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2Q 2015 Financial Results – LUKOIL

LUKOIL · Aug 8, 2015 · 32 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. 2Q 2015 Financial Results – LUKOIL – slide 1
    2Q 2015 Financial Results (US GAAP) Member of the Board of Senior Vice-President, Finance Directors, Vice-President for Strategic Development Leonid Fedun Alexander Matytsyn , 28 2015 Moscow, 28 August 2015
  2. 2Q 2015 Financial Results – LUKOIL – slide 2
    Main Events in 2Q 2015 Liquid hydrocarbon production growth + 5.2 % Russia oil production stabilization + 0.3 % Executing plans for the project West Qurna-2 The amount of compensation in 6M 2015 was 1.5 bln Start of production…
  3. 2Q 2015 Financial Results – LUKOIL – slide 3
    1H 2015 Financial Highlights mln Net income 1,695 EBITDA 6,379 Free cash flow 588 Net debt 10,287 4
  4. 2Q 2015 Financial Results – LUKOIL – slide 4
    Record Dividend Payment Dividend per one common share of LUKOIL, RUB 180 160 140 120 94 100 80 60 50 60 40 60 50 20 40 0 2012 2013 2014 Interim dividends Final dividends In August 2015. LUKOIL completed…
  5. 2Q 2015 Financial Results – LUKOIL – slide 5
    Macroeconomic and Tax Environment 1H 2015/1H 2014 -55,7% Fuel oil (Russia) -47,9% Fuel oil (Europe) -46,5% Urals REVENUE -39,9% Diesel fuel (Europe) (prices) -38,5% Gasoline (Europe) -37,9% Diesel fuel (Russia) -37,0%…
  6. 2Q 2015 Financial Results – LUKOIL – slide 6
    The price war between OPEC and US producers has reached a critical phase Brent price history, /bbl US oil rig count 120 2 000 110 1 500 1 000 100 500 90 0 2014 2014 2015 2015 80 OPEC crude oil production vs quota, MMb/d 70…
  7. 2Q 2015 Financial Results – LUKOIL – slide 7
    Low oil prices will help to rebalance the market Share of horizontal rigs, contracted by shale US oil production forecasts, MMb/d companies*, % 10,0 75% 74% 73% 9,5 72% 71% 9,0 70% 69% History 68% 8,5 consensus forecast,…
  8. 2Q 2015 Financial Results – LUKOIL – slide 8
    Main Operating Results 1H 2015/1H 2014 77,5% Liquid hydrocarbon production abroad 24,3% Exports of crude oil 5,2% Liquid hydrocarbon production Hydrocarbon production 4,8% Domestic refined product sales -3,5% Domestic…
  9. 2Q 2015 Financial Results – LUKOIL – slide 9
    Sustainable production growth LUKOIL liquid hydrocarbon production, Kbpd 6M 2013 6M 2014 6M 2015 LUKOIL continues to demonstrate oil production growth driven by both international projects including WQ-2 (+150% y-o-y) and…
  10. 2Q 2015 Financial Results – LUKOIL – slide 10
    Stable Oil Production in Russia Change in LUKOIL oil production in Russia, (6M 2015 to 6M 2014), mln bbl Korchagin Other Samara-nafta Kama-Oil Other Bashneft-polyus E-Lambeyshorskoe Alabushin S-Bayandyskaya 6M 2014…
  11. 2Q 2015 Financial Results – LUKOIL – slide 11
    Western Siberia Production Decline Will be Offset by High- Return Projects Net price including benefits (Brent 60) , per bbl High viscous (Yarega) Western Siberia production decline is offset among other by oil volumes from…
  12. 2Q 2015 Financial Results – LUKOIL – slide 12
    Optimization of Capex Allowed to Increase FCF Change in E&P investments, FCF* and hydrocarbons production (6M 2015 to 6M 2014) International integrated LUKOIL oil companies** E&P investments, RUB E&P investments, Hydrocarbons…
  13. 2Q 2015 Financial Results – LUKOIL – slide 13
    Operating Expenses 2Q 2015 q-o-q mln 1H 2015 y-o-y 2,063 14% Total operating expenses 3,871 -20% 1,003 14% Hydrocarbon extraction expenses 1,884 -17% 385 16% Own refining expenses 717 -28% 48 -4% Refining expenses at third…
  14. 2Q 2015 Financial Results – LUKOIL – slide 14
    Effective Cost Control Lifting costs per boe, Lifting costs per boe, 8 20 18 6,13 6,12 5,59 5,67 5,75 5,42 16 6 5,29 5,23 14 4,76 5,71*5,59* 4,24 12 4 10 4,46* 8 4,06* 3,30* 6 2 4 2 0 0 1q 2q 3q 4q 1q 2q 3q 4q 1q 2q…
  15. 2Q 2015 Financial Results – LUKOIL – slide 15
    SG&A and Transportation Expenses Transportation expenses, mln SG&A expenses, mln 1 700 1 200 1 600 1,553 1,557 1,015 994 993 1,510 1 000 1 500 856 1 400 800 770 1,303 1,310 1 300 1,274 665 1 200 600 1q 2014 2q 2014 3q 2014 4q…
  16. 2Q 2015 Financial Results – LUKOIL – slide 16
    CAPEX Structure 2Q 2015 q-o-q mln 1H 2015 y-o-y 2,890 19% Total capital expenditures 5,320 -31% 2,330 18% Exploration and production 4,306 -30% 1,352 15% Russia 2,523 -43% 978 21% International 1,783 3% 474 18% Refining…
