SOURCE: Zhaikmunai LP

November 28, 2011 02:08 ET

Robust Financials Accompany Production Ramp-Up

ISLE OF MAN--(Marketwire - Nov 28, 2011) -

Zhaikmunai L.P.
(the "Partnership")


Zhaikmunai LP (LSE: ZKM) ("Zhaikmunai"), the oil and gas exploration
and production enterprise based in north-western Kazakhstan, today
releases its financial results for the three and first nine months
ended 30 September 2011. In addition, it concludes the first phase of
its development programme with the end of test production from its Gas
Treatment Facility (GTF) and the continued ramp-up in production
outlined in the operational update below.


All figures in US$ millions unless otherwise stated

                                         Q3 2011 Q3 2010 Change YoY

Revenue                                  63.693  53.126  + 19.9%

EBITDA                                   41.434  27.389  + 51.3%

Net income                               18.465  10.636  + 73.6%

Production (boepd)                       17,464  8,972   + 94.7%

Net Debt                                 297.305 303.308 - 2.0%

Average realized oil price (US$ per bbl) 114.78  78.64   + 46,0%

Discount (US$ per bbl)                   15.78   12.24   + 28.9%

Weighted average netback (US$)           99.00   66.40   + 49.1%

Zhaikmunai presents positive third quarter results combined with the
completion of the first phase of development as stable production is
reached by its GTF. Financial and operational indicators show a strong
upward trend in relation to third quarter 2010 results. GTF testing
resulted in production growth of over 94% over the period. In addition,
revenues, EBITDA and net income grew by approximately 20%, 52% and 74%
respectively. Near capacity production of the GTF is expected to
further enhance these results into the future.


All figures in US$ millions unless otherwise stated

                                         9M 2011 9M 2010 Change YoY

Revenue                                  189.600 127.780 + 48.4%

EBITDA                                   115.075 71.079  + 61.9%

Net income                               54.477  30.213  + 80.3%

Production (boepd)                       12,326  7,683   + 60.4%

Net Debt                                 297.305 303.308 - 2.0%

Average realized oil price (US$ per bbl) 111.63  78.33   + 42.5%

Discount (US$ per bbl)                   15.69   13.44   + 16.7%

Weighted average netback (US$)           95.94   64.89   + 47.9%


* Production:

o Q3 daily production average of crude oil and GTF test production
amounted to 17,464 boepd, an increase of 95% from the same period last

o First nine months daily production average of crude oil and GTF test
production (stabilised condensate, LPG and dry gas) amounted to 12,326
boepd, an increase of 60% compared to the same period in 2010.

* Revenue, EBITDA and Net Income:

All indicators have shown strong growth over the first nine months of
2011 with an increase of approximately 48%, 62% and 80% respectively
compared to the same period in 2010.

* Cash

2011Q3 position: US$155.771 million of cash and cash equivalents.

* Gas Treatment Facility (GTF) Handover:

The EPC contractor for the GTF is scheduled to hand over the GTF
facility as well as daily operations to Zhaikmunai at the end of
November/beginning of December 2011.


Revenue and EBITDA

Revenue from oil sales for the first nine months of the year stood at
US$189.600 million, an increase of 48.4% or US$61.820 million on the
comparative period last year. Zhaikmunai has consistently realized
higher netback prices as Brent prices have been in excess of US$100 per
barrel during most of the first nine months of 2011. Zhaikmunai's
discount, whilst higher than the same period last year, is in line with
Q1 and H1 results and reflects the increases in rail tariffs, primarily
in Russia.

EBITDA stood at US$115.075 million, a 62% increase or US$43.996 million
in comparison to last year's first nine months (US$71.079 million).


In accordance with IFRS, sales from the GTF test production are not
included in the company's revenue but are offset against expenditure.
Cumulative sales of GTF production (stabilised condensate, LPG and dry
gas) for the first nine months of 2011, amounting to US$35.542 million
(first nine months of 2010: nil), hence do not feature in the revenue
and EBITDA figures reported.

Net Income

Net income has increased over 80% compared to the same period last year
to US$54.477 million from US$30.213 million.

Cash and Net Debt

Zhaikmunai ended the third quarter of 2011 with US$155.771 million of
cash and cash equivalents of which US$3.076 million was restricted
cash, resulting in a net debt of US$297.305 million, a decrease of 2%
compared to the same period last year.


Stable GTF Production

The Gas Treatment Facility (GTF) has been operating since May 2011. All
GTF products (stabilised condensate, LPG and dry gas) are on-spec and
sold commercially to offtakers.

The GTF production levels are currently stable at around 60% of the
facility's design capacity. Final production flow adjustments are
scheduled in the course of Q4 in order to further ramp up production
towards design capacity of 40,000 boepd.

Handover of the Facility to Zhaikmunai

Zhaikmunai is scheduled to assume full operational responsibility for
its GTF following the handover from its EPC contactor scheduled to take
place on December 1, 2011. The progressive phase-in of Zhaikmunai's
personnel into GTF operation has built momentum over the last few
months. A full complement of 210 people is now in place to ensure a
smooth transfer of operational responsibility.

Zhaikmunai's team includes various specialised contractors as well as
many of the on-site personnel who took part in the construction and
erection of the equipment of the GTF.

GTF Sales Revenue to Flow Through in Q4

In accordance with applicable accounting standards, test production
from the GTF has since May 2011 been offset against infrastructure
investments. This treatment will change after take-over of the GTU as
revenue from the sale of all GTF products (stabilised condensate, LPG
and dry gas) will be recognised as production revenue and accounted for

Kai-Uwe Kessel, Chief Executive Officer, said:"Taking ownership of its Gas Treatment Facility places Zhaikmunai in a
very favourable position to pursue the development of the rest of the
Chinarevskoye field. We are now entering the planned higher production
profiles that will be coupled to significant increases in financial
performance over the coming year. This is setting the stage for
Zhaikmunai's second phase of development, which will include a further
production leapfrog through the planned Phase II of the GTF."

Frank Monstrey, Chairman, said:"Zhaikmunai closes its first phase of development with robust
financials and the handover of the GTF following stable operation. This
represents a major milestone for us. It follows a six-year investment
programme of over one billion US dollars into the development of the
Chinarevskoye oil and gas field. I would like to congratulate the
management team on the ground for yet again delivering on another major
project successfully. I am confident that we will continue to grow the
reserve base as well as the production during the coming years."


Zhaikmunai's management team will be available for a Q&A session for
analysts and investors on Wednesday, 30 November at 14:30 UK time

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.

Here you can download the pdf-file from this press release. 

Further enquiries

Zhaikmunai LP 

Bruno Meere, Investor Relations Officer           +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
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