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ROADSHOW – Kazmunaigas Exploration Production

Kazmunaigas Exploration Production · Mar 1, 2014 · 33 slides

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Slides

  1. ROADSHOW – Kazmunaigas Exploration Production – slide 1
    JSC KazMunaiGas Exploration Production Roadshow March 2014
  2. ROADSHOW – Kazmunaigas Exploration Production – slide 2
    Agenda Kazakhstan oil & gas infrastructure overview Ownership structure KMG EP at a glance Kazakhstan economy: key indicators Stabilisation of KMG EPs production in 2012-2013 2014-18 production profile Addressing power cutoff…
  3. ROADSHOW – Kazmunaigas Exploration Production – slide 3
    Kazakhstan oil & gas infrastructure overview Oil refineries Oil pipelines RUSSIA Samara KAZAKHSTAN PNHZ 2; Atyrau-Samara 37mmbbl Karachaganak 2 EMG Kenkiyak Atasu CPC KGM ANPZ2; 36mmbbl Kumkol Atyrau 3 1 Tengiz PKI…
  4. ROADSHOW – Kazmunaigas Exploration Production – slide 4
    Ownership structure Tengizchevroil 20% Samruk-Kazyna Kashagan 16.8% Karachaganak 10% 100% KazMunayTeniz 100% Mangistaumunaigas 50% LSE/KASE KMG NC KazTransOil 100% KazTransGas 100% (1) (1) Caspian Pipeline Consortium 21% 34%…
  5. ROADSHOW – Kazmunaigas Exploration Production – slide 5
    KMG EP at a glance The largest Kazakh oil producer listed on LSE and KASE Preferential access to reserves and infrastructure through NC KMG KGM CCEL PKI Further OMG and EMG (50%) (50%) (33%) acquisitions Corporate governance in…
  6. ROADSHOW – Kazmunaigas Exploration Production – slide 6
    Kazakhstan economy: key indicators National Fund assets grew to 71bn in 2013 Inflation at 6-8% during the last five years 185 71 152 148 147 147 149 126 123 120 58 44 19% 31 27 10% 24 8% 21 8% 7% 28 29 28 6% 6% 6-8% 14 24…
  7. ROADSHOW – Kazmunaigas Exploration Production – slide 7
    Stabilisation of KMG EPs production in 2012-2013 Improvement of internal communications with the staff Reorganisation of More manageable OMG and EMG in production joint ventures processes 7
  8. ROADSHOW – Kazmunaigas Exploration Production – slide 8
    Stabilisation of KMG EPs production in 2012-2013 Production at OMG, mn tonnes Production stabilization at OMG Strike at OMG, Production stabilized, Production recovered, 1.5 reduction of number of producing wells established…
  9. ROADSHOW – Kazmunaigas Exploration Production – slide 9
    2014-18 production profile OMG production, kbopd 112 110 111 108 109 110 105 100 100 90 2012 2013 2014B 2015B 2016B 2017B 2018B 4.95 mt 5.21 mt 5.35 mt 5.40 mt 5.47 mt 5.53mt 5.57mt Decline by 1% per year on average 250 247…
  10. ROADSHOW – Kazmunaigas Exploration Production – slide 10
    Addressing power cutoff problem Oil losses due to electricity cutoffs Bringing wells to the normal regime, days 19,458 15,762 26.1 26 19 8,151 14 12 3,202 4.3 2.7 2.0 2011 2012 2013 2014 Jan-Feb 2011 2012 2013 2014 Jan-Feb…
  11. ROADSHOW – Kazmunaigas Exploration Production – slide 11
    Modernisation programme projects, USm 2012A 2013A 2014B 2015B 2016B 2017B 2018B Station for diagnosis and repair of underground equipment - - - - Reconstruction of gas collection and transportation system - - - - - - Oil pipeline…
