Russia: Novatek Posts Strong Q3 Earnings

November 9, 2012

Novatek of Russia today released its results for the third quarter and nine months ending 30 September.

In the third quarter and nine months 2012, total revenues increased by 31.7% and 21.3%, respectively, as compared to corresponding periods of 2011. The growth was due to an increase in hydrocarbon sales volumes and higher natural gas and liquids prices.

In the third quarter 2012, profit from operations increased to RR 23,225 million, or by 35.6% as compared to the corresponding period of 2011, and for the nine months ending 30 September 2012, profit from operations amounted to RR 64,117 million, representing an increase of 13.1% as compared with the corresponding nine months 2011.

Profit attributable to Nobatek shareholders grew by 140.4% in the third quarter 2012 and by 22.9% in the nine months 2012, equaling RR 6.59 per share and RR 16.78 per share, respectively, which was partially attributable to non-cash foreign exchange gain in the third quarter and nine months 2012 as compared with non-cash losses in the same periods of 2011.

In the nine months 2012, natural gas sales volumes increased by 12.9% as compared with the corresponding nine month period due to a combined growth in production and purchases. In the third quarter 2012, natural gas sales volumes increased by 10.1% as compared with the third quarter 2011, which was primarily due to an increase in gas purchases.

During the third quarter 2012, injection of natural gas into underground gas storage facilities (UGSF) decreased by 732 million cubic meters, as compared with the third quarter 2011, due to accelerated injection rates in the second quarter 2012. As at 30 September 2012, total amount of natural gas injected into UGSF was 1,309 million cubic meters, which is 10.0% higher than at the end of September 2011.

In the nine months 2012, liquids sales volumes increased by 5.8% due to production growth and start of gas condensate purchases from OOO SeverEnergia, our joint venture, in April 2012. In the third quarter 2012, liquids sales volumes increased by 14.1% due to increase in purchases and decrease in liquids inventory balance.

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LNG World News Staff, November 9, 2012