Novatek Announces Consolidated IFRS Results for Year Ended 31 December

OREANDA-NEWS. March 19, 2010. OAO NOVATEK released its audited consolidated financial statements for the years ended 31 December 2009 and 2008 prepared in accordance with International Financial Reporting Standards (“IFRS”).

IFRS Financial and Operational Highlights (in millions of Russian roubles)

Total revenues grew by 13.5% year-on-year to RR 89,954 million for the twelve months ended 31 December 2009 from RR 79,272 million in the corresponding period of 2008, reflecting the general strength and resiliency of our core business operations despite the difficult economic operating environment. The increase in oil and gas sales was attributable to higher domestic natural gas prices and an increase in liquid hydrocarbon volumes sold.

As a result of the higher revenues and our ability to decrease controllable costs, profit attributable to NOVATEK shareholders increased by 13.7% to RR 26,043million, or RR 8.59 per share as compared to RR 22,899million, or RR 7.54 per share for the corresponding period in 2008.

Selected Operating Highlights

In 2009, total consolidated natural gas production increased by 1,923 mmcm, or 6.3%, compared to 2008 due to increased production capacity at the Yurkharovskoye field resulting from the launch of the first two stages of the field’s second phase of development in September 2008 and October 2009, respectively. The increase in our production capacity allowed us to decrease 2009 natural gas purchases by 1,885 mmcm, or 65.3%, as compared to 2008. The decrease in total 2009 natural gas sales volumes of 337 mmcm, or 1%, as compared to 2008 was mainly due to an increase in our inventory balance at underground storage facilities in 2009.

Our liquids production increased by 475 thousand tons, or 18.5%, to 3,038 thousand tons compared to 2,563 thousand tons in 2008, due to the expansion of unstable gas condensate production capacity at our Yurkharovskoye field as a result of the field’s ongoing development program. The increase in 2009 unstable gas condensate production, as well as a decrease in liquids inventory balances, allowed us to increase stable gas condensate and LPG sales volumes by 37.1% and 21.2%, respectively, compared to 2008.

At 31 December 2009, we had 111 thousand tons of stable gas condensate in transit or storage and recognized as inventory until such time as it is delivered to customers as compared to 220 thousand tons as of 31 December 2008. In 2009, our stable gas condensate in transit or storage and recognized as inventory decreased by 109 thousand tons compared to a decrease of four thousand tons in 2008.

Selected Balance Sheet Items (in millions of Russian roubles)