SOURCE: Zhaikmunai LP

April 22, 2013 02:11 ET

Q1 2013 Operational Update - Outperforming Targets

AMSTERDAM, THE NETHERLANDS--(Marketwired - Apr 22, 2013) -

         Q1 2013 Operational Update - Outperforming Targets

Amsterdam, 22 April 2013- Zhaikmunai L.P. (LSE: ZKM) ("Zhaikmunai"),
the oil and gas exploration and production enterprise with assets in
north-western Kazakhstan, today announces record operational results in
respect of its first quarter ended 31st March 2013.

The financial information in this operational update is being issued in
advance of the release of Zhaikmunai's Q1 2013 unaudited and
consolidated accounts, which is scheduled for the week of May 20, 2013,
as a consequence of certain regulatory requirements in the Republic of
Kazakhstan. The financial information in this update has not yet been
audited and remains subject to further review.


* Record total average daily production of 46,273 boepd, an
  increase of 25% compared to FY2012 average (36,940 boepd);
* Record total revenue of US$ 228 million, up 40% compared to Q1
  2012 (US$ 163 million);
* Record EBITDA expected to be above US$ 140 million (Q1 2012: US$
  110 million);
* Total cash position of US$ 287 million (including short-term
  deposits) up 14% compared to the end of FY 2012 (US$ 251 million);
* Total net debt fell to approximately US$ 363 million;
* Net debt to EBITDA ratio fell below 0.75x;
* Excess cash to be deployed through a GDR Buy-Back Programme of up
  to US$ 50 million;
* Appointment of Deutsche Bank AG, London Branch ("Deutsche Bank")
  and VTB Capital plc ("VTB Capital") as joint corporate brokers.


Record Production Drives Revenue and EBITDA Higher

* Total average daily production for Q1 2013 was 46,273 boepd, an
  increase of approximately 24% compared to Q4 2012 (37,184 boepd);
* Q1 2013 total average daily production was above the 2012
  guidance of 45,000 boepd;
* The product split for Q1 2013 was as follows:

PRODUCTS                      Q1 2013 Average        Q1 2013 Product
                                Production                Mix %
Crude Oil & Stabilised         19,705 boepd                43%
LPG (Liquid Petroleum Gas)      3,651 boepd                 8%
Dry Gas                        22,917 boepd                49%
TOTAL                          46,273 boepd               100%

Kai-Uwe Kessel, Chief Executive Officer of Zhaikmunai, commented:
"I am delighted with the outstanding performance we have achieved
operationally in the first quarter of 2013. Our production is above our
target for the year, our cash flows are ahead of the budget and we
continue to enhance the operations at the field site. I am pleased with
the progress made on the drilling side as we continue to develop the
reserves of the Chinarevskoye field. As a result, we have built a
strong and stable cash position, which allows us to return cash to
shareholders through both dividends and GDR buy-backs whist still
providing us the room to execute all of our strategic initiatives. In
addition, we are delighted to appoint Deutsche Bank and VTB Capital as
our joint corporate brokers and we look forward to working with them to
enhance recognition of the Zhaikmunai success story in the market."

Drilling activities

* A total of three extra new wells have been completed in the
  course of Q1 2013: 2 gas condensate production wells and 1 crude oil
  appraisal well;

* Wells # 216 and # 410 are the two gas condensate wells completed
  in Q1 2013:
     o Well # 216 (Biski-Afoninski) was drilled as a deviated
       directional gas condensate production well for the Biski-
       Afoninksi reservoirs about 3 km west of production Well # 119.
       Reservoir pressure is in line with expectations and the well is
       currently under test operations and has been connected to the
       GTF, producing some 300,000 m3 of raw gas per day on a 10 mm
       choke, which is approximately 3,500 boepd. The well is under
       preparation for further testing with larger choke sizes;
     o Well # 410 (Tournaisian) was drilled using the same successful
       directional drilling technology previously applied for
       Tournaisian gas condensate wells. It has found the top of the
       Southern Tournaisian reservoir approximately 20 metres lower
       than expected and is currently under test operations;

