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Q3 2012 EARNINGS CALL – Novatek

Novatek · Nov 13, 2012 · 40 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. Q3 2012 EARNINGS CALL – Novatek – slide 1
    Third Quarter 2012 Operational and Financial Results Conference Call Mark A. Gyetvay, Chief Financial Officer and Member of the Board of Directors Moscow, Russian Federation 13 November 2012
  2. Q3 2012 EARNINGS CALL – Novatek – slide 2
    Summary Highlights 3Q 2012 Increase in revenues driven by higher natural gas and liquids sales prices and volumes: Natural gas sales increased Y-o-Y by 33.4% and Q-o-Q by 17.3% Liquids sales increased Y-o-Y by 28.9% and Q-o-Q by…
  3. Q3 2012 EARNINGS CALL – Novatek – slide 3
    Acquisition of a 49% Stake in Nortgas 4
  4. Q3 2012 EARNINGS CALL – Novatek – slide 4
    Transaction Summary NOVATEK concluded an agreement to acquire a 49% equity stake in ZAO Nortgas from R.E.D.I. HOLDINGS for USD1,375 million (the remaining 51% is indirectly held by Gazprom) Nortgas holds the hydrocarbon production…
  5. Q3 2012 EARNINGS CALL – Novatek – slide 5
    Severo-Urengoyskoye Field Highlights The Severo-Urengoyskoye field is located 25 Nortgas field km south of NOVATEKs Yurkharovskoye field NOVATEK fields NOVATEKs Total PRMS proved reserves as of NOVATEK gas Yamal peninsula…
  6. Q3 2012 EARNINGS CALL – Novatek – slide 6
    Effect on Reserves and Production Acquisition effect on A 49% share in current Nortgas production total PRMS proved reserves(1) equals to 3.6% of current gas production 1,695 131 12,166 and 5.0% of liquids production by NOVATEK 7%…
  7. Q3 2012 EARNINGS CALL – Novatek – slide 7
    Acquisition Rationale Value accretive Acquire proved PRMS reserves at 1.66 per boe as compared to 1.3 per boe paid for Sibneftegas reserves in 2010 While almost all of Sibneftegas reserves are dry natural gas, about 13% of Nortgas…
  8. Q3 2012 EARNINGS CALL – Novatek – slide 8
    Operational Overview 9
  9. Q3 2012 EARNINGS CALL – Novatek – slide 9
    Hydrocarbon Production Natural Gas Production, mmcm Liquids Production, mt 13,849 13,279 SeverEnergia 13,079 SeverEnergia Sibneftegas Sibneftegas 924 Khanchey Sibneftegas 918 SeverEnergia 854 Khanchey Khanchey SeverEnergia…
  10. Q3 2012 EARNINGS CALL – Novatek – slide 10
    Purovsky Plant & Vitino Sea Port Terminal Total volumes delivered: 925 mt Yurkharovskoye field: 599 mt East-Tarkosalinskoye and Khancheyskoye fields: 248 mt Purchases from our joint venture: 73 mt Other: 5 mt Total plant output:…
  11. Q3 2012 EARNINGS CALL – Novatek – slide 11
    Stable Gas Condensate in Transit Yosu Singapore Goods in transit Goods in transit Goods in transit 30.09.2011 30.06.2012 30.09.2012 181 thousand tons 120 thousand tons 122 thousand tons 60 mt 60 mt 60 mt 60 mt 61 mt 61…
  12. Q3 2012 EARNINGS CALL – Novatek – slide 12
    Financial Overview 3Q 12 vs. 3Q 11 13
  13. Q3 2012 EARNINGS CALL – Novatek – slide 13
    Comparison of Quarterly Results (RR million) Q-o-Q Y-o-Y 3Q 11 4Q 11 1Q 12 2Q 12 3Q 12 +/- % +/- % Oil and gas sales 39,888 50,544 54,152 44,984 52,562 16.8% 31.8% Total revenues 40,033 50,718 54,373 45,145 52,731 16.8% 31.7%…
  14. Q3 2012 EARNINGS CALL – Novatek – slide 14
