AMSTERDAM, THE NETHERLANDS--(Marketwired - Nov 20, 2013) -
Q3 2013: Steadfast Financial and Operational Results
Amsterdam, 20 November 2013 - Zhaikmunai L.P. (LSE : ZKM )
("Zhaikmunai"), the oil and gas exploration and production enterprise
with assets in north-western Kazakhstan, today announces Zhaikmunai's
Third Quarter 2013 (Q3 2013) results for the period from 1 January to
30 September 2013.
FINANCIAL HIGHLIGHTS
Third Quarter (Q3) 2013 Summary
All figures in US$ millions unless otherwise stated
Q3 Q3 Change
2013 2012 YoY
Average production (boepd) 43,522 39,947 9.0%
Revenue from hydrocarbon sales 214.7 199.8 7.4%
EBITDA(1) 127.1 129.4 (1.8%)
Net income 50.1 50.6 (1.0%)
Net cash used in investing activities (87.1) (53.5) 62.8%
Debt 652.5 450.0 45.0%
Cash 225.0 189.5 18.7%
Average Brent crude oil price on which ZKM based 106.73 102.98 3.6%
its sales (US$ per bbl)
Nine Months Ended 30 September 2013 Summary
All figures in US$ millions unless otherwise stated
9M 2013 9M 2012 Change
YoY
Production (boepd) 45,414 36,859 23.2%
Revenue from hydrocarbon sales 657.2 523.2 25.6%
EBITDA(1) 411.6 340.5 20.9%
Net income 161.8 137.2 17.9%
Net cash used in investment activities (167.4) (153.5) 9.1%
Debt 652.5 450.0 45.0%
Cash 225.0 189.5 18.7%
Average Brent crude oil price on which ZKM 104.81 104.10 0.7%
based its sales (US$ per bbl)
COMMENTARY
Revenue and EBITDA
Strong revenue from sales of hydrocarbons stood at US$ 657.2 million,
an increase of 25.6%, (or US$ 133.9 million) in comparison to last
year's first nine months (US$ 523.2 million). The increase in GTF
output over the period, in conjunction with the high oil price
environment, has contributed to the outstanding first nine months 2013
revenue.
EBITDA(1) stood at US$ 411.6 million, an increase of 21% (or US$ 71.1
million) in comparison to last year's first nine months (US$ 340.5
million). EBITDA margin for 9M 2013 of 62.6% was in line with that of
65.1% for 9M 2012.
Net Income
Net income for the period increased 17.9% to US$ 161.8 million in the
first 9 months of 2013 from US$ 137.2 million for the same period in
2012. Net income as a percentage of total sales declined slightly to
24.6% from 26.2% as compared to the same period last year.
Cash
Zhaikmunai ended the first nine months of 2013 with US$ 225.0 million
of cash, of which US$ 159.3 qualified as cash and cash equivalents, US$
61.5 million in short and long-term deposits, and US$ 4.2 million was
restricted cash. A distribution of US$ 63.2 million was paid out during
the third quarter.
Cost of Sales and General and Administrative Expenses
Cost of sales in the first nine months of 2013 increased by US$ 51.4
million or 33.1% to US$ 206.5 million compared to US$ 155.1 million for
the same period in 2012. This was mainly due to an increased
depreciation charge linked with the completion of the GTF, Zhaikmunai
taking over in full the management and operations of the GTF, as well
as increased repair, royalty and government share expenses.
General and administrative expenses in the first nine months of 2013
decreased by US$ 5.6 million or 10.3% to US$ 48.6 million compared to
US$ 54.2 million for the same period in 2012.
Capital Expenditure
In the first 9 months of 2013, Zhaikmunai's net cash used in investing
activities grew to US$ 167.4 million, from US$ 153.5 million in the
same period in 2012. This increase was driven by the placement of
long-term bank deposits of US$ 30 million, partially offset by the
redemption of US$ 18.5 million of short-term bank deposits.
Kai-Uwe Kessel, Chief Executive Officer of Zhaikmunai commented:"I am
delighted to announce another set of excellent financial results.
Our cash position remains healthy as we enter into our next investment
phase. We have developed a good balance between returning some cash to
shareholders through our dividend and buy-back programme whilst moving
ahead with our next development phase, which will allow us to
significantly increase our cash flows further. I am confident that we
can pursue this excellent operational and financial track record in to
the final quarter of 2013 and into 2014."
(1) Q3 and 9M 2012 EBITDA includes an adjustment of US$ 21.5 million
linked to one-off social programme expenses related to road construction
works.
OPERATIONAL UPDATE
Production:
* September 2013 - The scheduled shutdown of the Gas Treatment
Facility (GTF) was completed within 9 days;
* Q3 2013 total average total daily production amounted to 43,522
boepd, representing a 9.0% increase compared to Q3 2012 (39,943
boepd);
* 9M 2013 total average total daily production amounted to 45,414
boepd, representing 23.2% production growth between 9M 2013 and 9M
2012 (36,859 boepd);
The product split for Q3 2013 was as follows:
PRODUCTS Q3 2013 Average Q3 2013 Product
Production Mix %
Crude Oil & Stabilised 18,393 boepd 42.3%
Condensate
LPG (Liquid Petroleum Gas) 4,178 boepd 9.6%
Dry Gas 20,950 boepd 48.1 %
TOTAL 43,522 boepd 100%
Drilling Operations
* During the first 9 months 2013, a total of 5 gas-condensate wells
(# 218, #402, #410, #216, #223) have been drilled and tied-in to the
Gas Treatment Facility (GTF) and a total of 3 new crude oil wells (#
60, #701 and #117) have been drilled. Of these 8 newly drilled wells,
5 are currently producing whereas the other 3 wells are undergoing
test operations;
* Zhaikmunai is on target to achieve its planned drilling programme
for 2013. At the end of September 2013, Zhaikmunai had 16 producing
oil wells, and 14 producing gas condensate wells;
* 5 drilling rigs are being operated on a full-time basis on the
Chinarevskoye field;
CORPORATE DEVELOPMENTS
Proposed Name Change at Special General Meeting (SGM) (29 November
2013):
The Board of Directors of Zhaikmunai has, among other items,
recommended that the Partnership's name be changed from Zhaikmunai L.P.
to Nostrum Oil & Gas LP at its SGM scheduled for 29 November 2013.
