OREANDA-NEWS. July 16, 2012. E.ON AG and JSC  Gazprom have reached an agreement in the negotiations of their long-term gas supply contracts and signed today agreements to that effect. The settlement includes a retroactive adaptation of pricing conditions for the price review period since Q4/2010. E.ON expects the settlement to have a positive impact of about €1 bn on the Group's half-year results. This negotiation agreement will also end the ongoing arbitration proceedings. "We are pleased about the completion of our negotiations and the good result for both sides. Gazprom and E.ON have shown once more that, as long-term strategic partners, they are able to arrive jointly at viable solutions. By signing today's agreements we are strengthening our long-standing, success-ful partnership with Gazprom," said Johannes Teyssen, CEO of E.ON AG.

With the successful completion of the talks with Gazprom, E.ON has now successfully renegotiated the pricing conditions of all of its currently oil-indexed volumes under its long-term gas supply contracts. This marks a major milestone in restoring the competitiveness of E.ON’s long-term gas contracts. With the existing agreement the risk of the Group’s gas supply portfolio has been substantially decreased.

In connection with the settlement reached with Gazprom, E.ON has also raised its outlook for 2012. Apart from the positive effects of the renegotiated long-term gas supply contracts, the company, amongst other, is also taking account of contrary effects resulting from the divestment of its gas transmission company Open Grid Europe as well as lower production volumes in its E&P business due to the delayed commissioning or the outage of gas platforms.

For the full year 2012 E.ON now expects an EBITDA between €10.4 and 11.0 bn in 2012 (until now: €9.6 to 10.2 bn) and an underlying net income between €4.1 and 4.5 bn (until now: €2.3 to 2.7 bn). Apart from the higher EBITDA, one-off effects on taxes and net interest expenses as well as a generally lower tax rate have a positive impact on group earnings.