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Q4 2014 EARNINGS CALL – Novatek

Novatek · Mar 2, 2015 · 46 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. Q4 2014 EARNINGS CALL – Novatek – slide 1
    Fourth Quarter and Full Year 2014 Operational and Financial Results Conference Call Mark A. Gyetvay, Deputy Chairman of the Management Board Moscow, Russian Federation 2 March 2015
  2. Q4 2014 EARNINGS CALL – Novatek – slide 2
    Summary Highlights 2014 Successfully replaced 109% of 2014 total production(1) Total proved reserves increased to 12.6 bln boe(1) Organic reserve replacement rate 152%(1) Average reserve replacement cost for 2012-2014 2.37 per…
  3. Q4 2014 EARNINGS CALL – Novatek – slide 3
    Summary Highlights 2014 Increase in revenues driven by higher natural gas prices and natural gas and liquids volumes: Natural gas sales increased by 12.4% Liquids sales increased by 35.3% EBITDA (excluding net gain (loss) on…
  4. Q4 2014 EARNINGS CALL – Novatek – slide 4
    Operational Overview 5
  5. Q4 2014 EARNINGS CALL – Novatek – slide 5
    Proved Reserves Base at Year-End R/P = 28 yrs. 16,000 R/P = 29 yrs. R/P = 31 yrs. 1,200 14,000 Proved reserves (MMBOE) 12,394 12,537 12,578 Production (MBOE/day) 12,000 1,000 10,000 800 7,788 8,082 7,438 8,000 600…
  6. Q4 2014 EARNINGS CALL – Novatek – slide 6
    Net Hydrocarbon Production Natural Gas Production, mmcm Liquids Production, mt 61,216 62,129 4,869 Joint ventures Joint ventures Khanchey Khanchey 3,997 Joint ventures Joint ventures Khanchey Khanchey Yurkharov Yurkharov…
  7. Q4 2014 EARNINGS CALL – Novatek – slide 7
    Purovsky Plant Total volumes delivered: 6,598 mt Yurkharovskoye field: 2,485 mt East-Tarkosalinskoye and Khancheyskoye fields: 828 mt Other fields: 105 mt Purchases from our joint ventures: 3,180 mt Total output of…
  8. Q4 2014 EARNINGS CALL – Novatek – slide 8
    Ust-Luga Complex Total volumes delivered: 4,690 mt Total output of marketable gas condensate refined products: 4,604 mt Naphtha: 3,431 mt Other products: 1,173 mt 4,338 mt of gas condensate refined products were dispatched to the…
  9. Q4 2014 EARNINGS CALL – Novatek – slide 9
    Liquids in Transit Liquids sales Naphtha Jet fuel Gasoil and fuel oil LPG Crude oil Stable gas condensate Goods in transit Goods in transit Goods in transit 31.12.2013 30.09.2014 31.12.2014 177 thousand tons 65 thousand tons…
  10. Q4 2014 EARNINGS CALL – Novatek – slide 10
    Financial Overview 2014 vs. 2013 11
  11. Q4 2014 EARNINGS CALL – Novatek – slide 11
    Summary Financial Results (RR billion) 357.6 355.7 298.2 297.5 20.0% 211.0 210.2 19.6% 159.6 129.4 95.2 79.8 69.5 23.4% 35.2 (55.9%) 2012 2013 2014 Total revenues Oil & gas sales Normalized EBITDA Normalized…
  12. Q4 2014 EARNINGS CALL – Novatek – slide 12
    Another Record Year (RR million) 2014 2013 +/(-) +/(-)% Oil and gas sales 355,673 297,499 58,174 19.6% Total revenues 357,643 298,158 59,485 20.0% Operating expenses (236,512) (192,761) (43,751) 22.7% (1 ) EBITDA 162,254 167,019…
  13. Q4 2014 EARNINGS CALL – Novatek – slide 13
    Total Revenues (RR million) Change due to price Change due to volume Increase due to a significant increase in sales volumes as a result of the From July 2013, most of our stable gas commencement of gas condensate condensate was…
  14. Q4 2014 EARNINGS CALL – Novatek – slide 14
    Market Distribution Sales Volumes Natural gas sales volumes, mmcm Liquids sales volumes, mt 67,231 64,152 7,089 5,438 5,287 74.6% 57,021 88.9% 63,281 94.1% 4,386 80.7% 0 0 1,802 25.4% 7,131 11.1% 5.9% 1,052 19.3%…
  15. Q4 2014 EARNINGS CALL – Novatek – slide 15
    Total Revenues Breakdown 2014 1% 4% 7% Natural gas 24% Gas condensate refined products 64% LPG 2013 11% 3% 6% Stable gas condensate 11% Other 69% 16
  16. Q4 2014 EARNINGS CALL – Novatek – slide 16
