Kazmunaigaz Exploration Regulatory News (KMG)

29 Dec 2006 11:02

JSC KazMunaiGas Exploration Prod29 December 2006 KazMunaiGas EP announces its financial results for the first 9 months of 2006 Astana, 29 December, 2006 JSC KazMunaiGas Exploration Production ("KMG EP" or the "Company") has releasedtoday the Company's condensed consolidated interim financial information for thefirst nine months of 2006. The financial information has been prepared inaccordance with International Financial Reporting Standards ("IFRS"), has beenneither audited nor reviewed by an independent auditor and is provided inaccordance with the requirements of the Kazakhstan Stock Exchange. Profit for the period after tax (net income) from continuing operations for thefirst 9 months of 2006 was 67.8 bn Tenge, 60% higher than in the first ninemonths of 2005. The growth in net income was driven by favorable oil marketconditions, production growth, continued cost control and the release of certainaccruals made in earlier periods. Company revenues for the first nine months of 2006 increased by 21.4% year onyear to 310.7 bn Tenge. This growth was primarily due to a sales volume increaseof 0.7% to 6.98 mn tonnes ( 188.2 kbopd) and a 21% increase in the averagerealised price from 35,946 Tenge per tonne (37.05 USD per bbl) to 43,583 Tengeper tonne (47.50 USD per bbl). The average realised price went up primarilybecause of improved export prices. Exports accounted for 71% of sales in thefirst nine months of 2006 in volume terms (70% in the first nine months of2005). Operating expenses in the first nine months of 2006 were 131.7 bn Tenge which is3.1 bn Tenge (2.3%) less than in the same period in 2005. The reduction inoperating expenses was primarily due to a release of a provision for anenvironmental fine of 11.4 bn Tenge which was successfully challenged by theCompany in court in 2006. In addition, management fees was reduced by 3.3 bnTenge compared to the same period in 2005. This was partly offset by higherdepreciation, depletion and amortisation, increased taxes other than income tax,higher energy, employee benefits, materials, transportation and other costs. Operating cash flow was 65.2 bn Tenge in the first nine months of 2006,approximately 2% higher than in the same period of last year as thesignificantly improved pre-tax operating cash flow was largely offset by almosta two-fold increase in cash outflows related to income tax paid from 51.4 bnTenge in the first nine months of 2005 to 101.1 bn Tenge in the first ninemonths of 2006. Purchases of property, plant and equipment (capital expenditures, not includingpurchases of intangible assets, as per Cash Flow Statement) in the first ninemonths of 2006 were 36.3 bn Tenge or 10.5% less than in the same period of 2005.The reduction was due to the planned ongoing decrease in purchases of fixedassets. Cash, cash equivalents and financial assets at the end of September 2006amounted to 220 bn Tenge. The borrowings were 167.9 bn Tenge at the end of theperiod. The full set of condensed consolidated interim financial information and thenotes thereto are available at the Company's website (www.kmgep.kz) *** Appendix Key operating and financial indicators of JSC KazMunaiGas Exploration Production Summary operating data thousand tonnes 9 months 2006 9 months 2005 Crude oil production 7,123 6,969Crude oil exports 4,969 4,872Crude oil domestic 2,012 2,061 Summary Consolidated Balance Sheets Tenge Thousands 30 Sept 2006 31 Dec 2005 ASSETSNon-current assets 395,593,879 305,760,353 Current assets 185,777,096 130,623,355Total assets 581,370,975 436,383,708EQUITY Equity holders of the Company 224,861,573 173,653,027 Minority interest 5,884 79,536 Total equity 224,867,457 173,732,563LIABILITIESNon-current liabilities 207,949,763 117,928,068 Current liabilities 148,553,755 144,723,077Total liabilities 356,503,518 262,651,145TOTAL EQUITY AND LIABILITIES 581,370,975 436,383,708 Summary Consolidated Statements of Income For 9 months ended Sept 30,Tenge Thousands 2006 2005 CONTINUING OPERATIONS Revenue 310,673,567 255,806,754Operating expenses (131,662,898) (134,756,120)Profit from operations 179,010,669 121,050,634Finance income (expense) (4,612,914) 1,121,717Profit before tax and minority interest 174,397,755 122,172,351Income tax expense (106,574,485) (79,787,447)Profit for the period from continuing operations 67,823,270 42,384,904 DISCONTINUED OPERATIONSProfit for the year from discontinued operations - 900,688Profit for the period 67,823,270 43,285,592 Attributable to:Equity holders of the Company 67,823,173 43,143,676Minority interest 97 141,916 Summary Consolidated Statements of Cash Flows For 9 months ended Sept 30,Tenge Thousands 2006 2005 Net cash generated from operating activities 65,174,328 63,893,153Cash flows from investing