ISLE OF MAN, UNITED KINGDOM--(Marketwire - Aug 29, 2012) -
Zhaikmunai L.P.
(the "Partnership")
H1 2012 INTERIM RESULTS AND UPDATE
Zhaikmunai LP (LSE : ZKM ), the oil and gas exploration and production
enterprise with assets in north-western Kazakhstan today details the
continued financial and operational progress made over the period from
1 January to 30 June 2012.
FINANCIAL HIGHLIGHTS
Q2 2012 Summary
All figures in USD millions unless otherwise stated
Q2 2012 Q2 2011 Change YoY
Production (boepd) 37,285 12,673 +194.2%
Revenue from hydrocarbon sales 160.0 73.5 +117.7%
EBITDA(1) 101.9 45.3 +125.0%
Net income 38.2 24.9 +53.5%
Net cash used in investing activities (34.4) (15.7) +119.1%
Debt 450.0 450.0 0.0%
Cash 162.8 128.5 +26.7%
Average realised oil
price (USD per bbl) USD104.26 USD115.64 (9.8%)
H1 2012 Summary
All figures in USD millions unless otherwise stated
H1 2012 H1 2011 Change YoY
Production (boepd) 35,298 9,714 +263.4%
Revenue from hydrocarbon sales 323.4 125.9 +156.9%
EBITDA(1) 212.8 73.9 +187.8%
Net income 86.6 36.0 +140.6%
Net cash used in investment activities (99.9) (39.1) +155.5%
Debt 450.0 450.0 0.0%
Cash 162.8 128.5 +26.7%
Average realised oil
price (USD per bbl) USD109.05 USD109.77 (0.7%)
OPERATIONAL UPDATE
* Production: July 2012 average total daily production amounted to
40,036 boepd, an increase of 20.2 % compared to Q1 2012 (33,310 boepd);
* Production: Q2 2012 average total daily production amounted to
37,285 boepd, representing a close to three-fold increase compared with
Q2 2011 (12,673 boepd);
* Production: H1 2012 average total daily production amounted to
35,298 boepd, representing a 263% production growth between H1 2011 and
H1 2012;
* Drilling: During H1 2012, a total of 2 gas-condensate wells
(#401 and # 218) have been drilled and tied-in to the GTF and a total
of 4 new crude oil wells (# 24b, # 116, # 67 and # 45) have been
drilled, with 3 currently producing and 1 in test production (# 45 with
commercial inflow of crude oil from the Bashkirian Reservoir).
CORPORATE DEVELOPMENTS
* Acquisitions: 3 neighbouring oil & gas license areas (cash
amount of USD 16 million);
* Premium Share Listing: Exploring a possible premium listing in
London and other alternatives to the current GDR listing through
extensive consultation with banks, lawyers as well as tax advisers to
achieve the best possible result for shareholders, and currently in the
final stages of selection of a sponsor;
* Gas Treatment Facility: Basic design of the Phase II GTF approved
by the local authorities.
OUTLOOK FOR H2 2012
* Production: Zhaikmunai intends on pursuing its production ramp-up
steadily in H2 2012 from current levels (cfr. July 2012 total average
daily production of 40,036 boepd) in line with its drilling and tie-in
schedule;
* Drilling: Expected additional drilling for H2 2012 of 6 wells, 5
will be gas-condensate wells and 1 will be an appraisal well for crude
oil;
* Capital Markets Day: This will be an opportunity to communicate
the appraisal and development programme for the 3 newly acquired fields
and to provide further detail on the capex programme for the
Chinarevskoye field.
COMMENTARY
OPERATIONAL RESULTS
* July 2012 average total daily production amounted to 40,036
boepd, an increase of 20.2% compared to Q1 2012 (33,310 boepd);
* Q2 2012 average total daily production amounted to 37,285 boepd,
representing a close to three-fold increase compared with Q2 2011
(12,673 boepd);
* H1 2012 average total daily production amounted to 35,298 boepd,
representing a 262% production growth between H1 2011 and H1 2012;
* Product split for H1 2012 was as follows:
Products Volumes Percentage
Crude Oil and Stabilized Condensate 2,654,411 boe 41.3%
LPG 534,131 boe 8.3%
Dry Gas 3,235,620 boe 50.4%
TOTAL 6,424,163 boe 100%
* Total production for the first half of 2012 (H1 2012) increased
by 265% to 6,424,163 boe from 1,758,234 boe in H1 2011;
* Well # 218, while it has shown some variable flow rates
initially, is starting to show an encouraging stabilisation, after
monitoring took place over the last 8 weeks. Further condensate wells
will be added to the GTF in order to achieve the targeted exit rate
should the flow rates of Well # 218 not prove sufficient in the future;
* An annual maintenance shutdown of the GTF is scheduled for 14
days in the early part of October 2012;
* At the end of June 2012, a total of 13 crude oil wells and 10 gas
condensate wells were been in production, whereas 4 more wells were
being drilled and 3 wells were under test/work-over operations.
Drilling Operations
* During H1 2012, 6 wells have been drilled and completed: 2
gas-condensate wells and 4 crude oil wells:
o 5 wells (2 gas-condensate wells (# 401 and # 218) and 3 crude oil
wells (# 24b, # 116 and # 67) are currently in production;
o 1 crude oil well is currently in test operations (# 45 with
commercial inflow of crude oil from the Bashkirian Reservoir);
* Currently 4 more gas-condensate wells are being drilled and will
be completed by year-end. 2 more wells are expected to be drilled and
completed by year-end, 1 gas-condensate well and 1 appraisal well for
crude oil;
* A contract for a fifth drilling rig has been awarded and will
start drilling operations in the course of Q4 2012 in order to increase
the flexibility of the overall drilling programme.
