Year ended 31 December 2009
* Total revenue amounted to MUSD 1,726.4 (MUSD 2,721.6).
* EBITDA amounted to MUSD 387.9 (MUSD 585.0).
* The result for the financial year increased to MUSD 345.0 (MUSD 46.0).
* The result before tax for the quarter and the financial year was positively
affected by a MUSD 174.7 partial reversal of last year's non-cash impairment of
upstream assets resulting from an updated appraisal of oil reserves and
economic conditions.
* Earnings per share amounted to USD 2.06 (USD 0.28) per share for the
financial year.
* Proved and probable oil reserves increased to 525.9 mbbl (487.3 mbbl).
* 21.8 mbbl (24.6 mbbl) were refined and 16.0 mbbl (17.4 mbbl) produced for the
financial year.
Quarter ended 31 December 2009
* Total revenue amounted to MUSD 544.7 (MUSD 409.6).
* EBITDA increased to MUSD 90.2 (MUSD 6.2).
* The result for the quarter increased to MUSD 188.3 (loss of MUSD 290.9).
* Earnings per share amounted to USD 1.09 (loss of USD 1.81) per share for the
quarter.
* 5.6 mbbl (4.9 mbbl) of oil were refined and 3.9 mbbl (4.5 mbbl) produced for
the quarter.
2010 Outlook
Refining volumes targeted to average 57,500 barrels per day and crude
production to reach 50,000 barrels per day to total 21 mbbl and 17 mbbl
respectively in 2010.
Dear Shareholders,
In 2009 the viability and firmness of Alliance Oil Company, in the atmosphere of
global uncertainty and instability, was tested. Our integrated business model
proved its solidity and consistency as we managed to further improve our
operations, strengthen the company's balance sheet, increase the reserve base
and expand the retail network while achieving the highest result in the
company's history. The company produced 16.0 million barrels of crude oil and
refined 21.8 million barrels and fully achieved the budget for 2009. The
upstream and the downstream segments' contributions to consolidated EBITDA have
balanced.
Last year, our operations were largely supported by recovering markets, both
internationally and domestically. Crude oil prices started the year close to USD
40 per barrel and gradually improved to USD 70-80 per barrel by year end.
Domestic demand for oil products continued to recover with significant increases
in the second and third quarters.
In the upstream segment, the company was able to demonstrate its flexibility in
managing its operational and capital expenditures. We were able to limit our
capital expenditures in the first half of the year reacting to the severe market
conditions, and responded promptly by increasing our drilling activity as the
environment subsequently changed for the better.
With a strong focus on the organic development, the company's proved and
probable reserves increased from the impressive exploration activity replacing
342 per cent of its annual 2009 production and bringing its 2P reserve base to
526 million barrels. Most of the growth was delivered by the Lek-Kharyaga field
in the Timano-Pechora region. These reserve additions and the improved oil price
environment allowed us to reverse impairment charges of USD 175 million from
last year with a corresponding increase in the result before tax for the year
and the fourth quarter. In December the company was awarded a 25 year
exploration and production license for the Gusikhinsky license area in the
Volga-Urals region with prospective resources of 68 mbbl supporting its
exploration potential onwards.
In the downstream segment, the company continued the modernization of the
Khabarovsk oil refinery successfully launching a new water treatment unit and
new premium class gasoline tanks. We have further expanded our retail network by
acquiring a number of outlets in the Amur and Khabarovsk regions of the Russian
Far East. The company operates a total of 261 retail stations and 16 wholesale
terminals under its highly recognized Alliance Oil brand.
In the fourth quarter 2009, our solid operating performance continued. We report
further revenue growth compared to the third quarter. Upstream operational
results further improved as crude netbacks increased. Downstream results were
lower in the quarter as a typical lower seasonal demand affected volumes and
economics late in the year.
As we continue to proactively address our financial needs, the company has
further improved its liquidity. Alliance Oil Company was one the first CIS
issuers to successfully raise MUSD 390 through a convertible bond and equity
placement in July 2009. In December, the Supervisory Board of the state owned
Vnesheconombank approved the bank's participation in the modernization of the
Khabarovsk refinery.
We have also announced a proposed bond offering and recently received the first
credit ratings in company history, B+ from S&P and B from Fitch.
Outlook
In December 2009, the board of directors approved the company's growth strategy
through 2012. We have set ambitious targets both for the upstream and downstream
segments. The company's general objective remains to be the-best-in-class
independent integrated business focusing on efficient growth in both segments.
In 2009, we established a solid operational and financial basis for reaching our
ambitious targets in coming years.
In the upstream sector, we target production growth to 50,000 barrels per day
this year and to produce a total of 17 million barrels of crude oil. Our
strategic priority is Timano-Pechora with allocation of significant resources to
take advantage of improved potential at the most lucrative Kolvinskoye and Lek
Kharyaga oil fields and benefit from the MET tax holidays through 2015. This
region will be our main driver towards reaching the new upstream production
target of 90,000 barrels per day in 2012.
In the downstream sector, our agenda is to complete the modernization of the
Khabarovsk refinery in 2012 securing better complexity, higher quality oil
products, higher capacity and, as a result, better returns. The upgrade program
is fully on track, and this year we expect significant progress in the
modernization plan. For 2010, the company's refining plans remain unchanged at
21.0 million barrels.
Arsen Idrisov
Managing Director
Conference call
Date: Monday, February 22
Time: 10.00 CET
To participate to the conference call please dial:
from Sweden
+46 (0)8 5051 3794, confirmation code 4375042
from Russia +7 495 705 9452, confirmation code 4375042
from other countries +44 (0)20 7806 1967, confirmation code 4375042.
The press
conference will be webcasted live at www.allianceoilco.com and
www.financialhearings.com.
The conference 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 8 613 00 85 or +46 705 23 86
62.
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, oil production of approximately
42,700 barrels per day, refining capacity of 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.