activitiesPurchases of property, plant and equipment (PPE) (36,250,375) (40,481,958)Purchases of held-to-maturity financial assets (98,145,813) (5,569,708)Loans granted to related parties (24,371,325) (26,665,000)Other 9,252,578 2,648,046Net cash used in investing activities (149,514,935) (70,068,620)Cash flows from financing activitiesProceeds from borrowings 101,628,709 70,676,106Repayment of borrowings (1,627,679) (21,686,710)Dividends paid to Company's shareholders (38,610) (2,704,254)Other (2,015,442) (2,307,357)Net cash from (used in) financing activities 97,946,978 43,977,785 Netback analysis*, 9 m 2006 CPC UAS Domestic TotalSales volume, thousand tonnes 1,141 3,828 2,012 6,982Estimated market quote**, USD/bbl 66.96 62.55 n/a n/aAverage realized price, USD/bbl 59.83 58.20 19.51 47.50Adjusted realized price, net of 54.27 51.90 18.07 42.71transportation and selling expenses, USD/bbl Netback analysis*, 9 m 2005 CPC UAS Domestic TotalSales volume, thousand tonnes 1,223 3,650 2,061 6,933Estimated market quote**, USD/bbl 53.54 49.42 n/a n/aAverage realized price, USD/bbl 46.35 46.17 14.88 37.05Adjusted realized price, net of 42.61 40.27 10.74 32.07transportation and selling expenses, USD/bbl * excluding gas products, other sales and services ** CPC Blend for CPC shipments, Urals RCMB for shipments via Uzen-Atyrau-Samara (UAS) pipeline Reference information 9 months 2006 9 months 2005 Average exchange rate USD/KZT* 125.51 133.53Exchange rate USD/KZT as of 31 December 2005* 133.77Exchange rate USD/KZT as of 30 September 2006* 127.22Barrells to tones conversion ratio for crude oil 7.36 *Source: The National Bank of Kazakhstan Notes to Editors JSC KazMunaiGas Exploration Production, headquartered in Astana, is the thirdlargest crude oil producer in the Republic of Kazakhstan in terms of annualproduction volume based on 2005 data*. The Company had proved plus probable oil reserves of approximately 1,515 millionbarrels as at 31 December 2005** and average daily oil production in 2005 of 188thousand barrels per day. The Company extracts hydrocarbon resources from 44oil and gas fields located in the Atyrau and Mangistau regions in westernKazakhstan and is also engaged in onshore exploration activities, concentratedin the same areas. The Company is majority owned by JSC NC KazMunaiGas ("NCKMG"), the national oil and gas company which is controlled by Kazakh state viastate holding company JSC Samruk. * Source: Kazakhstan Ministry of Energy and Mineral Resources ** Source: Gaffney, Cline & Associates report, produced using SPE/WPC definitions For further details please contact us at: KMG EP, Public Relations (+7 317 2 977 908, +7 3172 977 924) Lyazzat Kokkozova E-mail: pr@kmgep.kz KMG EP, Investor Relations (+7 3172 975433) Alexander Gladyshev E-mail: ir@kmgep.kz Citigate Dewe Rogerson (+44 20 7638 9571) Martin Jackson David Westover George Cazenove Forward-looking statements This document includes statements that are, or may be deemed to be, ''forward-looking statements''. These forward-looking statements can be identifiedby the use of forward-looking terminology, including, but not limited to, theterms ''believes'', ''estimates'', ''anticipates'', ''expects'', ''intends'', ''may'', ''target'', ''will'', or ''should'' or, in each case, their negative orother variations or comparable terminology, or by discussions of strategy,plans, objectives, goals, future events or intentions. These forward-lookingstatements include all matters that are not historical facts. They include, butare not limited to, statements regarding the Company's intentions, beliefs andstatements of current expectations concerning, amongst other things, theCompany's results of operations, financial condition, liquidity, prospects,growth, potential acquisitions, strategies and as to the industries in which theCompany operates. By their nature, forward-looking statements involve risk anduncertainty because they relate to future events and circumstances that may ormay not occur. Forward-looking statements are not guarantees of futureperformance and the actual results of the Company's operations, financialcondition and liquidity and the development of the country and the industries inwhich the Company operates may differ materially from those described in, orsuggested by, the forward-looking statements contained in this document. TheCompany does not intend, and does not assume any obligation, to update or reviseany forward-looking statements or industry information set out in this document,whether as a result of new information, future events or otherwise. The Companydoes not make any representation, warranty or prediction that the resultsanticipated by such forward-looking statements will be achieved. This information is provided by RNS The company news service from the London Stock Exchange