Kazmunaigaz Exploration Regulatory News (KMG)

19 Mar 2007 07:45

JSC KazMunaiGas Exploration Prod19 March 2007 KazMunaiGas EP announces its financial results for the year ended December 31, 2006 Astana, 19 March, 2006. JSC KazMunaiGas Exploration Production ("KMG EP" or the"Company") has released today the Company's consolidated financial statementsfor the year ended December 31, 2006. The financial statements have beenprepared in accordance with International Financial Reporting Standards and havebeen audited by Ernst & Young. Profit after tax (net income) from continuing operations for 2006 was 122.6 bnTenge, 180.1% higher than for 2005. The growth in net income was driven byfavorable oil market conditions, production growth, continued cost control,release of certain accruals made in earlier periods and recent tax amendments toone of the subsoil agreements. Commenting on the financial results for 2006, Askar Balzhanov, the CEO of theCompany, said "These results mark the culmination of a very successful year forour company highlighted by our Stock Exchange listings in both Kazakhstan andLondon. These strong financial results position the company very well to pursueour growth strategy going forward." The Company's revenues for 2006 increased by 18.1% year on year to 412.2 bnTenge. This was primarily due to a 17% increase in the average realised pricefrom 37,182 Tenge per tonne (38.70 USD per bbl) to 43,498 Tenge per tonne (47.71USD per bbl) and a sales volume increase of 0.7% to 9.29 mn tonnes (187.3kbopd). The average realised price went up primarily because of improved exportprices. Exports accounted for 73% of 2006 sales in volume terms (71% in 2005). Operating expenses in 2006 were 194.5 bn Tenge which is 12.5 bn Tenge less thanin 2005. The reduction in operating expenses was primarily due to release of aprovision for an environmental fine of 11.4 bn Tenge which was successfullychallenged by the Company in court in 2006. In addition, materials and suppliesexpenses were reduced by 10.0 bn Tenge compared to 2005. This was partly offsetby an increase in transportation and certain other expenses as well as by animpact of a change in accounting for social projects. Operating cash flow was 122.2 bn Tenge in 2006, approximately 62.8% higher thanfor the prior year mainly due to favorable export oil prices and increased salesvolumes. Purchases of property, plant and equipment (capital expenditures, not includingpurchases of intangible assets, as per Cash Flow Statement) in 2006 were 49.3 bnTenge or 20.4% less than in 2005, reflecting primarily the disposal of theAtyrau Refinery in 2005. Adjusting for the disposal, capital expendituresremained at approximately the same level. Cash, cash equivalents and financial assets at the end of 2006 amounted to 391.8bn Tenge compared to 94.1 bn Tenge at the end of 2005. During 2006 the Companyreceived approximately 251.3 bn Tenge in proceeds from the placement of newshares successfully completed in October 2006 and paid 17.6 bn Tenge individends. Borrowings were 59.7 bn Tenge at the end of 2006 compared to 75.1 bnTenge at the end of 2005. The full consolidated financial statements, the notes thereto and the Operatingand Financial Review are available at the Company's website (www.kmgep.kz ) *** Appendix Key operating and financial indicators of JSC KazMunaiGas Exploration Production Summary operating data For the year ended December 31, thousand tonnes 2006 2005 Crude oil production 9,530 9,340Crude oil exports 6,739 6,489Crude oil domestic 2,551 2,733 Summary Consolidated Balance Sheets December 31,Tenge Millions 2006 2005 ASSETSNon-current assets 376,824 305,760 358,114 130,623 Current assetsTotal assets 734,937 436,384EQUITY Equity holders of the Company 525,752 173,653Minority interest 6 80Total equity 525,758 173,733LIABILITIESNon-current liabilities 100,844 117,928 Current liabilities 108,336 144,723Total liabilities 209,180 262,651TOTAL EQUITY AND LIABILITIES 734,937 436,384 Summary Consolidated Statements of Income For the year ended December 31,Tenge Millions 2006 2005 CONTINUING OPERATIONS Revenue 412,208 348,888Operating expenses (194,530) (207,034)Profit from operations 217,678 141,854Finance (expense) income (116) 1,381Share of result of associates (328) (286)Profit before tax and minority interest 217,234 142,948Income tax expense (94,673) (99,193)Profit for the period from continuing operations 122,561 43,756 DISCONTINUED OPERATIONSProfit for the year from discontinued operations - 1,521Profit for the period 122,561 45,277 Attributable to:Equity holders of the Company 122,561 45,075Minority interest - 202 Summary Consolidated Statements of Cash Flows For the year ended December 31,Tenge Millions 2006 2005 Net cash generated from operating activities 122,210 75,054Cash flows from investing activitiesPurchases of property, plant and equipment (PPE) (49,286) (61,916)Purchases of held-to-maturity financial assets (170,235) (25,696)Loans granted to related parties (118,250) (30,304)Other 39,381 18,421Net cash used in investing activities (298,389) (99,496)Cash flows from financing activitiesProceeds from the issue of shares 151,881 31Transaction costs related to the issue of shares (7,300) -Purchase of treasury shares (3,818) -Proceeds from the issue of bonds 94,792 -Proceeds from borrowings 7,681 71,002Repayment of borrowings (1,695) (30,408)Dividends paid to Company's shareholders (17,631) (3,409)Other (4,649) (7,135)Net cash from financing activities 219,260 30,082 The following tables show the Company's realised sales prices adjusted for oiland oil products transportation and other expenses for the years ended 31December 2006 and 2005. Netback analysis*, 2006 CPC UAS Domestic Total Sales volume, thousand tonnes 1,663 5,076 2,551 9,290Estimated market quote**, USD/bbl 65.23 60.99 n/a n/aAverage realized price, USD/bbl 61.32 57.57 19.22 47.71Adjusted realized price, net of 55.32 51.34 17.86 42.86transportation and selling expenses, USD/bbl Netback analysis*, 2005 CPC UAS Domestic Total Sales volume, thousand tonnes 1,536 4,953 2,733 9,222Estimated market quote**, USD/bbl 53.50 50.52 n/a n/aAverage realized price, USD/bbl 51.30 47.66 15.38 38.70Adjusted realized price, net of 45.98 41.77 12.02 33.66transportation 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 2006 2005 Average exchange rate USD/KZT* 126.09 132.88Exchange rate USD/KZT as of December, 31* 127.00 133.77 *Source: The National Bank of Kazakhstan Notes to Editors JSC KazMunaiGas Exploration Production, headquartered in Astana, is the 3rdlargest Kazakh oil and gas producing company with 205.9 mmt (1.5 bn bbl) ofproved and probable reserves at the end of 2005 and over 9.5mmt/year (192 kbopd)of crude production in 2006. The Company's shares are listed on KazakhstanStock Exchange and the GDRs are listed in London. The company raisedapproximately US$2 billion in its successful IPO in September of 2006. The Company extracts hydrocarbon resources from 44 oil and gas fields located inthe Atyrau and Mangistau regions in western Kazakhstan and is also engaged inonshore exploration activities, concentrated in the same areas. 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 WMC Communications Ltd (+44 207 930 9030) Alex Glover: (+44 207 930 9030) E-mail: alex.glover@wmccommunications.com Elena Dobson: (+44 (0)7932524760) E-mail: Elena.dobson@wmccommunications.com 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