reserves under SEC1 standards, inclusive of 2008 production, and produced approximately 219 million boe2 during the year.
Estimated total proved reserves (according to SEC standards) as of 31 December 2008 increased to 4,963 million boe from 4,678 million boe as of year-end 2007. Total proved reserves of natural gas increased from 653 billion cubic meters (bcm) in 2007 to 690 bcm in 2008, an increase of 67 bcm, inclusive of 2008 production. The growth in proved reserves was mainly attributable to the drilling of new horizontal wells at the Yurkharovskoye and Sterkhovoye fields combined with discoveries of the new deposits at the Yurkharovskoye and Khancheyskoye fields.
In 2008, on a barrel of oil equivalent basis, NOVATEK replaced 230 percent of its production volumes from the appraised fields under the SEC standards, and at year-end 2008, the Company’s reserve to production ratio (or R/P ratio) remained at 23 years. The Company’s reserve replacement rate for natural gas was 220 percent while maintaining an R/P ratio of approximately 23 years.
Under the Petroleum Resources Management System (PRMS3) reserve reporting methodology, the Company’s proved reserves increased by 474 million boe, inclusive of 2008 production, and totaled 5,354 million boe while proved plus probable reserves totaled 7,498 million boe as of 31 December 2008. The Company’s 2008 total net proved plus probable reserves declined slightly, as compared to 2007, due to a decrease in probable natural gas reserves.
Natural gas reserves, bcm
|Proved plus Probable||1,017||1,029||-||-||-|
Liquids reserves, mmt
|Proved plus Probable||104||102||-||-||-|
Total reserves, mm boe
|Proved plus Probable||7,498||7,562||-||-||-|
1 The Company’s 2008 proved reserves are based on reserve appraisal reports for the East- Tarkosalinskoye, Khancheyskoye, North Khancheyskoye, Yurkharovskoye, and Termokarstovoye fields and the Olimpiysky license area. The reserve appraisals were conducted on a U.S. Securities and Exchange (“SEC”) basis provided that due to a lack of clear SEC guidance, D&M has relied on our representations that we intend to (i) extend the term of our licenses to the end of the economic lives of the fields and (ii) proceed accordingly with the development and operation of the fields, in order to include certain volumes of reserves estimated to be producible beyond the primary terms of the licenses. Reserve information in this press release includes reserves recoverable up to as well as beyond the current license expiration date for the Khancheyskoye field. The reserve appraisals under the SEC reserve standards do not include estimates for probable and possible reserves.
The SEC issued Release No. 33-8995 on the 31 December 2008 detailing sweeping changes to the disclosure requirements for company and reserve information. The new rules represent the first significant revisions in oil and gas disclosures requirements in more than 25 years, and are scheduled to be applied for fiscal years ended 31 December 2009. The new oil and gas reserve disclosure rules are not permitted for early adoption.
2 Marketableproduction only for appraised fields, total marketable production including fields not appraised by D&M totaled approximately 220 million boe.
3 The reserve appraisals were conducted under the PRMS reserve reporting standard 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. The Company’s 2008 proved reserves are based on reserve appraisal reports for the East Tarkosalinskoye, Khancheyskoye, North Khancheyskoye, Yurkharovskoye, West Yurkharovskoye , Termokarstovoye fields and the Olimpiysky and West Urengoisky license areas.
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 for the years ended 31 December 2004 through 2008.
Information provided in this press release presents expected results of OAO NOVATEK operations in 2008. The information represents preliminary assessment only, which can be adjusted after statistical, financial, fiscal and business reporting becomes available. The information on 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 2008. ОАО 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 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.