Final Results 2012 An important growth phase begins 9 April 2013
Part one Progress to date Year to 31 December 2012 Part two Looking to the future 2013/2014 2
Part one Progress to date Introduction - Paul Davies, Chief Executive Financial review - Cynthia Dubin, Finance Director Operations review - Paul Davies, Chief Executive 4
Part one Progress to date Introduction - Paul Davies, Chief Executive Financial review - Cynthia Dubin, Finance Director Operations review - Paul Davies, Chief Executive 5
Summary of 2012 A challenging period Russian project brought on-stream Reduced liquidity due to lower Russian production and retirement of short-term debt of 40m Ukrainian multi-stage frac contract awarded but 2H drilling programme…
Part one Progress to date Introduction - Paul Davies, Chief Executive Financial review - Cynthia Dubin, Finance Director Operations review - Paul Davies, Chief Executive 7
Financial summary 2012 Solid operating cash flow Revenue and profit from operations Key Financials down due to lower production in (m) Y2011 Y2012 Change Ukraine % Non-cash exceptional charges of Group revenue 236.9 202.9 (14.4)…
Group revenue Stable and strong realisations Group revenue declined by 14.4% to 202.9m Buoyant Ukrainian gas and LPG prices mitigated the effects of lower volumes Russian production commenced contributing to revenues Group revenue…
Profit from operations before exceptional items Impacted by production volumes Reduced volumes directly impacted sales which had the largest negative affect on profit from operations Reassessment of Ukrainian reserves in the prior year…
Exceptional items 45.8m of pre-tax non-cash charges One-off non-cash accelerated depreciation charge in Ukraine of 2012 30.7m m Following a reduction of Groups Ukraine oil and gas reserves at Novo- (30.7) Accelerated DD&A charge…
Capital expenditure A new phase begins Reduced capital expenditure from 162.0m to 67.3m following completion of construction phase in Russia Russian investment now focused on increasing production and expanding GPF capacity Field…
Movement in cash and cash equivalents Careful allocation of resources Continued to reap rewards of past investments with cash generated from operations of 109.3m Capex programme covered by cash from operations 40m repayment of Credit…
Part one Progress to date Introduction - Paul Davies, Chief Executive Financial review - Cynthia Dubin, Finance Director Operations review - Paul Davies, Chief Executive 14
Operational summary 2012 Key developments Ukraine Initiation of production from legacy well in Elizavetovskoye licence, data acquisition leading to sanction of new 5-well development project Award of multi-stage frac contract for…
Summary of 2012 Foundations set for acceleration of activities Successfully entered rapidly growing Russian independent gas market Increased production and extended exploration upside in Russia Pre-frac operations underway in…
Part 2 Looking to the future Where we are now - Paul Davies, Chief Executive Our markets - Peter Dixon, Commercial Director Fully funded programme - Martin Miller, Operations Director Financial platform 2013/14 - Cynthia Dubin,…
Part 2 Looking to the future Where we are now - Paul Davies, Chief Executive Our markets - Peter Dixon, Commercial Director Fully funded programme - Martin Miller, Operations Director Financial platform 2013/14 - Cynthia Dubin,…
Where we are now Fully funded development programmes underway Successful 40m five-year convertible bond issue underpins 2013/2014 capital programme Koshekhablskoye acidisation programme has significantly enhanced well productivity,…
Part 2 Looking to the future Where we are now - Paul Davies, Chief Executive Our markets - Peter Dixon, Commercial Director Fully funded programme - Martin Miller, Operations Director Financial platform 2013/14 - Cynthia Dubin,…
Supply and demand Ukraine Excellent commercial environment Maximising value at high prices Gas - 12/Mcf LPG - 970/tonne Oil - 93.5/bbl Fundamental change in legal environment - PSA legislation approved in 2012 Good commercial…
Russia Established market position Gas sales 2012 Average sales - 2.60/Mcf Year-end sales - 2.80 Mcf (100/Mcm) Region of Krasnodar is a significant net consumer of gas Price increase during 2012 Forecast for 2012-2015 is 15% per…
Supply and demand Russia The national picture Historical Gazprom fields now all in decline Gazprom is investing into expensive Yamal peninsula Increase in production cost will drive gas prices in Russia New independent sector, JKX…
Industrial gas demand growth in southern Russia Faster than elsewhere Regional gas consumption forecast Gas consumption structure in southern Russia +9.26 20 +5.09 by 2030 15 by 2020 11% 2010 4% 10 +1.66 4% 4% 49% 5 +0.34 0…
Part 2 Looking to the future Where we are now - Paul Davies, Chief Executive Our markets - Peter Dixon, Commercial Director Fully funded programme - Martin Miller, Operations Director Financial platform 2013/14 - Cynthia Dubin,…
Russia Koshekhablskoye field in full production Acid stimulation of wells 20, 25 and 27 has taken production to nominal capacity in 2Q 2013 Planned workover and sidetrack of Oxfordian well-05 Engineering of intermediate expansion…
Ukraine Ongoing development, appraisal and exploration Mobilising materials to carry out R-103 frac in mid-year Constructing Elizavetovskoye facilities, drill development well to start production by year-end Restarting development…
Hungary Low production, but exploration potential Water breakthrough in Hajdunanas field reduced production Hajdunanas-9 well planned as crestal in-fill to recover remaining gas reserves and test deeper oil potential Nearby…
Planned investment beyond 2013 Pressing the accelerator Additional workovers in Koshekhablskoye to support plant Novo-Nikolaevskoye Complex expansion Switch to stainless steel tubing to minimise corrosion Completion of initial…
Part 2 Looking to the future Where we are now - Paul Davies, Chief Executive Our markets - Peter Dixon, Commercial Director Fully funded programme - Martin Miller, Operations Director Financial platform 2013/14 - Cynthia Dubin,…
Financial platform for 2013/14 Strength, stability and flexibility Financial flexibility significantly Y2011 Capex 12.4 Russia 162.0m 41.4 improved 4.8 Ukraine Retired short-term 40m Credit Suisse 103.4 Hungary debt Rest of…
Capital expenditure A new chapter Anticipated capital expenditure of 74m in 2013 2013 2014 Drilling & Wells Fully funded programme USm USm Progress in Ukraine with Russia 20 5 Elizavetovskoye development Ukraine 24 53 and…
Part 2 Looking to the future Where we are now - Paul Davies, Chief Executive Our markets - Peter Dixon, Commercial Director Fully funded programme - Martin Miller, Operations Director Financial platform 2013/14 - Cynthia Dubin,…
Outlook Growth in key markets Current developments are targeting production growth and revenues in Ukraine and Russia Anticipate gas realisations in Ukraine to remain strong and realisations in Russia to rise Maintain focus on…
Bond issue Financing growth Raised longer term funding to increase momentum in its development, appraisal and exploration programmes, and for the upgrade of its facilities in Ukraine and Russia Placing of US40 million of guaranteed…
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