OREANDA-NEWS. RusRating has placed the credit rating assigned to ZAO Uralneftegazprom – "BB" on the international scale and "BBB" on the national scale, in both cases with a stable outlook – on its watch list. This means that the rating could change (either rise or fall) in response to additional information received from the Company or identified in public sources.

The rating is based on control of significant hydrocarbon reserves, scope for financial support from the Company’s owners, a high percentage of equity financing and a moderate debt burden.

Constraining factors include a negligible market share and the virtual absence of highly-liquid assets.

About the Company

ZAO “Uralneftegazprom” is a private-sector Russian company that controls four oil and gas fields in Orenburg region (Kopanskoye, Berdyanskoye, Chkalovskoye and Terektinskoye). Gas reserves total 19.1 billion cubic metres and liquid hydrocarbon reserves 26.1 million tonnes. Recoverable reserves at active fields include roughly 5.6 million tonnes of oil and 1.2 million tonnes of gas condensate. Monthly output at this time is 3500 tonnes of condensate, 25.3 million cubic metres of gas and 900 tonnes of oil. Plans call for expanding both oil and gas production and subsidiary companies hold exploration licenses in several parts of Russia that include the possibility of future production, as well as warehouse property in Moscow. The Company is controlled by a group of investors that includes former ANK Bashneft President and one-time senator for Udmurtia Viktor Khoroshavtsev.

The Company’s debt burden is moderate and its operating margin healthy, while operating cash flow is stable. Fixed assets and financial investments are the main components of the balance sheet. Oil exploration assets are controlled via subsidiaries and their acquisition was financed by borrowed capital; at this time they generate no revenues due to the projects’ early stage. Risk sensitivity is high. The Company could face cash flow gaps in the medium term due to a large volume of sight veksels.