OREANDA-NEWS. RusRating has assigned a credit rating to ZAO Uralneftegazprom (Orenburg). The rating is “BBB” on the national scale and “BB” on the international scale, in both cases with a stable outlook.

According to the agency, the rating is based on control of hydrocarbon reserves and scope for financial support from the Company's owners.

Constraining factors include a decline in the operating margin last year as the Company reported costs associated with the activation of inactive wells and the mechanisation of production (the use of electrical submersible pumps with a pay-off period extending into 2014) together with management fees; its high debt burden is another consideration.

Uralneftegazprom [trs. Ural Oil and Gas Industries CJSC] is a private-sector Russian company that controls six oil and gas fields in Orenburg region - Kopanski, Berdyanski, Chkalovski, Terektinski, Yuzhno-Orenburgski and Novopavlovski - of which the last two are not in production. As of 1 January 2014 recoverable gas reserves totalled 21 billion cubic metres and in-place liquid hydrocarbon reserves 27 million tonnes. Recoverable reserves at active fields totalled roughly 5.8 million tonnes of oil and 1.4 million tonnes of gas condensate. Monthly production at this time is 3900 tonnes of condensate, 28 million cubic metres of gas and 1800 tonnes of oil. The Company is controlled by a group of investors, one of whom is former ANK Bashneft President Viktor Khoroschavtsev.

On the basis of accounts for 2012 the Company's debt burden is moderate and its operating margin healthy, while operating cash flow is stable. Figures for the first three quarters of 2013 show a substantial decline in the operating margin due to a rise in both current and capital costs, as well as managerial expenditures. The debt burden has also increased. Fixed assets and financial investments are the main components of the balance sheet. Risk sensitivity is elevated. The Company could face cash flow gaps in the medium term due to a large volume of sight veksels (promissory notes).