* Well # 701 is the appraisal well completed in the Middle
  Carboniferous Bashkirian oil reservoir in Q1 2013:
     o Well # 701 was drilled in the northeastern part of the
       Chinarevskoye field about 600 metres southeast of Well # 51,
       which had tested oil from the Bashkirian reservoir in a drill
       stem test. Drilling of Well # 701 was finalised in March 2013.
       The planned test for the Bashkirian horizon will start at the
       end of April and will test flow rates from a 9 m oil bearing
       reservoir interval at different choke sizes.

* Zhaikmunai is on target to achieve its planned drilling programme
  for 2013, i.e. 15 - 17 wells, 9 of which will be appraisal wells, 1
  exploration well and 5 to 7 production wells. The field currently has
  15 oil wells and 12 gas condensate wells in operation.

Other News

Initiation of GDR Buy-Back Programme

On 22 April 2013, Zhaikmunai also announces the terms of commencement
of a long-term GDR Buy-Back programme to assist in driving shareholder
value. The details of this programme are featured in a separate
announcement. The programme will commence following the release of the
Q1 2013 Results, which are scheduled during the week of May 13, 2013.

This follows the announcement made on 2 April 2013 that on Thursday, 28
March 2013 the limited partners of Zhaikmunai duly passed all proposed
resolutions at the Special General Meeting of limited partners. These
resolutions approved amendments to Zhaikmunai's limited partnership
agreement to provide for a GDR Buy-Back Programme and the
implementation of such programme by Zhaikmunai Group Limited,
Zhaikmunai's general partner.

Appointment of Joint Corporate Brokers

On 18 April 2013, Zhaikmunai appointed Deutsche Bank AG, London Branch
("Deutsche Bank") and VTB Capital plc ("VTB Capital") as joint
corporate brokers with immediate effect. In addition to the standard
broking role the two banks are expected to implement Zhaikmunai's GDR
Buy-Back Programme.

Gas Flaring Claim

On 11 April 2013, Zhaikmunai LLP received a statement of claim from the
West Kazakhstan Inter-regional Geology and Subsoil Use Department
requesting a Kazakh court to impose damages on Zhaikmunai LLP in the
amount KZT 1,758,171,972 (approximately US$ 11 million) for allegedly
flaring gas without the appropriate permit during Q4 2010 and July

Zhaikmunai believes that the claim is unfounded, has filed a petition
challenging the basis for the claim in the Kazakh courts and intends to
vigorously contest the claim. The claim does not affect Zhaikmunai's
ongoing operations.

KASE (Kazakshtan Stock Exchange) Presents Zhaikmunai with Special Award

On March 29 2013, Zhaikmunai was presented with a special award by KASE
for its transparency record.

Arnat Abzhanov, Member of the Management Board, JSC Halyk Finance,
commented:"Companies who are listed on more than one stock exchange are
with different and sometimes conflicting reporting requirements. The
KASE award demonstrates that Zhaikmunai manages these challenges
efficiently every day and is fully committed to all of its security

Expansion of Processing Capacity with Additional Train to Gas Treatment

Design of the third train of Zhaikmunai's Gas Treatment Facility (GTF)
has been completed and has received approval from the Kazakh
authorities. Zhaikmunai is currently analyzing and evaluating the bids
for the final selection of the main process and auxiliary equipment
vendors. The tender for civil and construction works has been launched
and results are expected in the course of Q2 2013.


Zhaikmunai L.P. plans to release its unaudited consolidated accounts
for its first quarter ended 31st March 2013 in the week of May 13,
2013. Zhaikmunai's management team will be available for analysts and
investors for a Q&A session following the release. Registration details
for the conference call will be provided well in advance of the
scheduled release date.

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

Pelham Bell Pottinger                 + 44 (0) 207 861 3232
Philip Dennis
Elena Dobson

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
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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