Novatek Announces Consolidated IFRS Results

OREANDA-NEWS. I JSC NOVATEK today released its audited consolidated financial statements for the years ended 31 December 2012 and 2011 prepared in accordance with the International Financial Reporting Standards (“IFRS”).

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

* excluding gain (loss) on disposal of interests in subsidiaries.

Total revenues grew by 20.4% year-on-year to RR 211.0 billion for the twelve months ended 31 December 2012 from RR 175.3 billion in 2011. The growth was due to an increase in hydrocarbon sales volumes and higher natural gas and liquids prices.

In 2012, profit from operations, adjusted for gain (loss) on disposal of interests in subsidiaries, amounted to RR 85.4 billion, increasing by 8.6% as compared with 2011. Profit from operations for 2011 includes the gain from the disposal of a 20% equity interest in Yamal LNG of RR 62.9 billion.

Profit attributable to NOVATEK shareholders, adjusted for gain (loss) on disposal of interests in subsidiaries, increased by 22.6% in 2012 to RR 69.5 billion, or by RR 22.91 per share, as compared to RR 56.7 billion, or by RR 18.69 per share in 2011.

Selected Operating Highlights

In 2012, natural gas sales volumes increased to 58.9 billion cubic meters (bcm), or by 9.7%, as compared with 2011, due to growth in production from our subsidiaries, which was mainly driven by the launch of the fourth stage of Phase Two development at the Yurkharovskoye field, as well as an increase in purchases of natural gas. As at 31 December 2012, the total amount of natural gas injected into underground gas storage facilities and reflected as inventory aggregated 1,096 million cubic meters (mmcm), as compared with 732 mmcm at the year-end 2011.

Liquid hydrocarbon sales volumes aggregated 4,203 thousand tons in 2012 increasing by 2.2% as compared with 2011. The increase is due to the commencement of gas condensate purchases from joint ventures and production growth from our subsidiaries, mainly an increase in crude oil output at the East-Tarkosalinskoye field. The growth in liquids sales volumes was constrained by a significant increase in stable gas condensate inventories due to redirection of sales to Asian-Pacific region that were in seaborne transit and not recognized as revenues in the current reporting period. As at the year-end, 461 thousand tons of stable gas condensate was in transit or storage and recognized as inventory, as compared with 228 thousand tons as at 31 December 2011.

Selected Balance Sheet Items

(in millions of Russian roubles)