Second quarter 2008 oil production update
West Siberian Resources Ltd's total oil production for the second quarter 2008
amounted to 4,266,707 barrels (3,250,395 barrels) and the average daily
production for the period increased to 46,887 barrels per day (35,718 barrels
per day). The group's total oil production for the first 6 months 2008 amounted
to 8,317,869 barrels (6,291,508 barrels). The 2008 production plan target of
18.6 million barrels in total remains unchanged with further increases in oil
production expected throughout the year. Currently production amounts to 47,429
barrels per day.
Average gross oil prices received in the second quarter 2008 increased to
approximately USD 83 per barrel from USD 62 received in the first quarter 2008.
The increase in gross prices was however partially offset by increased export
duties, which resulted in a preliminary improvement of average first quarter
netbacks to USD 53.5 per barrel, from USD 39.40 in the first quarter, after
transportation costs.
The total oil production came from the Timano-Pechora region (1,203,257
barrels), the Tomsk region (1,184,886 barrels), the Volga-Urals region
(1,776,588 barrels) and Kazakhstan (101,975 barrels). A total of 92 wells were
subject to workover or repair activities in the quarter. In the second quarter,
10 production wells were drilled.
Following the recent merger with Alliance Oil, the group's public reporting
structure has been updated to reflect the adjusted integrated business model. On
August 29 2008, the group will announce consolidated earnings for the integrated
operations of the combined group for the first time. The group will continue to
provide updates on significant operational events both in the upstream
(exploration and production) and downstream (refining and marketing) business
areas, however quarterly production reports will be discontinued.
From the second quarter 2008, Alliance Oil Company's operations will be
consolidated in West Siberian Resources Ltd's financial statements using the
accounting model prescribed by IFRS 3 “Business combination” for “reversed
acquisitions”. This accounting treatment requires Alliance to be treated as the
accounting acquirer for the consolidated financial information and WSR being
presented as the acquiree. WSR will, as the legal parent, continue to be
presented as parent company in future financial reports. Accordingly, oil
production of 3,904,836 barrels (832,695 barrels) will be consolidated in the
second quarter 2008 financial statements. For the first 6 months 2008 oil
production of 4,794,821 barrels (1,609,150 barrels) will be consolidated. Based
on the production plan target of 18.6 million barrels for 2008, 15.1 million
barrels of oil production will be consolidated in the 12 months 2008 financial
statements.
For further information:
Maxim Barski, Managing director, West Siberian Resources Ltd., tel. +7 495 956
48 82
Eric Forss, Chairman, West Siberian Resources Ltd., tel. +46 8 613 00 85
Also visit www.westsiberian.com
West Siberian is a leading independent oil company with vertically integrated
operations in Russia and Kazakhstan. West Siberian Resources has proved and
probable oil reserves of 489 million barrels, a production of above 47,000
barrels per day in the second quarter of 2008, refining capacity of 70,000
barrels per day and a network of 255 gas stations and 24 wholesale oil
terminals. West Siberian's depository receipts are traded on the OMX Nordic
Exchange Stockholm under the symbol WSIB.