Gas Treatment Facility - Phase II Update
* Front-end engineering has been completed;
* Adjustments to the FEED (Front-End Engineering and Design) have
been initiated on the basis of lessons learned from the current GTF
operations and will be completed towards the end of September 2012;
* Basic design of Phase II has been approved by the local
authorities;
* Procurement of long lead items for Phase II of the GTF is
currently on-going;
* A final go-ahead decision on Phase II of the GTF is expected
towards the end of 2012.
Acquisitions
* On 17 August 2012, Zhaikmunai LLP signed Asset Purchase
Agreements to acquire 100% of the subsoil use rights related to three
new oil & gas fields in Kazakhstan, namely Rostoshinskoye, Darjinskoye
and Yujno-Gremyachenskoe, located in the Pre-Caspian basin to the
northwest of Uralsk, approximately 90 kilometres from the Chinarevskoye
field;
* Completion of the acquisitions is subject to the approval of the
relevant authorities in Kazakhstan, including the Ministry of Oil & Gas
and the Anti-Monopoly Agency;
* The size of the three licence areas combined is 139 square
kilometres and Zhaikmunai agreed to pay the current owners a total of
USD 16 million for the three fields;
* Zhaikmunai is currently analysing the optimal appraisal and
development programme for the fields and will hold a Capital Markets
Day in the Fall 2012 to present the results.
FINANCIAL RESULTS
Revenue and EBITDA
Record revenue from sales of hydrocarbons stood at USD 323.4 million,
an increase of 156.9%, (or USD 197.5 million) in comparison to last
year's first half (USD 125.9 million). The increase in GTF output over
the period in conjunction with the high oil price environment has
contributed to the outstanding first half 2012 revenue.
EBITDA(1) stood at USD 212.8 million, an increase of 187.8% (or
USD138.8 million) in comparison to last year's first half (USD 73.9
million). EBITDA margin for H1 2012 of 65.8% compared favourably with
that of 58.7% for H1 2011. The expansion of the EBITDA margin was
driven, among others, by the increase of sales of stabilised condensate
in the product mix and Zhaikmunai's large fixed cost basis.
(1) H1 2012 EBITDA includes an adjustment of USD11.2 million linked
to one-off social programme expenses related to road construction works.
Note:
In accordance with IFRS, sales from GTF test production were not
included in the Zhaikmunai's 2011 revenue but were offset against
capital expenditure. H1 2011 cumulative sales of GTF test production
(stabilised condensate, LPG and dry gas), amounting to USD 11.6 million
(H1 2012: nil) hence did not feature in the revenue and EBITDA figures
reported at the time.
Net Income
Net income for the period increased 140.6% to USD 86.6 million in H1
2012 from USD 36.0 million for the same period in 2011. Net income as a
percentage of total sales declined slightly to 26.8% from 28.6% as
compared to the same period last year. The decline in margins was
driven by the lack of capitalized interest and increased depreciation
linked to the completion of GTF.
Cash
Zhaikmunai ended the first half of 2012 with USD 162.8 million of cash,
of which USD 159.3 qualified as cash and cash equivalents and USD 3.4
million was restricted cash. As a result of the refinancing of its
senior debt through the issuance of a bond in October 2010, Zhaikmunai
no longer has any obligation to retain any of its cash in a debt
service reserve account.
Cost of Sales and General and Administrative Expenses
Cost of sales increased by USD 66.6million or 234.4% to
USD 95.0million compared to USD 28.4million for the same period in 2011
mainly due to the increased depreciation charge linked with the
completion of the GTF and Zhaikmunai taking over in full the management
and operations of the GTF from its supplier.
General and administrative expenses increased by USD 12.8 million or
81.9% to USD 28.5 million compared to USD 15.6 million for the same
period in 2011. This is in large part due to increased one-off
expenditures in the social programme related to the construction of the
37 kilometre asphalt road leading to the field site (USD 11.2 million).
Capital Expenditure
In H1 2012, Zhaikmunai's net cash used in investing activities grew to
USD 99.9 million, from USD 39.1 million in H1 2011. This increase was
driven primarily by residual payments linked to GTF completion as well
as increased drilling.
Kai-Uwe Kessel, Chief Executive Officer of Zhaikmunai commented:"The
acceleration in production over the second quarter further
consolidates the transformation of the Chinarovskoye field from an
exploration asset into a significant production asset. The positive
impact on Zhaikmunai's financials not only brings further momentum to
the second phase of the GTF and its associated drilling programme but
also opens the door for preparation work on a premium share listing as
well as acquisitions of additional prospective license areas to further
improve and strengthen Zhaikmunai's reserve base."
CONFERENCE CALL
Zhaikmunai's management team will be available for a Q&A session for
analysts and investors on Wednesday, 29 August at 14:00 UK time (BST or
GMT + 1:00).
If you would like to participate in this call, please register by email
using the following email address: investor_relations@zhaikmunai.com .
Please provide your ID details (name, title, company, email address and
telephone number) in order to receive dial-in details.
Further information
For further information please visitwww.zhaikmunai.com
Download the H1 2012 Consolidated Financial Statements
http://www.rns-pdf.londonstockexchange.com/rns/9637K_1-2012-8-29.pdf
Download the H1 2012 Management Report
http://www.rns-pdf.londonstockexchange.com/rns/9637K_2-2012-8-29.pdf
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.
This information is provided by RNS
The company news service from the London Stock Exchange
END
Contact Information:
Contacts:
RNS
Customer
Services
0044-207797-4400
http://www.rns.com