KazMunaiGas Exploration & Production Releases 2012 Financial Results

March 14, 2013

JSC KazMunaiGas Exploration Production (“KMG EP” or “the Company”) announces its consolidated financial statements for the year ended December 31, 2012.

    Revenues of 797bn tenge (US$5,346m)1, which is 11% higher than 2011 mainly due to higher export volumes and higher domestic prices.
    Net profit of 161bn tenge (US$1,079m) and earnings per share of 2,320 tenge (US$2.59 per GDR), a decrease of 23% and 21%, respectively, compared to 2011.
    The average price of Brent in 2012 was US$112 per barrel, almost same as in 2011.

Production Highlights

In 2012 KMG EP produced 12,191 thousand tonnes of crude oil (247 kbopd), including the Company’s stakes in Kazgermunai (KGM), CCEL (Karazhanbasmunai, CCEL) and PetroKazakhstan Inc. (PKI) which is 1% less than in 2011.

JSC Uzenmunaigas (UMG) produced 4,950 thousand tonnes (100 kbopd), which is 132 thousand tonnes less than in 2011. JSC Embamunaigas (EMG) produced 2,816 thousand tonnes (57 kbopd), which is similar to the volume produced in 2011. The total volume of oil produced at UMG and EMG is 7,766 thousand tonnes (156 kbopd).

The Company’s share in the production from KGM, CCEL and PKI for 2012 amounted to 4,425 thousand tonnes of crude oil (91 kbopd), approximately equivalent to 2011.

Crude oil sales

In 2012 the Company’s export and domestic sales from UMG and EMG were 6,078 thousand tonnes (122 kbopd) and 1,637 thousand tonnes (33 kbopd) respectively.

The Company’s share of sales from KGM, CCEL and PKI was 4,412 thousand tonnes of crude oil (90 kbopd), including 3,430 thousand tonnes (70 kbopd) or 78% of total sales supplied to export markets.

Net Profit for the Period

Profit after tax (net income) in 2012 was 161bn tenge (US$1,079m), representing a 23% decrease compared to 2011, mainly due to impairment of assets, higher income taxes, higher employee costs and lower share of income from associates and joint ventures, partially offset by the benefits of higher export volumes and higher prices for domestic supply.

Revenues

The Company’s revenues in 2012 amounted to 797bn tenge (US$5,346m), which is 11% higher than in 2011. This resulted from a 6% increase in export volumes and a 39% increase in domestic selling prices, compared to 2011.

Taxes other than on Income

Taxes, other than on income, in 2012 were 274bn tenge (US$1,839m), which is 3% lower compared to 2011, mainly due to non-repeated expense of 15bn tenge (US$105m) for export duty charge in 2011 and lower expenses from mineral extraction tax. This was almost fully offset by increased rent tax costs, which resulted from higher export volumes.

Production Expenses

Production expenses in 2012 were 140bn tenge (US$941m), which is 19% higher than in 2011. A significant part of the production cost increase is due to higher expenses for employee costs, energy charges and a change in crude oil balance. These were partially offset by a reduction in repair and maintenance expenses due to a decrease in the number of repaired wells and of hydrofracturing in line with the production programme, as well as adverse