SOURCE: Zhaikmunai LP

August 29, 2013 02:05 ET

H1 2013: Zhaikmunai Posts Record Results

NETHERLANDS--(Marketwired - Aug 29, 2013) -

                         H1 2013 Results:
     Zhaikmunai Posts Record Financial and Operational Results

Amsterdam, 29 August 2013 - Zhaikmunai L.P. (LSE: ZKM) ("Zhaikmunai"),
the oil and gas exploration and production enterprise with assets in
north-western Kazakhstan, today announces record results in respect of
the six month period ended 30th June 2013.


     o Record total revenue of US$ 442 million, up 37% compared to H1
       2012 (US$ 323 million);
     o Record EBITDA of US$ 285 million, up 34% compared to H1 2012
       (US$ 213 million);o Total cash position of US$ 280 million (including short-term
       deposits) up 12% compared to the end of FY 2012 (US$ 251
     o Total net debt of US$ 373 million at 30th June 2013, down 7%
       compared to the end of FY 2012 (US$ 401 million);
     o Net debt to LTM EBITDA ratio fell below 0.75x;
     o Distribution of US$ 0.34 per common unit to Zhaikmunai's
       limited partners effective on 26 July 2013, Zhaikmunai's second
       distribution to the limited partners.

     o Record total average daily production of 46,370 boepd, an
       increase of 31% compared to FY2012 average (36,940 boepd) (Q2
       2013 total average daily production of 46,534 boepd (Q2 2012:
       37,285 boepd));
     o On-target to deliver the planned drilling programme for 2013: the
       Chinarevskoye field currently has 15 crude oil wells and 13 gas
       condensate wells in operation.

Kai-Uwe Kessel, Chief Executive Officer of Zhaikmunai, commented:"Zhaikmunai's H1 2013 record results bear witness to the patient
efforts Zhaikmunai has been making on many different fronts for some
time. Our financial performance is excellent, as demonstrated by our
record revenue and EBITDA. It is also sustainable. These excellent
results, driven primarily by the 31% in production, allow Zhaikmunai to
pursue its growth strategy through its drilling programme and further
preparatory work around the planned third train of the GTF. Our
investment in growth is bearing its fruits as we reduced leverage,
outperformed production targets and made our second annual
distribution. We have an outstanding platform to build on in the second
half of the year."


All figures in US$ million (unless otherwise stated)

                H1 2013   H1 2012   Change

Revenue         442.5     323.4     36.8%

EBITDA          284.9     212.8     33.9%

EBITDA Margin   64.4%     65.8%     (2.1%)

                H1 2013   FY 2012   Change

Cash Balance1   279.5     251.4     11.2%

Net Debt        372.7     401.1     (7.1%)

Revenue, EBITDA and Net Income

Revenue from sales of crude oil, stabilised condensate, LPG and dry gas
stood at US$ 442 million. EBITDA stood at US$ 285 million. The EBITDA
margin remained relatively stable, decreasing slightly to 64.4% from
65.8% in H1 2013 reflecting operational leverage from the capacity to
handle increased production. Net income was also up for the period at
US$ 112 million.

Cost of Sales

Cost of sales increased by US$ 40.4 million, or 42.5%, to US$ 135.3
million in the six months ended 30 June 2013 from US$ 95.0 million in
the six months ended 30 June 2012 due primarily to an increase in
royalties, government share, changes in stock, repair and maintenance
and payroll expenses, partially offset by a decrease in materials and
supply expenses.

Materials and supply expenses decreased 16.1% to US$ 6.3 million while
repair and maintenance expenses increased 10.8% to US$ 24.8 million,
mainly due to the increased operations and production related to the
Gas Treatment Facility (GTF). Depreciation and amortization also
increased 38.5% or US$ 17.6 million in the six months ended 30 June
2013 to US$ 63.2 million.

On a boe basis, cost of sales increased marginally by US$ 0.31 or 1.9%,
to US$ 16.56 in the first six months of 2013 from US$ 16.25 in the
first six months of 2012, and cost of sales net of depreciation per boe
increased US$ 0.38, or 4.5% to US$ 8.82 in the first six months of
2013 from US$ 8.44 in the first six months of 2012.


Zhaikmunai ended the first half of 2013 with US$ 279.5 million in cash
and cash equivalents, which includes US$ 4.2 million of restricted
cash, US$ 5.0 million in non-current investments, and US$ 14.5 million
of short-term deposits. This represents a US$ 28.2 million increase, or
11.2%, compared to the end of the 2012 financial year.

Distribution to Zhaikmunai's limited partners of US$ 0.34 per common

Zhaikmunai made a distribution to its limited partners of US$ 0.34 per
common unit (the "Distribution"), its second distribution to its
limited partners in line with its on-going distribution policy. The
Distribution was paid by Zhaikmunai on 26 July 2013 to common unit
holders on the register of partners and interests at the close of
business on 19 July 2013.

