RusRating changes outlook on ZAO Uralneftegazprom credit rating
OREANDA-NEWS. The change in outlook from “negative” to “stable” reflects a stronger operating margin and a fall in the company’s debt burden. Prospects for a further improvement in its rating outlook are constrained by a possible decline in the financial stability of subsidiary firms in response to reduced scope for support from their ultimate beneficiary owner, 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, a modest debt burden and a qualitative improvement in the Company’s operating margin.
Constraining factors include a negligible market share, the virtual absence of highly-liquid assets and a possible decline in the financial stability of subsidiary companies in response to reduced scope for support from their ultimate beneficiary owner, against a background of increased regulatory risks.
ZAO “Uralneftegazprom” is a private-sector Russian company that operates four oil and gas fields in Orenburg region (Kopanskoye, Berdyanskoye, Chkalovskoye and Terektinskoye). Gas reserves (as of 1 January 2015) total 19.1 billion m3 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 3600 tonnes of condensate, 22.3 million m3 of gas and 2600 tonnes of oil. Plans call for expanding both oil and gas production. The Company is controlled by a group of investors that includes Viktor Khoroshavtsev, formerly President of ANK Bashneft and at one time senator for the Republic of Udmurtia.
The Company’s debt burden is modest and its operating margin healthy, while operating cash flow is stable. Fixed assets and financial investments are the main components of the balance sheet. Liquidity is judged sufficient. Risk sensitivity is elevated.
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