Quarter ended 30 September 2010 * Total revenue amounted to MUSD 581.0 (Q3 2009: MUSD 489.9). * EBITDA amounted to MUSD 129.7 (Q3 2009: MUSD 112.3). * Profit before tax amounted to MUSD 105.7 (Q3 2009: MUSD 78.5). * Net profit for the quarter amounted to MUSD 85.4 (Q3 2009: MUSD 59.6). * Basic and diluted earnings per share amounted to USD 0.49 and USD 0.45, respectively (Q3 2009: USD 0.34 and USD 0.34, respectively). * 6.5 mbbl (Q3 2009: 5.9 mbbl) of oil were refined and 4.3 mbbl (Q3 2009: 3.9 mbbl) produced. * Acquisition of gas stations expanded retail network to the Republic of Buryatia. * Rouble bonds offering raised MUSD 165. * Long-term project financing agreement of MUSD 760 with Vnesheconombank. Nine months ended 30 September 2010 * Total revenue amounted to MUSD 1,613.6 (nine months 2009: MUSD 1,181.7). * EBITDA amounted to MUSD 319.9 (nine months 2009: MUSD 297.7). * Profit before tax amounted to MUSD 211.0 (nine months 2009: MUSD 192.5). * Net profit for the nine months amounted to MUSD 165.0 (nine months 2009: MUSD 156.7). * Basic and diluted earnings per share amounted to USD 0.94 and USD 0.89, respectively (nine months 2009: USD 0.94 and USD 0.94, respectively). * 18.1 mbbl (nine months 2009: 16.2 mbbl) of oil were refined and 11.9 mbbl (nine months 2009: 12.2 mbbl) produced. * Eurobonds offering raised MUSD 350. Dear shareholders, For the third quarter 2010, Alliance Oil Company reports operational growth and improved financial performance. Revenues, margins, operating and net results increased compared to the second quarter for both the upstream and the downstream segments. As the Brent price recovered to the level above USD 80 per barrel late in the quarter, improved net export and domestic crude prices resulted in higher netbacks in the upstream segment. In the downstream segment, oil products prices overall remained stable with better margins late in the quarter. In the quarter, we saw significant effects of our drilling activity as upstream production increased by thirteen percent from the second quarter. We continued to implement the 2010 drilling program. So far this year, sixty six wells have been drilled. Our main development program, the Kolvinskoye oil field in Timano-Pechora, is on track for launch in 2011. Three wells have been successfully drilled and completed and we currently have four drilling rigs operating in the field. For the downstream segment, traditionally strong seasonal demand in the third quarter resulted in higher sales volumes which raised the refinery's run-rate to its full capacity. An electrical desalting and dehydrating section of the crude oil distillation unit, which will reduce overall energy consumption, has been put into operation as part of the Khabarovsk Oil Refinery modernisation program. Our retail network was expanded into the Republic of Buryatia, where we acquired a network of seven retail stations. The company's financial position further strengthened, as operating cash flows improved and the company signed a MUSD 760 long-term project financing agreement with Vnesheconombank for the Khabarovsk refinery modernisation and issued a MUSD 165 ten-year Rouble bonds. Outlook In the first months of the fourth quarter, market conditions have continued to be favorable. We have passed the peak in seasonal oil products demand, but markets have remained firm for this time of the year. In the upstream segment, recent production has averaged approximately 46,000 barrels of oil per day. While we continue to add new wells to increase production capacity, the drilling results and operational performance to date are being reviewed as we plan for the next year's campaign. With a strong focus on financial and operational efficiency, we are going to postpone drilling of some wells from this year to 2011. Accordingly, total 2010 upstream CAPEX and production for 2010 will be somewhat adjusted and we do not currently expect to fully reach this year's upstream targets. Looking further ahead, we plan for accelerated production growth in coming years with the objective to reach a daily production of 90,000 barrels in 2012. The launch of the Kolvinskoye oil field next year will be an important step towards this objective. In the downstream segment, increased oil products demand throughout the year has allowed us to raise refining volumes compared to last year and reach targets ahead of schedule. Recently, the refinery has been processing approximately 62,000 barrels per day on average. At this point, we have great confidence in realising this year's targets for the downstream segment with good margins. The Khabarovsk refinery modernisation is moving on schedule, and the new units will be prepared for operating in 2012. The continued development of our integrated and efficient business model and the execution of our capital projects in order to reach the company's long-term objectives remains our focus. Arsen Idrisov, Managing Director Conference call Date: Tuesday, 23 November 2010 Time: 10.00 CET To participate by telephone, please dial: from Sweden +46 (0)8 5853 6965 from Russia +7 495 705 9451 from other countries +44 (0)20 7784 1036 The presentation will be webcasted live at www.allianceoilco.com and www.financialhearings.com. A replay of the presentation will be available at www.allianceoilco.com. For further information: Arsen Idrisov, Managing Director, Alliance Oil Company Ltd, telephone +7 (495) 777 18 08. Eric Forss, Chairman of the Board, telephone +46 8 611 49 90. Alliance Oil Company Ltd is a leading independent oil company with vertically integrated operations in Russia and Kazakhstan. Alliance Oil has proved and probable oil reserves of 526 million barrels, refining capacity of more than 70,000 barrels per day and a network of gas stations and wholesale oil products terminals. Alliance Oil's depository receipts are traded on the NASDAQ OMX Nordic under the symbol AOIL.
Interim report for the quarter and nine months ended 30 September 2010
| Source: Alliance Oil Company Ltd
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