TIDMUEN
RNS Number : 0580P
Urals Energy Public Company Limited
27 September 2013
Press Release 27 September 2013
Urals Energy Public Company Limited
("Urals Energy" or the "Company")
2013 Half Year Results
Urals Energy PCL (AIM:UEN), the independent exploration and
production company with operations in Russia, is pleased to
announce its half-year results for the six months ended 30 June
2013.
Operational highlights
-- Total production at Arcticneft reached 125,651 barrels
(H1-2012: 128,249 barrels)
-- Total production at Petrosakh reached 240,533 barrels
(H1-2012: 233,484)
-- Current daily production at Arcticneft is 702 BOPD -
slightly higher than an average of 694 BOPD for the six
months ended 30 June 2013
-- Current daily level of production at Petrosakh is 1,315
BOPD slightly down from an average of 1,330 BOPD for
the six months ended 30 June 2013
-- Well # 53 was spudded at Petrosakh
-- Measures to halt natural decline at Petrosakh including
the completion of successful workovers have stabilised
production
-- New well drilling and existing well optimisation programs
in place and being implemented on both fields
Financial highlights
-- In H1-2013 gross profit improved by 60% to US$4.9 million
(H1-2012: US$3.0 million), as a result the Company achieved
a net profit of US$1.0 million for the period (H1-2012:
US$0.6 million loss)
-- For the first time since 2006, positive net working capital
on 30 June 2013 at US$0.7 million (2012: US$1.0 million
negative working capital)
-- Net loss of US$2.5 million (H1 2012: net loss of US$2.0
million) caused by exchange rate movements during both
H1-2012 and H1-2013
-- Successful implementation of cost reduction program in
2012 resulting in 10% decrease in cost of sales
-- In June 2013, the Company entered into a short-term loan
agreement with Petraco Oil Company Limited ("Petraco")
under which Petraco has advanced US$7.0 million. The
Loan is being used by the Company to both progress its
2013 drilling plan and working capital financing
Post-period end and outlook
-- Initial production testing on Well #53 on the Petrosakh
Field will be completed during October 2013
-- The annual planned tanker shipment l for export from
Arcticneft is expected in late October 2013
-- Repayment of all loans from Petraco by year end
-- Expected release of charge over the Company's Arcticneft
assets by Petraco
-- Drilling of a new well # 112 will start shortly after
Well # 53 commences production
-- Initial reports from the AKN seismic survey appears positive
with an improvement in production anticipated along with
encouraging data on deeper targets
-- Seeking possible M&A and joint venture targets with a
view to expanding and optimising the Company's asset
portfolio, including producing assets, as well as earlier
stage exploration plays predominantly in the European,
and Western Siberia regions.
Alexei Maximov, Chief Executive, commented:
"The Board is pleased with the progress that Urals Energy has
made since the start of 2013 and considers that the Company has
finally turned the corner. During the period under review, the
Company improved its production and cash generation at both
Arcticneft and Petrosakh. In addition, our balance sheet was
strengthened and for the first time since 2006 net working capital
became positive.
"Well #53 has now been spudded, and the measures taken to halt
the natural decline at Petrosakh, including the completion of
successful workovers, has stabilised production. New well drilling
and existing well optimisation programmes are in place and being
implemented on both fields. Initial reports from the seismic survey
appear extremely positive and provide a strong base for the
improvement in anticipated production as well as encouraging data
on deeper targets. More details on the seismic survey will be
announced at the appropriate time.
"With the expected repayment of the loans from Petraco and the
associated release of their charges, the Board believes that Urals
Energy is now well positioned for growth. The Board continues to
seek possible M&A and joint venture opportunities with a view
to expanding and optimising the Company's portfolio."
- Ends -
For further information, please contact:
Urals Energy Public Company Limited
Alexei Maximov, Chief Executive Tel: +7 495 795 0300
Officer
Sergey Uzornikov, Chief Financial www.uralsenergy.com
Officer
Allenby Capital Limited
Nominated Adviser and Broker
Nick Naylor Tel: +44 (0) 20 3328
5656
Alex Price www.allenbycapital.com
Media enquiries:
Abchurch
Henry Harrison-Topham / Quincy Allan Tel: +44 (0) 20 7398
7710
henry.ht@abchurch-group.com www.abchurch-group.com
Chief Executive Officer's Statement
Financial Results
Operating Environment
The six months ended 30 June 2013 were characterised by a stable
crude oil market price at an average level of US$108 per barrel
(H1-2012: US$110). Domestic prices for light oil products ranged
from US$110 to US$142 per barrel (H1-2012: US$85 to US$129). High
and stable domestic prices secured the Company's operating cash
flows at a level sufficient to maintain its operations and comply
with license requirements at both fields.
There were no deliveries of crude oil exported from Arcticneft
during the reporting period, resulting in 20,743 metric tons of
crude oil that remained in stock. The tanker from Arcticneft is
expected in late October 2013.
Operating Results
US$'000 Period ended 30 June:
------------------------
2013 2012
--------------------------------------------- ----------- -----------
Gross revenues before excise, export duties 17,775 16,832
Net revenues after excise, export duties
and VAT 15,881 15,362
Gross profit 4,930 3,077
Operating (loss)/profit 1,023 (591)
Management EBITDA 2,780 1,391
Total net finance benefits/(costs) (3,296) (1,542)
Profit for the period (2,537) (2,043)
--------------------------------------------- ----------- -----------
Gross Revenues (US$'000)
Period ended 30 June:
----------------------------------------- -------------------------
2013 2012
----------------------------------------- ----------- ------------
Crude oil 1,707 1,114
Export sales - -
Domestic sales (Russian Federation) 1,707 1,114
Petroleum (refined) products - domestic
sales 15,905 15,473
Other sales 163 245
Total gross revenues 17,775 16,832
----------------------------------------- ----------- ------------
For the six months ended 30 June 2013, total gross revenues
increased by US$0.9 million resulting from a raise of average net
back prices for petroleum (refined) products of US$73.86 per barrel
for the six months ended 30 June 2013 (US$57.73 for the six months
ended 30 June 2012) and a higher crude oil net back price of
US$59.46 per barrel for the six months ended 30 June 2013 (US$49.88
per barrel for the six months ended 30 June 2012). The increase was
partially off-set by a decline of sales volumes totaling 184,861
barrels for the six months ended 30 June 2013 (compared with
219,010 barrels for the six months ended 30 June 2012). Netback, in
the case of domestic crude oil sales, is the gross sales net of
VAT. Netback for domestic product sales is defined as gross product
sales minus VAT, transportation, excise tax and refining costs.
For the six months ended 30 June 2013 all domestic sales of
crude oil and almost all petroleum (refined) products related to
Petrosakh. During the six months ended 30 June 2013, Arcticneft
sold petroleum (refined) products to FGUP
"ArcticMorNefteGazRazvedka" ("AMNGR") for US$474,000 (H1-2012:
US$356,000).
Summary table: Net backs (US$/bbl)
Period ended 30
June:
----------------------------------------------- ------------------------
2013 2012
----------------------------------------------- ----------- -----------
Crude oil 59.46 49.88
Export sales - -
Domestic sales (Russian Federation) 59.46 49.88
Petroleum (refined) products - domestic sales 73.86 57.73
----------------------------------------------- ----------- -----------
Gross profit (net revenues less cost of sales) for the first
half of 2013 increased by 58% to US$4.9 million (H1-2012: US$3.1
million). The main driver of the increase was the higher
netbacks.
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