ISLE OF MAN--(Marketwire - Aug 30, 2011) -
Monday, 29 August 2011
Zhaikmunai L.P.
(the "Partnership")
H1 2011: RECORD REVENUE AND OUTSTANDING EBITDA
Zhaikmunai LP (LSE : ZKM ), the oil and gas exploration and production
enterprise based in north-western Kazakhstan, today provides a
financial and operational review for the period from 1 January to 30
June 2011, as well as an update on its Gas Treatment Facility (GTF).
FIRST HALF 2011 SUMMARY
All figures in US$ millions unless otherwise stated
H1 2011 H1 2010 Change YoY
Revenue from oil sales 125.907 74.654 51.253 +68.7%
EBITDA 73.927 43.748 30.179 +70.0%
Net income 36.011 19.577 16.434 +83.9%
Production (boepd) 9,714 7,261 2.453 +33.8%
Debt 450.000 381.677 68.323 +17.9%
Cash 139.134 95.670 43.4 +45.4%
Average realised oil price 109.77 77.85 31.92 +41.0%
(US$ per bbl)
Discount (US$ per bbl) 15.65 14.26 1.39 +9.7%
Weighted average netback 94.12 63.59 30.53 +48.0%
(US$ per bbl)
Zhaikmunai realised very strong first half 2011 results, despite some
delay in the full GTF commissioning. All financial and operational
indicators show a significant improvement in relation to first half
2010 results. Start of the GTF test production triggered a hydrocarbons
production growth of over 33% over the period. In addition, revenues,
EBIDTA and net income grew by almost 69%, 70% and 84%, respectively.
Full ramp up of the GTF is expected to take place by the end of
September, thereby consolidating these exceptional results into the
second half of 2011.
KEY HIGHLIGHTS
* Production: H1 average daily production of crude oil and GTF test
production of stabilised condensate, LPG and dry gas amounted to 9,714
boe/day.
* Revenue: Record H1 2011 revenue increased by 68,7% to US$125.907
compared to H1 2010.
* Test production (start: May 2011): H1 cumulative sales of GTF
test production (stabilised condensate, LPG and dry gas) amounted to
US$11.6 million (H1 2010: nil). (Note: In accordance with IFRS, sales
from GTF test production are not included in the Company's revenue but
are offset against expenditure.)
* EBITDA: H1 2011 EBITDA increased by 70.0% to US$73.927 compared
to H1 2010.
FINANCIAL HIGHLIGHTS
Revenue and EBITDA
Record revenue from oil sales stood at US$125.907 million, an increase
of 68.7% or US$51.253 million in comparison to last year's first half
(US$74.654 million). The continuing high oil price environment has
contributed to this outstanding first half 2011 revenue. Zhaikmunai
realized considerably higher netback prices as Brent prices have been
well above US$100 per barrel during the first half of 2011.
Zhaikmunai's discount, on the other hand, increased by US$1.39 per
barrel to US$15.65 per barrel, as a result of increases in rail
tariffs, primarily in Russia.
EBITDA stood at US$73.927 million, an increase of 70.0% or US$30.179
million in comparison to last year's first half (US$43.748 million).
Note:
In accordance with IFRS, sales from GTF test production are not
included in the Company's revenue but are offset against expenditure.
H1 2011 cumulative sales of GTF test production (stabilised condensate,
LPG and dry gas), amounting to US$11.6 million (H1 2010: nil) hence do
not feature in the revenue and EBITDA figures reported.
Net income
Net income for the period increased 83.9% to US$36.0 million from US$
19.6 million for the same period in 2010. Net income as a percentage of
crude oil sales improved slightly to 28.6% as compared to 26.2% for the
same period last year.
Cash
Zhaikmunai ended the first half of 2011 with US$139.2 million of cash,
of which US$136.2 qualified as cash and cash equivalents and US$3.0
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 US$7.7million, or 37.0%, to US$28.4million
compared to US$20.7million for the same period in 2010. General and
administrative expenses increased by US$2.0 million or 14.4% to US$15.6
million compared to US$13.7 million for the same period in 2010.
Hedging
On March 29, 2011 the Partnership entered into a 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.
OPERATIONAL HIGHLIGHTS
Production
* H1 average daily production of crude oil and GTF test production
of stabilised condensate, LPG and dry gas amounted to 9,714 boe/day;
* Q2 average daily production of crude oil and GTF test production
of stabilised condensate, LPG and dry gas amounted to 12,673 boe/day
representing an 88% increase over the Q1 average daily production
(6,722 boe/day);
* The Oil Treatment Facility (OTF) treated H1 production
originating from 11 oil wells and the Gas Treatment Facility (GTF)
treated H1 production originating from 2 gas condensate wells.
Facilities
Completing the commissioning of the GTF constituted the single largest
project for Zhaikmunai in the course of the first half of 2011. Over
and above work on the GTF, Zhaikmunai also completed the Reservoir
Pressure Maintenance System and pursued work on ancillary projects,
such as the rail terminal, the infield roads and the campsite.
PSA 9TH SUPPLEMENTARY AGREEMENT SIGNED
On 12 August 2011 Zhaikmunai and the Republic of Kazakhstan Ministry of
Oil and Gas signed the 9th Supplementary Agreement to Zhaikmunai's
Production Sharing Agreement for the Chinarevskoye Field. The 9th
Supplementary Agreement clarifies certain contractual matters in the
PSA and sets out the parties' agreement regarding the scope and
schedule of Zhaikmunai's obligations to finance the training of Kazakh
nationals and certain other Zhaikmunai social obligations arising under
the PSA.
GAS TREATMENT FACILITY (GTF) UPDATE
* Commissioning of the GTF has continued since Zhaikmunai's last
financial and operational update of 27 June 2011.
* Test production of GTF products, i.e. stabilised condensate, LPG
(Liquid Petroleum Gas) and dry gas has continued and these products are
being sold to export and domestic offtakers.
* The commissioning of the amine unit has started thereby allowing
Zhaikmunai to treat acid gas through train 1 of the GTF.
* Ramp-up production flows are currently being monitored and
fine-tuned.
* Management expects to have full GTF - train 1 and train 2 -
commissioned by the end of September 2011.
Commenting on the first half-year results, Kai-Uwe Kessel, CEO, said:
"Outstanding H1 revenue and EBIDTA have been made possible thanks to
sustained strong Q2 results and the high oil price environment. This
has further contributed to significant cash reserves. The signing of
the 9th Supplementary Agreement to our PSA demonstrates Zhaikmunai's
good working relationship with the government authorities in
Kazakhstan. And the start of production of stabilised condensate, LPG
and dry gas in May 2011 for the first time in the company's history
marked a major milestone. Zhaikmunai's steady progress toward full
ramp up of the GTF, including the amine tower, is most encouraging. We
are looking forward to complete the full commissioning of both trains
of the GTF by the end of September 2011."
CONFERENCE CALL
Zhaikmunai's management team will be available for a Q&A session for
analysts and investors on Wednesday, 31 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 this press release's pdf file
http://www.rns-pdf.londonstockexchange.com/rns/1759N_3-2011-8-29.pdf
Download the H1 2011 Consolidated Financial Statements
http://www.rns-pdf.londonstockexchange.com/rns/1759N_1-2011-8-29.pdf
Download the H1 2011 Management Report
http://www.rns-pdf.londonstockexchange.com/rns/1759N_2-2011-8-29.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
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