Initiation of GDR Buy-Back Programme

On 22 April 2013, Zhaikmunai announced the terms of a long-term GDR
Buy-Back programme to assist in driving shareholder value. This
programme commenced as planned in the week of 20 May 2013, following
the release of the Q1 2013 Results.

Zhaikmunai has since purchased 809,611 of its Global Depositary
Receipts ("GDRs") through Deutsche Bank AG and VTB Capital plc. The
purchased GDRs are currently being held in treasury by the Partnership,
which has 187,373,337 GDRs in issue (excluding those GDRs held as
treasury GDRs).

1 Including restricted cash, non-current investments and short-term


Record Production Drives Revenue and EBITDA Higher

* Total average daily production for H1 2013 was 46,370 boepd, an
  increase of approximately 31% compared to H1 2012 (35,298 boepd);
* H1 2013 total average daily production was above the 2012
  guidance of 45,000 boepd;
* The product split for H1 2013 was as follows:

PRODUCTS                      H1 2013 Average        H1 2013 Product
                              Production             Mix %

Crude Oil & Stabilised        19,644 boepd           42%

LPG (Liquid Petroleum Gas)    3,950 boepd            9%

Dry Gas                       22,777 boepd           49%

TOTAL                         46,370 boepd           100%

Drilling activities

* 5 drilling rigs are being operated on a full-time basis on the
  Chinarevskoye field;

* Update on crude oil wells:
     o Drilling started on new crude oil wells # 59 and # 60;
     o Testing started on oil well # 117;
     o Production testing was completed on crude oil well # 725;

* Update on gas condensate wells:
     o Drilling started on new gas condensate wells # 208, # 223 and #
     o Gas condensate well # 217 is consistently performing above
     o Gas condensate well # 27AD has, on the other hand, been behaving
       below expectations;

* Zhaikmunai is on target to achieve its planned drilling programme
  for 2013. The field currently has 15 oil wells and 13 gas condensate
  wells in operation.

Expansion of Processing Capacity with Additional Train to Gas Treatment

Zhaikmunai has completed the design of its Gas Treatment Facility's
(GTF) third train, which has been approved by the relevant Kazakh
authorities. Bids for the final selection of the main process and
auxiliary equipment vendors are currently being evaluated. The civil
and construction works tender process has equally been launched. Final
results and contracts are expected in the second half of 2013.

Other News

Zhaikmunai Wins First Prize in Kazakhstan's Environmental Protection

On June 5, 2013, World Environment Day, Zhaikmunai received the first
prize in Kazakhstan's "Investment in Ecology Contest" organized by the
Ministry of Environmental Protection. The prize underscores Zhaikmunai
strong environmental protection record, its ambitious social
development programme as well as its dedication to community building.


Zhaikmunai's management team will be available for a Q&A session for
analysts and investors on Thursday, 29 August 2013 at 14:00 UK time
(UTC/GMT+1 hour).

If you would like to participate in this call, please register by email
using the following email address: .
Please provide your ID details (name, title, company, email address and
telephone number) in order to receive dial-in details.

Download the H1 2013 Financial Statements 

Download the H1 2013 Management Report 

Further information

For further information please visit 

Further enquiries

Zhaikmunai LP - Investor Relations
Bruno G. Meere
Kirsty Hamilton-Smith                        + 31 20 737 2288

Deutsche Bank                                      + 44 (0) 207 545 8000
Ben Lawrence
JM Hafner
Rob Abbott

VTB Capital plc                                    + 44 (0) 203 334 8000
Alexander Metherell
Marcus Brown
Giles Coffey

College Hill                                       + 44 (0) 207 457 2020
David Simonson
Tony Friend
Catherine Wickman
Anca Spiridon

About Zhaikmunai

Zhaikmunai is an independent oil and gas enterprise currently engaging
in the production, development and exploration of oil and gas in
north-western Kazakhstan. Its Global Depositary Receipts (GDRs) are
listed on the London Stock Exchange (Ticker symbol: ZKM). Zhaikmunai's
principal producing asset is the Chinarevskoye field, in which it holds
a 100% interest and is the operator, through its wholly-owned
subsidiary Zhaikmunai LLP. In addition, Zhaikmunai holds a 100%
interest in and is the operator of the Rostoshinskoye, Darinskoye and
Yuzhno-Gremyachenskoye oil and gas fields. Located in the pre-Caspian
basin to the north-west of Uralsk, these exploration and development
fields are approximately 60 and 120 kilometres respectively from 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.

Deutsche Bank

Deutsche Bank AG is authorised under German Banking Law (competent
authority: BaFin - Federal Financial Supervisory Authority) and
authorised and subject to limited regulation by the Financial Conduct
Authority (the "FCA"). Details about the extent of Deutsche Bank AG's
authorisation and regulation by the FCA are available on request.

VTB Capital

VTB Capital Plc is authorised by the Prudential Regulation Authority
and regulated by the Financial Conduct Authority and the Prudential
Regulation Authority.

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