ISLE OF MAN, UNITED KINGDOM--(Marketwire - May 27, 2011) -
Zhaikmunai L.P.
(the "Partnership")
Q1 2011: CONTINUED STRONG REVENUE AND EBITDA
Zhaikmunai LP (LSE: ZKM), the oil and gas exploration and production
enterprise based 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 1 January to 31 March 2011.
GAS TREATMENT FACILITY (GTF) UPDATE:
* Commissioning of the first train of the GTF has progressed
further and test production of stabilised condensate, LPG (Liquid
Petroleum Gas) and dry gas has continued since Zhaikmunai's last
operational and financial update of 28 April 2011;
* Cumulative test production, as of 26 May 2011, amounted to the
following:
o Stabilised condensate (test production started on 2 April, 2011):
100,629 boe
o LPG (test production started on 2 April, 2011): 2,327 boe
o Dry gas (test production sold to pipeline started on 4 May, 2010):
51,660 boe
* Further progressive production ramp-up is scheduled with the
on-going commissioning of the sulphur recovery unit (amine tower).
FIRST QUARTER SUMMARY
All figures in US$ millions unless otherwise stated
Q1 2011 Q1 2010 Change YoY
%
Revenues from oil sales 52.402 40.616 11.786 +29.0%
EBITDA 28.655 25.797 2.858 +11.1%
Net income 11.121 13.451 (2.330) (17.3%)
Production (boepd) 6,722 7,315 (593) (8.1%)
Debt 450.000 381.677 68.323 +17.9%
Average realised oil price (US$ per 104.18 76.99 27.19 +35.3%
bbl)
Discount (US$ per bbl) 15.70 14.64 1.06 +7.2%
Weighted average netback (US$ per bbl) 88.48 62.35 26.13 +41.9%
PRODUCTION HIGHLIGHTS
Current estimated total production has increased significantly with the
test production of stabilised condensate, LPG and dry gas from the GTF.
Crude oil production has temporarily decreased in the first quarter to
2011 due to workover operations on wells 24 and 30 and to technical
preparation of wells 28 and 115 towards the commencement of GTF test
production.
FINANCIAL HIGHLIGHTS
Revenue and EBITDA
Revenue from oil sales stood at US$54.402 million, an increase of 29.0%
or US$11.786 million in comparison to last year's first quarter
(US$40.616 million). The high oil price environment has clearly
contributed to this outstanding first quarter revenue. Zhaikmunai
realized considerably higher netback prices as the Brent price rose to
a level above US$115 per barrel towards the end of the first quarter.
Zhaikmunai's discount, however, increased by US$1.06 per barrel to
US$15.70 per barrel, due to increases in rail tariffs, specifically in
Russia.
EBITDA stood at US$ 28.655 million, an increase of 11.1% or US$2.858
million in comparison to last year's first quarter (US$25.797 million).
Net income
Net income for the period decreased 17.3% to US$11.1 million from US$
13.5 million for the same period in 2011. The decrease in net income
was caused by the higher than proportional increase in corporate income
tax (CIT). This higher CIT was driven, in turn, by a higher amount of
non-deductible interest costs linked to the application of current
market interest rates to intergroup financing activities.
Cost of Sales and General and Administrative Expenses
Cost of sales increased by US$3.1million, or 28.3%, to US$14.2million
compared to US$11.1million for the same period in 2010. The increase
in cost of sales was partially offset by the change in oil stock and
lower depreciation expenses. General and administrative expenses
increased by US$4.3 million, or 75%, to US$10.1 million compared to
US$5.8 million for the same period in 2010.
Cash
Zhaikmunai ended the first quarter of 2011 with US$134.4 million of
cash and cash equivalents, of which US$2.7 million was restricted cash.
As a result of the refinancing of its senior debt through the issuance
of a bond in October 2010, there is no longer any obligation for
Zhaikmunai to retain any of its cash in a debt service reserve account.
Hedging
On March 29, 2011 the Partnership entered into a new zero-cost hedging
contract covering oil sales of 2,000 bbl/day running through December
31, 2011. Based on the new hedging contract the Partnership bought a
put at US$85/bbl, sold a call at US$125/bbl and bought a call at
US$134/bbl.
Kai-Uwe Kessel, Chief Executive Officer, commented:"Zhaikmunai
again delivered strong quarterly revenue and EBITDA, thanks
in part to the high oil price environment. At the same time, we
continued to work towards completing the full commissioning and the
final takeover of the Gas Treatment Facility. Already, our combined
daily estimated production stands at around 14,000 boe per day and
includes both crude oil and GTF products (stabilised condensate, LPG
and dry gas). We have thus already more than doubled our daily capacity
as averaged over the last three years. The production ramp-up for Train
1 is scheduled to be completed in the course of the second quarter. We
are currently at a pivotal stage in the commissioning process and we
are also looking forward to the anticipated production ramp-up for
Train 2."
For further information please visitwww.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) 207 861 32 32
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 northwestern
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.
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