    Realized Hydrocarbon Prices (net of VAT and export duties) 2014 2013 +/(-) +/(-)% Domestic prices Natural gas end-customers, RR/mcm 3,527 3,366 161 4.8% Natural gas ex-field, RR/mcm 1,833 1,830 3 0.2% Stable gas condensate, RR/ton…
  17. Q4 2014 EARNINGS CALL – Novatek – slide 17
    Operating Expenses (RR million and % of Total Revenues (TR)) 2014 % of TR 2013 % of TR Transportation expenses 114,511 32.0% 103,245 34.6% Taxes other than income tax 29,336 8.2% 21,645 7.3% Non-controllable expenses 143,847 40.2%…
  18. Q4 2014 EARNINGS CALL – Novatek – slide 18
    Transportation Expenses (RR million) Change due to tariffs/distance Change due to volume (389) (726) (56) 114,511 (599) 1,036 394 (3) 103,245 2,400 Other includes: 9,209 Unallocated rail services; Liquids motor…
  19. Q4 2014 EARNINGS CALL – Novatek – slide 19
    Taxes Other Than Income Tax Expense (RR million) 7,343 305 43 29,336 21,645 2013 UPT Property Other taxes 2014 tax Y-o-Y increase in UPT expense was primarily due to a significant increase in the natural gas production tax…
  20. Q4 2014 EARNINGS CALL – Novatek – slide 20
    General and Administrative Expenses (RR million) Increase primarily due to consulting services related to research works on production methods and construction of Decrease primarily due to potential production facilities in the Yamal…
  21. Q4 2014 EARNINGS CALL – Novatek – slide 21
    Materials, Services and Other Expenses (RR million) Increase due to the commencement of LPG rail deliveries from the Tobolsk station from 2Q 14 utilizing rented rail cars 327 11,442 586 646 207 271 181 942 Increase due to the…
  22. Q4 2014 EARNINGS CALL – Novatek – slide 22
    Condensed Statement of Financial Position (RR million) 31 December 2014 31 December 2013 +/(-) +/(-)% Total current assets 126,591 82,426 44,165 53.6% Incl. Cash and cash equivalents 41,318 7,889 33,429 423.7% Total non-current assets…
  23. Q4 2014 EARNINGS CALL – Novatek – slide 23
    Total Debt Maturity Profile (RR million) 92,468 The Group has available funds: ZAO UniCredit Bank 59,534 USD 180 mln until August 2015 Credit Agricole Corporate and 40,980 Investment Bank USD 100 mln 39,783 until April 2015…
  24. Q4 2014 EARNINGS CALL – Novatek – slide 24
    Debt Structure Debt structure and maturities Total debt evolution, RR million RR million 2014 2013 86,857 245,679 Short-term debt 40,980 24,026 165,621 (6,799) Including current portion of 39,361 9,911 long-term debt 201 3…
  25. Q4 2014 EARNINGS CALL – Novatek – slide 25
    Financial Overview 4Q 14 vs. 3Q 14 26
  26. Q4 2014 EARNINGS CALL – Novatek – slide 26
    Comparison of Quarterly Results (RR million) 4Q 13 1Q 14 2Q 14 3Q 14 4Q 14 Q-o-Q +/- % Y-o-Y +/- % Oil and gas sales 83,592 88,533 87,881 84,090 95,169 13.2% 13.8% Total revenues 83,915 88,676 88,370 84,733 95,864 13.1% 14.2%…
  27. Q4 2014 EARNINGS CALL – Novatek – slide 27
    Market Distribution Gas Sales Volumes (mmcm) 18,987 17,772 16,382 15,528 14,944 17,893 14,453 16,677 94.0% 88.2% 93.8% 14,604 14,107 94.4 94.2% % 1,929 11.8% 1,095 6.2% 924 6.0% 837 5.6% 1,094 5.8% 4Q 13 1Q 14 2Q 14 3Q…
  28. Q4 2014 EARNINGS CALL – Novatek – slide 28
    Natural Gas Sales Volume Mix 100% 75% 73% 89% 89% 90% 88% 94% 94% 94% 94% 50% 25% 27% 11% 11% 10% 12% 6% 6% 6% 6% 0% 4Q 12 1Q 13 2Q 13 3Q 13 4Q 13 1Q 14 2Q 14 3Q 14 4Q 14 Ex-field End-customers 29
  29. Q4 2014 EARNINGS CALL – Novatek – slide 29
    Market Distribution Liquids Sales Volumes (mt) 2,160 1,687 1,697 1,545 1,411 1,550 71.8% 1,302 1,251 73.7% 77.2% 1,184 76.6% 1,137 80.6% 0 0 0 0 0 610 28.2% 361 23.4% 385 22.8% 446 26.3% 274 19.4% 4Q 13 1Q 14 2Q 14…
  30. Q4 2014 EARNINGS CALL – Novatek – slide 30
    Total Revenues (RR million) Decrease due to: Change due to price a decrease in the underlying commodity prices of Change due to volume the respective products on the international markets used in the price calculation; offset by an…
  31. Q4 2014 EARNINGS CALL – Novatek – slide 31
