OREANDA-NEWS. RusRating has changed the outlook on ZAO Uralneftegazprom’s credit rating from “stable” to “negative” in response to a presumed decline in the financial stability of a subsidiary company due to reduced scope for support from the ultimate investor against a background of increased regulatory risks. The rating itself is unchanged at "BB" on the international scale and "BBB" on the national scale.

The rating is based on control of significant hydrocarbon reserves, 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.

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’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 (promissory notes).