    Market Distribution Gas Sales Volumes (mmcm) 15,579 16,050 13,447 13,507 12,266 8,823 56.6% 75.8% 12,172 8,361 62.2% 8,719 64.6% 6,966 56.8% 43.4% 6,756 5,300 43.2% 24.2% 5,086 37.8% 4,788 35.4% 3,878 3Q 11 4Q 11…
  15. Q3 2012 EARNINGS CALL – Novatek – slide 15
    Natural Gas Sales Volume Mix 100% 75% 51% 55% 57% 57% 58% 62% 65% 75% 76% 50% 25% 49% 45% 43% 43% 42% 38% 35% 25% 24% 0% 3Q 10 4Q 10 1Q 11 2Q 11 3Q 11 4Q 11 1Q 12 2Q 12 3Q 12 Ex-field End-customers 16
  16. Q3 2012 EARNINGS CALL – Novatek – slide 16
    Market Distribution Liquids Sales Volumes (mt) 1,148 1,121 1,065 933 948 85.5% 83.7% 982 938 82.4% 878 81.6% 794 85.1% 774 0 0 0 0 0 139 14.9% 166 14.5% 174 18.4% 183 16.3% 187 17.6% 3Q 11 4Q 11 1Q 12 2Q 12 3Q…
  17. Q3 2012 EARNINGS CALL – Novatek – slide 17
    Total Revenues (RR million) Increase due to: Change due to price 8.0% increase in average realized SGC Change due to volume net export price primarily due to a decrease in export duties; 9.9% increase in export sales volumes…
  18. Q3 2012 EARNINGS CALL – Novatek – slide 18
    Total Revenues Breakdown 3Q 11 9% 2% 1% Natural gas 24% Stable gas condensate 64% LPG 3Q 12 Crude oil 3% 7% 25% Oil and gas products Other 65% 19
  19. Q3 2012 EARNINGS CALL – Novatek – slide 19
    Realized Hydrocarbon Prices (net of VAT and export duties) 3Q 11 3Q 12 +/(-) +/(-)% 2Q 12 3Q 12 +/(-) +/(-)% Domestic prices 2,637 3,050 413 15.7% Natural gas end-customers, RR/mcm 2,652 3,050 398 15.0% 1,390 1,619 229 16.5%…
  20. Q3 2012 EARNINGS CALL – Novatek – slide 20
    Operating Expenses (RR million and % of Total Revenues (TR)) 3Q 11 % of TR 3Q 12 % of TR 2Q 12 % of TR 3Q 12 % of TR 11,795 29.5% 14,235 27.0% Transportation expenses 13,035 28.9% 14,235 27.0% 4,443 11.1% 4,120 7.8% Taxes other than…
  21. Q3 2012 EARNINGS CALL – Novatek – slide 21
    Transportation Expenses (RR million) Change due to tariffs/distance Change due to volume Tariff/Dist. = 86 Volumes = 154 Tanker = 152 14,235 759 Export 73 (49) 11,795 Tariff/Dist. = 113 Other includes: Volumes = (2)…
  22. Q3 2012 EARNINGS CALL – Novatek – slide 22
    Taxes Other Than Income Tax Expense (RR million) Change due to tax rate Change due to production 44 (622) 165 4,443 (42) 4,120 (81) (6) (59) (4) 282 3Q 11 Natural Gas Crude Property Excise and fuel Other 3Q 12 gas…
  23. Q3 2012 EARNINGS CALL – Novatek – slide 23
    Materials, Services and Other Expenses (RR million) Increase due to on-going repair works at our wholly owned subsidiaries 25 15 5 7 1,716 96 1,572 (1) (3) Increase due to: a 6.0% indexation of base salaries effective 1 July…
  24. Q3 2012 EARNINGS CALL – Novatek – slide 24
    General and Administrative Expenses (RR million) Decrease due to termination of direct payments to the YNAO government to undertake social programs related to the Yamal LNG project 711 14 15 45 2,245 35 37 (372) 1,760…
  25. Q3 2012 EARNINGS CALL – Novatek – slide 25
    Profit Attributable to NOVATEK Shareholders (RR million) 534 8,235 12,698 20,003 (3,011) (172) (4,807) 323 321 (2,440) 8,322 3Q 11 Total OPEX Transport Taxes other Other Finance Share of Income tax Non-controlling 3Q…
  26. Q3 2012 EARNINGS CALL – Novatek – slide 26
    Financial Overview 3Q 12 vs. 2Q 12 27
  27. Q3 2012 EARNINGS CALL – Novatek – slide 27