    Total Revenues Breakdown 4Q 14 2% 4% 7% Natural gas 19% Gas condensate refined products 68% LPG 3Q 14 4% 8% 1% Stable gas condensate 25% Other 62% 32
  32. Q4 2014 EARNINGS CALL – Novatek – slide 32
    Realized Hydrocarbon Prices (net of VAT and export duties) 4Q 13 4Q 14 +/(-) +/(-)% 3Q 14 4Q 14 +/(-) +/(-)% Domestic prices 3,610 3,536 (74) -2.0% Natural gas end-customers, RR/mcm 3,620 3,536 (84) -2.3% 2,063 1,831 (232) -11.2%…
  33. Q4 2014 EARNINGS CALL – Novatek – slide 33
    Operating Expenses (RR million and % of Total Revenues (TR)) 4Q 13 % of TR 4Q 14 % of TR 3Q 14 % of TR 4Q 14 % of TR 26,092 31.1% 33,516 35.0% Transportation expenses 26,643 31.4% 33,516 35.0% 6,534 7.8% 7,277 7.6% Taxes other than…
  34. Q4 2014 EARNINGS CALL – Novatek – slide 34
    Transportation Expenses (RR million) Change due to tariffs/distance Change due to volume (82) 170 33,516 (569) 298 25 9 1,202 Other includes: Unallocated rail 26,643 services; 5,820 Liquids motor transportation; Insurance;…
  35. Q4 2014 EARNINGS CALL – Novatek – slide 35
    Taxes Other Than Income Tax Expense (RR million) 7,198 119 22 7,277 (62) 3Q 14 UPT Property Other taxes 4Q 14 tax The increase in property tax expense was due to additions to property, plant and equipment at our production…
  36. Q4 2014 EARNINGS CALL – Novatek – slide 36
    General and Administrative Expenses (RR million) 121 65 27 40 38 3,521 826 (43) (96) Increase due to bonuses 2,543 accrued to key management for the results achieved in 2014 3Q 14 Employee Legal, audit & Social expenses &…
  37. Q4 2014 EARNINGS CALL – Novatek – slide 37
    Materials, Services and Other Expenses (RR million) 14 111 60 3,179 3,014 10 26 (48) (8) Increase in materials used in the technological process at East-Tarko 3Q 14 Employee Repair & Materials & Electricity & fuel Preparation,…
  38. Q4 2014 EARNINGS CALL – Novatek – slide 38
    Questions and Answers 39
  39. Q4 2014 EARNINGS CALL – Novatek – slide 39
    Appendices 40
  40. Q4 2014 EARNINGS CALL – Novatek – slide 40
    Profit Attributable to NOVATEK Shareholders (RR million) In 2014, the Group recorded a gain on the disposal of interests in joint venture Artic Russia 59,485 B.V. in the amount of RR 2,623 million as compared to a gain on the…
  41. Q4 2014 EARNINGS CALL – Novatek – slide 41
    Maintaining Margins (% of total revenues) Disposal of a 51% equity stake in OAO Sibneftegas under the assets swap agreement and 20% equity stake in Disposal of a 20% equity Due to the recognition of a OAO Yamal LNG stake in Artic…
  42. Q4 2014 EARNINGS CALL – Novatek – slide 42
    Increasing Natural Gas Production (mmcm per day) Nov Nov Nov Nov Jan Jan Jan Jan Mar Mar Mar Oct Oct Oct Mar Oct May May May May Apr Apr Apr Apr Jul Sep Jul…
  43. Q4 2014 EARNINGS CALL – Novatek – slide 43
    Net Production Y-o-Y and 2013/2014 Quarterly Natural gas production, mmcm 62,129 61,216 9,531 9,002 Increase Y-o-Y and Q-o-Q production primarily due to an increase in net production of our joint ventures and an increase in the…
  44. Q4 2014 EARNINGS CALL – Novatek – slide 44
    Net Production Y-o-Y and 2013/2014 Quarterly Liquids production, mt 6,036 Increase Y-o-Y and Q-o-Q primarily due to an increase in net 1,696 production of our joint ventures (the launch of additional 4,751 production facilities…
  45. Q4 2014 EARNINGS CALL – Novatek – slide 45
    Change in Inventories 3,500 800 3,000 700 Natural gas volumes, mmcm 600 2,500 Liquids volumes, mt 500 2,000 400 1,500 300 1,000 200 500 100 0 0 01.01.14 31.03.14 30.06.14 30.09.14 31.12.14 Natural gas…
  46. Q4 2014 EARNINGS CALL – Novatek – slide 46
    Internally Funded Investment Program 40,000 5.0 30,000 4.0 Operating CF / CAPEX 20,000 3.0 RR millions 10,000 2.0 - 1.0 (10,000) 0.0 (20,000) (1.0) 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 2012 2012 2012 2012…

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