Zhaikmunai L.P.
(the "Partnership")
GAS TREATMENT FACILITY UPDATE AND Q4 REVIEW
Zhaikmunai LP (LSE : ZKM ), the oil and gas exploration and production
business with assets in north-western Kazakhstan, today provides an
operational update on its Gas Treatment Facility (GTF) as well as a
specific review for the period from 30 September to 31 December 2010.
Gas Treatment Facility (GTF) Update
* Test production of condensate from the Gas Treatment Facility
(GTF) has started and Zhaikmunai expects that commercial production
from the first train of the GTF will commence within the next two
weeks. This represents a delay of approximately 2 months compared to
management's initial expectations, as expressed in the Company's press
release of 16 December 2010;
* Concurrently, Zhaikmunai's contractors, KasStroyService and
Exterran, are pursuing commissioning and final operational testing of
the GTF;
* This test production follows mechanical completion of the Gas
Treatment Facility (GTF) and the delivery of the "Act of Acceptance of
a Completed Facility" for the GTF by the State Acceptance Commission;
* Zhaikmunai has agreed on terms for the offtake of all of its 2011
gas production from the GTF. While the details of such terms are
confidential, Zhaikmunai can confirm that they reflect terms and
conditions generally applicable in the market and are in line with
management's expectations. The gas sales contract incorporating these
terms will be exchanged on the date commercial production commences.
Q4 Review and Financial Highlights
* Revenues were USD50.38 million, an increase of 39% compared with
Q4 2009;
* The Partnership's 100% subsidiary Zhaikmunai Finance B.V. has
completed a successful USD450 million bond offering, which allowed the
Partnership's 100% operating subsidiary Zhaikmunai LLP ("Zhaikmunai"
or "the Company") to repay its bank debt in full.
Commenting on the results for the period, Kai Uwe Kessel, Chief
Executive of Zhaikmunai, said:"The last quarter of 2010 has seen
Zhaikmunai fulfil some key strategic objectives. On the production
side, the mechanical completion of the GTF and the ensuing State
Acceptance Act open the way for achieving our planned production
profiles in 2011. On the financing side, a subsidiary of the
Partnership successfully issued a USD450 million bond,
which allowed for the repayment of Zhaikmunai's outstanding syndicated
loan. These important milestones reinforce our long-term positioning as
a reliable oil and gas player into the future."
Fourth Quarter Summary
All figures in USD millions unless otherwise stated
Q4 2010 Q4 2009 Change YoY
Revenues from oil sales 50.38 36.17 +39.3%
Production (bopd) 7,536 7,559 - 0.3%
Average realised oil price (USD per bbl) 86.70 75.59 +14.7%
Discount @ FCA Uralsk (USD per bbl) 13.63 15.02 -9.3%
Weighted average netback (USD per bbl) 73.07 60.57 +20.6%
Full Year 2010 Summary
All figures in USD millions unless otherwise stated
2010 2009 Change YoY
Revenues from oil sales 178.16 116.03 +53.5%
Production (bopd) 7,752 7,442 +4.2%
Average realised oil price (USD per bbl) 80.15 62.02 +29.2%
Discount @ FCA Uralsk (USD per bbl) 14.01 15.21 -7.9%
Weighted average netback (USD per bbl) 66.14 46.81 +41.3%
Revenue
Revenues from oil sales for the fourth quarter of 2010 were USD50.38
million (Q4 2009: USD36.17 million), up 39% from the fourth quarter in
2009 due mainly to higher sales volumes and higher realised oil prices.
Sales volumes for the fourth quarter of 2010 were 671,019 bbls (Q4
2009: 726,281bbls), up 12% from the fourth quarter in 2009.
Revenues from oil sales for the full year 2010 were USD178.16 million
(2009: USD116.03 million), up 54% from the full year 2009. Sales
volumes for the full year 2010 were 2,634,553 bbls (2009: 2,675,505
bbls), down 2% from the full year 2009.