  17. 2Q 2015 Financial Results – LUKOIL – slide 17
    Capital Expenditures Exploration and production, mln Refining, marketing and distribution, mln 4 000 1 000 3,445 892 3,000 800 744 3 000 2,725 2,712 708 2,330 57% 600 1,976 2 000 61% 447 401 474 67% 59% 46% 52% 400 1 000 43%…
  18. 2Q 2015 Financial Results – LUKOIL – slide 18
    Financial Results 2Q 2015 q-o-q mln 1H 2015 y-o-y 28,104 21% Sales 51,294 -31% 2,063 14% OPEX 3,871 -20% 4,973 -4% Taxes other than income tax, excise, export tariffs 10,145 -43% 1,598 56% Income from operating activities…
  19. 2Q 2015 Financial Results – LUKOIL – slide 19
    mln 12 000 15 000 3 000 6 000 9 000 0 1H 2014 Net income 4,122 Decrease in taxes, excise and export duties 8,187 OPEX decrease 996 Decrease in transportation 497 expenses Decrease in…
  20. 2Q 2015 Financial Results – LUKOIL – slide 20
    mln 12 000 3 000 6 000 9 000 0 Cash at the beginning of 1H 2015 3,004 Net cash provided by operating activities 6,145 Net movements of short- term borrowings and proceeds from issuance 1,176 of…
  21. 2Q 2015 Financial Results – LUKOIL – slide 21
    Robust Financial Position Debt-to-capital Net debt to EBITDA 30% 1,2 1,0 20% 0,8 0,6 10% 0,4 0,2 0% 0,0 2011 2012 2013 2014 1H 2015 2011 2012 2013 2014 1H 2015 LUKOIL Majors average LUKOIL Majors average Total debt and net…
  22. 2Q 2015 Financial Results – LUKOIL – slide 22
    Robust Competitive Position in the Global Industry ROACE, % Dividend yield, % 30 10 25 8 20 6 15 4 10 5 2 0 0 2009 2010 2011 2012 2013 2014 2009 2010 2011 2012 2013 2014 Majors LUKOIL Majors LUKOIL E&P capital expenditures…
  23. 2Q 2015 Financial Results – LUKOIL – slide 23
    Acquisition of new perspective resources LUKOIL has been awarded the rights to develop the Vostochno-Taimyrsky block, which is located in the Taimyr Dolgano-Nenets district of the Krasnoyarsk region. OOO LUKOIL-West Siberia, a…
  24. 2Q 2015 Financial Results – LUKOIL – slide 24
    West Qurna-2 Development WQ-2 oil production (100% share), Kbpd 34% 23% Added value 43% April August June In 1H 2015 we shipped 22 tankers with 34.1 mln bbl of compensation oil Compensation volume in 1H 2015 was…
  25. 2Q 2015 Financial Results – LUKOIL – slide 25
    Kandym Project Aral Khauzak- Kandym Shady Gissar Natural gas production in Uzbekistan, Kbpd Project stages: May 2015 Start of production tests at facilities for Kandym early gas project in Uzbekistan. Launch of two…
  26. 2Q 2015 Financial Results – LUKOIL – slide 26
    In 2015 LUKOIL Will Complete Large Oil and Gas Refining Projects Nizhny Novgorod Perm Catalytic cracking - 2 Coker Capacity: 2.1 mln t/year Capacity: 2.0 mln t/year Launch: 4Q 2015 Pre-started 2-nd line of LTCR unit Capacity:…
  27. 2Q 2015 Financial Results – LUKOIL – slide 27
    Volgograd Refinery Primary oil refining complex AVT-1 was launched in June 2015 ELOU-AVT-1 unit 6.0 mln t Utilities and infrastructure (modernization) Effect Increasing refinery capacity +3.2 mln t Increasing oil refining…
  28. 2Q 2015 Financial Results – LUKOIL – slide 28
    Downstream Segment Demonstrates Stable Operating Income in 2015 Operating Income * of Downstream**, bln Despite almost twofold decrease in oil prices in 1H 2015, Downstream business segment demonstrated stable operating income…
  29. 2Q 2015 Financial Results – LUKOIL – slide 29
    Integrated Project for Gas Production, Gas Processing and Energy in the Perm Region LUKOIL-Perm production of natural gas Perm GPP and APG Facilities (LAUNCHED) mcm Gas fractionation unit-2 Low-temperature condensation and…
  30. 2Q 2015 Financial Results – LUKOIL – slide 30
    Premium Segment: Lubricants Up to 100 mln EBITDA of the segment Products are presented in more than 100 countries Main events in 1H 2015 Start of ship oil supply to Mediterranean Shipping 7 blending and packaging plants Company…
  31. 2Q 2015 Financial Results – LUKOIL – slide 31
    Environmental Safety is LUKOIL Priority In April 2015 LUKOIL and World Wide Fund for Nature (WWF) signed a cooperation agreement The agreement provides for bilateral consultations, working meetings, exchange of information and…
  32. 2Q 2015 Financial Results – LUKOIL – slide 32
    Conclusions Keeping a high level of dividend payments Growth of LUKOIL production, stabilization of production in Russia Realization of incurred cost compensation plan on West Qurna-2 project Running efficient projects in…

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