OilVoice - Gazprom Neft Reports Q2 2010 Results

Gazprom Neft Reports Q2 2010 Results

Saturday, August 21, 2010

Gazprom Neft has published the Company's consolidated financial statements for Q2 2010 and H1 2010, which have been prepared in compliance with US GAAP standards.

Revenues in Q2 2010 rose 52% to USD 8,026 mln (Q2 2009: USD 5,269 mln). Growth was driven by an 8,3% increase in production volumes and rising oil and oil products prices. Revenues for the H1 2010 were $15 322 mln. - 61% up from the corresponding period of 2009.

Earnings before interest, taxes, depreciation and amortisation (EBITDA) for Q2 2010 was up 3% to USD 1,550 mln (Q2 2009: USD 1,501 mln). The rise in EBITDA was partly offset by a higher tax burden and an increase in natural monopolies tariffs. H1 2010 EBITDA was $3 136 mln, 28% higher than in H1 2009.

Net income in Q2 2010 and H1 2010 increased by 3% and by 42% to USD 747 mln and 1,501 mln respectively as compared to net income adjusted for the one-off gain following the Sibir Energy acquisition in Q2 2009 (USD 725 mln) and in H1 2009 (USD 1,060 mln).

First Half Production
In the first half of 2010, Gazprom Neft achieved consolidated crude oil production of 24,431 thousand tons, up 7.1 per cent as compared with the same period last year (crude production made 500 thousand tons, up 2.1 per cent as opposed to the Company's business plan). Consolidated average daily production in the first half of 2010 exceeded 136.7 thousand tons.

In the first half of 2010, the first Gazprom Neft's overseas asset Naftna Industrije Srbje (NIS) boosted production dramatically. By the first half of 2010, crude production increased by 24.8 per cent and hit 448.1 thousand tons.

The first half of 2010 was also marked by production growth in the Company's wholly owned subsidiaries. The leading position in terms of the production growth rate is occupied by the Company's subsidiary Gazpromneft-Khantos having increased its crude production in the reporting period up to 4,728 thousand tons, up 21 per cent as compared to the same period last year, and up 3.8 per cent in relation to the business plan. Six-month targets were also smashed in the Muravlenko branch of Gazpromneft-Noyabrskneftegaz, where crude production increased by 2.1 per cent, up to 5,141 thousand tons.

In the first half of 2010, crude production at Tomskneft and Slavneft joint ventures, where Gazprom Neft holds 50% stakes, flattened out. At the subsidiaries, production in excess of the business plan made 1.3 per cent (33.3 thousand tons) and 0.2 per cent (8.3 thousand tons) correspondingly.

Sibir Energy and STS-Service, acquired by Gazprom Neft in 2009 and early 2010 correspondingly, showed a considerable production growth as well. Production ahead of target made 8 per cent (156.4 thousand tons) at Sibir Energy and 28 per cent (12.6 thousand tons) at STS-Service.

Gazprom Neft Deputy General Director for Exploration and Production Boris Zilbermints commented on the first six-month 2010 results:
'The Company managed to increase its crude production in the first half of 2010 mostly due to efficient geological and technical operations. While geological and technical operations in the first quarter of 2010 were seriously complicated by adverse weather conditions, in the second quarter we succeeded in filling a gap in the schedule; moreover, we got to considerably smash the planned targets in terms of geological and technical operations. Thus, the first half of 2010 resulted not only in exceeding the planned production targets, but also in surpassing most of the figures for the same period last year'.