Part of the revenue increase is due to the fact that during the second
half of the year the delivery terms of Zhaikmunai's sales contracts
changed. The point of sale was changed from FCA (Uralsk) to DAF
(Ukrainian Border) and FOB (Black Sea).
Netback
The weighted average Brent crude oil price, on which Zhaikmunai bases
its sales, for the fourth quarter of 2010 was USD86.70/bbl versus
USD75.59/bbl for the fourth quarter of 2009. The discount, accounting
for the trader's costs and fees calculated at FCA Uralsk, for the
period was USD13.63/bbl (versus USD15.02/bbl in Q4 2009).
The weighted average Brent crude oil price for the full year 2010 was
USD80.15/bbl versus USD62.02/bbl for the full year 2009. The discount,
accounting for the trader's costs and fees calculated at FCA Uralsk,
for the full year 2010 was USD14.01/bbl (versus USD15.21/bbl for the
full year 2009).
Production
Zhaikmunai achieved production volumes of 693,772 bbls in the fourth
quarter of 2010, relatively unchanged from 695,712 bbls in the
equivalent period in 2009. Average daily production during Q4 stood at
7,536 barrels per day (comparable to the average of 7,559 barrels per
day in Q4 2009).
The production ramp-up, which is linked to the GTF coming on-line, has
been slightly shifted from the fourth quarter of 2010 to the first
quarter of 2011 due to construction delays.
Total production volume for oil and condensate for the full year 2010
was 2,829,764 bbls (2009: 2,697,980 bbls), up 4.9% from the full year
2009.
Engineering and Construction
During the fourth quarter, all of Zhaikmunai's ancillary infrastructure
projects related to GTF operations have been completed. These included
the following:
* a gas pipeline and a gas metering station measuring amounts of gas
delivered from the Chinarevskoye Field to the Orenburg-Novopskov gas
pipeline have been completed ;
* the flow lines from the gas condensate wells to the GTU have been
laid and pressure tested. The gas condensate wells have been connected
to the manifold at the Gas Treatment Unit site;
* additional storage facilities have been erected at the field site
(3x5000m3) and at the rail terminal (2x5000m3) to increase the overall
storage capacity and to allow for separate storage of oil and
condensate.
Drilling
At the end of December 2010, the Company was employing three heavy
drilling rigs: one from Saipem and two from local drilling contractor
UNGG. During the last quarter of 2010, the Saipem rig was drilling Well
213, which was completed in early February 2011. One UNGG rig was
drilling Well 57, which was completed in early January 2011, and the
second UNGG rig spudded new exploration/appraisal Well 45 on the 7th of
December 2010.
For further information please visit www.zhaikmunai.com.
Further enquiries
Zhaikmunai LP
Bruno Meere, Investor Relations Officer
investor_relations@zhaikmunai.com +44 (0) 1624 68 21 79
Pelham Bell Pottinger
Philip Dennis
Elena Dobson +44 (0) 20 7861 3232
About Zhaikmunai
Zhaikmunai is an independent oil and gas enterprise currently engaging
in the exploration and development and production of oil and gas. It is
listed on the London Stock Exchange (Ticker symbol: ZKM). Its principal
producing asset is the Chinarevskoye Field located in north-western
Kazakhstan. Zhaikmunai L.L.P., a wholly-owned subsidiary of Zhaikmunai
L.P., holds a 100% interest in and is the operator of the Production
Sharing Agreement for the Chinarevskoye Field.
Forward-Looking Statements
Some of the statements in this document are forward-looking.
Forward-looking statements include statements regarding the intent,
belief and current expectations of the Partnership or its officers with
respect to various matters. When used in this document, the words
"expects," "believes," "anticipates," "plans," "may," "will," "should"
and similar expressions, and the negatives thereof, are intended to
identify forward-looking statements. Such statements are not promises
or guarantees, and are subject to risks and uncertainties that could
cause actual outcomes to differ materially from those suggested by any
such statements.
This information is provided by RNS
The company news service from the London Stock Exchange
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