  12. ROADSHOW – Kazmunaigas Exploration Production – slide 12
    Modernisation programme projects in 2014 Reconstruction of injections plants Maintenance facility for production Service center to support 1,000 units of equipment special vehicles 12
  13. ROADSHOW – Kazmunaigas Exploration Production – slide 13
    Change in reserves Consolidated reserves* Consolidated 2P reserves as at 2012 end mmbbl -25% mmbbl -28% +44% 2,482 2,083 EMG 100% 1,854 289 KGM 50% 1,494 125 1,182 CCEL 50% 822 194 1,494 PKI 33% 83 1P 2P 3P OMG 100% 48 755…
  14. ROADSHOW – Kazmunaigas Exploration Production – slide 14
    Exploration programme FEDOROVSKIY ZHARKAMYS EAST I Exploration Capex, mn KARPOVSKY N. 114 108 TEMIR 7 12 Ko 90 15 84 TAISOGAN o 73 43 W.Kazakhstan LIMAN 60 20 36 Novobogatinsk S.W. Novobogatinsk W. 17 Makat E. 12 86 13 39…
  15. ROADSHOW – Kazmunaigas Exploration Production – slide 15
    Exploration potential of Kazakhstan Borders of Kazakhstan Proven reserves: Oblast of borders Oil 3.9bn tonnes (12 in the world)* the main part of the basin is contracted Natural gas 1.3trln. cub. m (20 in the Partially contracted…
  16. ROADSHOW – Kazmunaigas Exploration Production – slide 16
    Dividend distributions to shareholders Declared dividends Payout ratio1, % 1,976 95% KZT per share (US per GDR) 1,619 1.8 1,300 1.8 68% 1.5 800 44% 656 704 563 0.9 30% 500 0.9 0.8 27% 0.8 20% 24% 24% 0.7 2 4 2006 2007 2008…
  17. ROADSHOW – Kazmunaigas Exploration Production – slide 17
    Cash and financial assets Cash and financial assets 4.1 bn as at Possible use of cash: 31.12.2013 KKB, 13% Capex at core assets 700m per year Investments in exploration in appearance BNP Paribas, 12% of prospective projects: up…
  18. ROADSHOW – Kazmunaigas Exploration Production – slide 18
    Financial performance Free cash flow* Financial indicators mn bn 1,227 2.6 2.3 2.2 299 2.0 255 1.6 1.4 1.2 1.1 1.1 1.1 344 0.9 135 194 0.2 2012 FCF* Change in Capex Dividends Other 2013 FCF* EBITDA** Net income Free cash…
  19. ROADSHOW – Kazmunaigas Exploration Production – slide 19
    The impact of recent macroeconomic changes on KMG EP economics Export custom duty, /bbl Devaluation effect on financial indicators Expected FX gain in 1Q2014 600mn 10.9 81% of cash denominated in hard currencies 8.2 5.4 5.4 Tenge…
  20. ROADSHOW – Kazmunaigas Exploration Production – slide 20
    Environmental claims in 2013-2014 Successfully appealed in There is a probability of 59,3bn Tenge appeal in the Supreme Court three courts OMG The decision may be revisited 212,6bn Tenge Dismissed by the court by the…
  21. ROADSHOW – Kazmunaigas Exploration Production – slide 21
    Highly profitable investments in joint ventures Dividends/ Acquisition amount Production* Reserves** KGM 1,875 971 Payback period - 4 years +19% +11% PKI 1,210 Payback period 3 years 932 +22% +7% 162 Payback period 6 years…
  22. ROADSHOW – Kazmunaigas Exploration Production – slide 22
    Stable contribution from joint ventures 85 50 48 31 23 30 KGM, 50% 33 32 32 30 28 27 2013 2014B 2015B 2016B 2017B 2018B Production, kbopd Capex**, mn 65 57 59 56 57 59 CCEL, 50% 19 19 19 19 19 19 2013 2014B 2015B…