    Total Revenues (RR million) Increase due to: Change due to price 27.5% increase in average realized SGC net Change due to volume export price offset by 7.9% decrease in export sales volumes 3,062 198 206 52,731 4,920 (391) 224…
  28. Q3 2012 EARNINGS CALL – Novatek – slide 28
    Total Revenues Breakdown 2Q 12 2% 9% Natural gas 24% Stable gas condensate 65% LPG 3Q 12 3% 7% Crude oil 25% Oil and gas products Other 65% 29
  29. Q3 2012 EARNINGS CALL – Novatek – slide 29
    Transportation Expenses (RR million) Change due to tariffs/distance Change due to volume Tariff/Dist. = (16) Volumes = (116) Tanker = (212) 1,249 14,235 13,035 25 (15) Export 373 Tariff/Dist. = (18) Volumes = (29) Domestic…
  30. Q3 2012 EARNINGS CALL – Novatek – slide 30
    Taxes Other Than Income Tax Expense (RR million) Change due to tax rate Change due to production 4,375 (213) 10 4,120 (41) (7) (4) 2Q 12 Natural Gas condensate Property Excise and fuel Other 3Q 12 gas tax taxes UPT…
  31. Q3 2012 EARNINGS CALL – Novatek – slide 31
    Materials, Services and Other Expenses (RR million) 1,836 5 38 1,716 55 9 (197) (23) (7) Decrease due to significant bonuses accrued in 2Q12 for the results achieved in 2011 2Q 12 Employee Repair and Electricity and…
  32. Q3 2012 EARNINGS CALL – Novatek – slide 32
    General and Administrative Expenses (RR million) Decrease due to: significant bonuses accrued in 2Q 2012 to key management for 2,594 the results achieved in 2011; lower social contributions to non-budget funds due to maximum…
  33. Q3 2012 EARNINGS CALL – Novatek – slide 33
    Profit Attributable to NOVATEK Shareholders (RR million) 7,942 220 1 20,003 (2,719) 7,586 255 375 (2,120) (1,200) 9,663 2Q 12 Total OPEX Transport Taxes other Other Finance Share of Income tax Non-controlling 3Q 12…
  34. Q3 2012 EARNINGS CALL – Novatek – slide 34
    Appendices 35
  35. Q3 2012 EARNINGS CALL – Novatek – slide 35
    Maintaining Margins (% of total revenues) Due to the disposal of a 20% participation interest in OAO Yamal LNG 170.9% 154.2% 47.2% 44.5% 45.2% 47.9% 46.8 % (2) 39.1% 37.9% 30.1% (2) 20.8% 21.4% 3Q 11 4Q 11 1Q 12 2Q 12…
  36. Q3 2012 EARNINGS CALL – Novatek – slide 36
    Increasing Natural Gas Production (mmcm per day) 160 140 120 100 80 60 40 20 0 Nov Nov Nov Dec Dec Dec Mar Mar Mar May May May Feb Feb Feb Jun Jun Jun Oct…
  37. Q3 2012 EARNINGS CALL – Novatek – slide 37
    Condensed Balance Sheet (RR million) 30 September 2012 31 December 2011 +/(-) +/(-)% Total current assets 48,702 58,316 (9,614) -16.5% Incl. Cash and cash equivalents 17,472 23,831 (6,359) -26.7% Total non-current assets 350,521…
  38. Q3 2012 EARNINGS CALL – Novatek – slide 38
    Internally Funded Investment Program 30,000 5.0 22,500 4.0 Operating CF / CAPEX 15,000 3.0 RR millions 7,500 2.0 - 1.0 (7,500) 0.0 (15,000) (1.0) 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 2009 2009 2010 2010 2010…
  39. Q3 2012 EARNINGS CALL – Novatek – slide 39
    Total Debt Maturity Profile (RR million) In October 2012, the Group 18,938 19,966 repaid the final tranche of loan 17,449 18,465 from ZAO UniCredit Bank aggregating USD 20 million as 9,841 scheduled In October 2012, the Group…
  40. Q3 2012 EARNINGS CALL – Novatek – slide 40
    Questions and Answers 41

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