One of the main objectives for the name change of the holding company
is to signal the transformation of Zhaikmunai from a single asset to a
multiple asset company to the public and the markets. The new name is
felt to better reflect the new positioning and future ambitions of the
company.
The name of Zhaikmunai LLP, the operational Kazakh company, will not
change. Similarly, any future potential acquisitions of companies
holding license areas will be held under their respective names.
Signing of 10th Supplementary Agreement to the PSA
On 28 October 2013, the Ministry of Oil & Gas of the Republic of
Kazakhstan signed the 10th Supplementary Agreement to Zhaikmunai's PSA
(Production Sharing Agreement) in relation to the Chinarevskoye field.
Among other items, this agreement contains the extension of
Zhaikmunai's exploration period, other than for the Tournaisian
horizons, to 26 May 2014. This provides sufficient time for the company
to carry out its planned exploration programme before submitting the
results to the State.
Expansion of Processing Capacity with Additional Train to Gas Treatment
Facility
In line with previous communications, civil and construction works
continue on the third train of the Gas Treatment Facility (GTF). The
company remains on track to complete the project by the end of 2016.
Efforts Continue with a View to a Possible Alternative Listing
The company continues to explore a possible Premium Listing on the
London Stock Exchange and other alternatives to the current GDR listing
through extensive consultation with banks and legal and tax advisers
with a view to achieving the best possible result for shareholders.
Market updates with more specific news on this topic will be made as
and when appropriate.
Initiation of GDR Buy-Back Programme
On 22 April 2013, Zhaikmunai announced the terms of a long-term GDR
Buy-Back programme to assist in driving shareholder value. This
programme commenced as planned in the week of 20 May 2013, following
the release of the Q1 2013 Results.
Zhaikmunai has since purchased 1,532,340 of its Global Depositary
Receipts ("GDRs") through Deutsche Bank AG and VTB Capital plc. The
purchased GDRs are currently being held in treasury by the Partnership,
which has 186,650,608 GDRs in issue (excluding those GDRs held as
treasury GDRs). GDRs held in treasury may be used to satisfy
Zhaikmunai's obligations under its employee stock option plan.
CONFERENCE CALL
Zhaikmunai's management team will be available for a Q&A session for
analysts and investors on Wednesday, 20 November at 14:00 UK time
(GMT).
If you would like to participate in this call, please contact
investor_relations@zhaikmunai.com in advance of the call to receive the
registration link.
Download the Q3 2013 Financial Statements:
http://www.rns-pdf.londonstockexchange.com/rns/4613T_1-2013-11-19.pdf
Further information
For further information please visit www.zhaikmunai.com
Further enquiries
Zhaikmunai LP - Investor Relations
Bruno G. Meere
Kirsty Hamilton-Smith
investor_relations@zhaikmunai.com + 31 20 737 2288
College Hill - UK + 44 (0) 207 457 2020
David Simonson
Tony Friend
Catherine Wickman
Anca Spiridon
Promo Group Communications - Kazakhstan
Asel Karaulova
Ekaterina Sulema + 7 (727) 264 67 37
Deutsche Bank + 44 (0) 207 545 8000
Ben Lawrence
JM Hafner
Rob Abbott
VTB Capital plc + 44 (0) 203 334 8000
Alexander Metherell
Marcus Brown
Giles Coffey
About Zhaikmunai
Zhaikmunai is an independent oil and gas enterprise currently engaging
in the production, development and exploration of oil and gas in
north-western Kazakhstan. Its Global Depositary Receipts (GDRs) are
listed on the London Stock Exchange (Ticker symbol: ZKM). Zhaikmunai's
principal producing asset is the Chinarevskoye field, in which it holds
a 100% interest and is the operator, through its wholly-owned
subsidiary Zhaikmunai LLP. In addition, Zhaikmunai holds a 100%
interest in and is the operator of the Rostoshinskoye, Darinskoye and
Yuzhno-Gremyachenskoye oil and gas fields. Located in the pre-Caspian
basin to the north-west of Uralsk, these exploration and development
fields are approximately 60 and 120 kilometres respectively from the
Chinarevskoye field.
Forward-Looking Statements
Some of the statements in this document are forward-looking.
Forward-looking statements include statements regarding the intent,
belief and current expectations of the Partnership or its officers with
respect to various matters. When used in this document, the
words"expects,""believes,""anticipates,""plans,""may,""will,""should"
and similar expressions, and the negatives thereof, are intended to
identify forward-looking statements. Such statements are not promises
or guarantees, and are subject to risks and uncertainties that could
cause actual outcomes to differ materially from those suggested by any
such statements.
Deutsche Bank
Deutsche Bank AG is authorised under German Banking Law (competent
authority: BaFin - Federal Financial Supervisory Authority) and
authorised and subject to limited regulation by the Financial Conduct
Authority (the "FCA"). Details about the extent of Deutsche Bank AG's
authorisation and regulation by the FCA are available on request.
VTB Capital
VTB Capital Plc is authorised by the Prudential Regulation Authority
and regulated by the Financial Conduct Authority and the Prudential
Regulation Authority.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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