  23. ROADSHOW – Kazmunaigas Exploration Production – slide 23
    Domestic supply trends +33% 63.3 th 63.6 th (47.3) (44.9) +76% 54.6 th 55.2 th (40.8) (41.2) 48.0 th (35.9) 40.0 th 37.9 th (35.7) (34.5) 27.3 th (25.3) Demand drop at ANPZ 3.9 3.5 3.5 3.0 1.8 1.6 1.9 1.9 2011 2012…
  24. ROADSHOW – Kazmunaigas Exploration Production – slide 24
    Tax regime since 2009 Rent tax and MET are linked to oil price Rent tax applies to crude oil exports, zero rate below US40/bbl Brent, then progressive scale from 7% to 32% Mineral Extraction Tax (MET) rate depends on production level…
  25. ROADSHOW – Kazmunaigas Exploration Production – slide 25
    Reference information Share information, 31/12/2013 Contacts Total Treasury Corporate website: Number of ordinary shares 70,220,935 4,124,586 www.kmgep.kz Number of preferred shares 4,136,107 2,073,276 GDRs per one ordinary share 6…
  26. ROADSHOW – Kazmunaigas Exploration Production – slide 26
    Abbreviations list AGM Annual General Meeting of shareholders bbl barrel mmbbl million barrels bn bbl billion barrels bopd barrels per day EGM Extraordinary General Meeting of shareholders kbopd thousand barrels per day US m million US…
  27. ROADSHOW – Kazmunaigas Exploration Production – slide 27
    Appendix 27
  28. ROADSHOW – Kazmunaigas Exploration Production – slide 28
    Financial summary USm unless otherwise indicated 2007 2008 2009 2010 2011 2012 2013 Production at Core assets (kbopd) 192 190 181 177 159 156 162 Revenue 3,974 5,029 3,291 4,135 4,919 5,346 5,368 Total operating costs (1,720) (2,470)…
  29. ROADSHOW – Kazmunaigas Exploration Production – slide 29
    Lifting costs*, EMG and OMG, /bbl 15.1 13.8 12.6 16.0 15.8 15.3 14.9 14.7 13.6 13.6 14.1 13.5 12.0 11.6 11.8 10.1 8.4 7.9 7.7 7.4 7.7 7.6 7.8 8.3 8.1 8.0 6.4 5.6 6.7 5.9 6.4 3.7 4.8 2.6 3.3 2007 2008 2009 2010 1Q11…
  30. ROADSHOW – Kazmunaigas Exploration Production – slide 30
    Export and domestic sales (OMG, EMG) Sales volume, kbopd 2013 Netbacks 190 US/bbl2 UAS CPC Domestic 179 176 171 160 162 Brent 108.7 108.7 - 152 152 156 155 Adjustments on quality bank (2.1) (8.4) - 104 97 and discounts 98 85 82…
  31. ROADSHOW – Kazmunaigas Exploration Production – slide 31
    Summary of JVs financial results KGM 100%, USmn 2008 2009 2010 2011 2012 20131 Revenue 1,763 1,173 1,527 2,354 2,310 2,448 Operating expenses (490) (737) (812) (1,343) (1,225) (1,487) Income taxes (530) (179) (286) (375) (470) (355)…
  32. ROADSHOW – Kazmunaigas Exploration Production – slide 32
    Chronology of cash distributions to shareholders 2007 May 2007 (AGM): dividend of US303m 2008 May 2008 (AGM): dividend of US346m Oct 2008 (BoD): 12 month buyback program, US148m 2009 May 2009 (AGM): dividend of US321m 2010 Feb…
  33. ROADSHOW – Kazmunaigas Exploration Production – slide 33
    Tax sensitivity Hypothetical estimated tax take(1) at different oil prices 80,0 72,0 Export duty2 59,0 60,0 Tax burden, /bbl 46,9 Rent 40,0 35,9 25,3 20,1 20,0 14,5 MET Other taxes EPT 0,0 CIT 40 50 60 80 100 120…

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