Pjsc Tatneft Regulatory News (ATAD)

31 Jan 2006 14:05

O.A.O. Tatneft31 January 2006 January 31, 2006 On January 25, 2006, OAO Tatneft issued the following press release: Conference of OAO Tatneft employees A regular conference of OAO Tatneft employees summarizing the results offinancial and business activity of the company during the year 2005 was held onTuesday, January 24, 2006. OAO Tatneft increased the production by almost 1% in 2005 OAO Tatneft managed to increase the crude oil production in the conditions ofdepleted oil fields last year. OAO Tatneft produced 25 million 332 thousandstons of crude oil, which was almost 1% higher then the level of the previousyear. OAO Tatneft increased the crude oil production by 7.3% during the periodof crude oil production stabilization (starting from 1994). Crude oil delivery by the first category increased from 75% to 98% over the year2004, which allowed solving the quality problem of the crude oil exportedthrough the Transneft pipeline system. The volume of associated gas produced by OAO Tatneft during 2005 amounted to 737million cubic meters. OAO Tatneft had managed to maintain the highest level(95%) of the associated gas utilization during the period of the last 15 yearsamong the crude oil producing companies while the average value for the industryis 73%. Production of the broad fraction of light hydrocarbons increased by 4.2%compared with 2004. Sales for 2005 are expected to be approximately 170 billion rubles. It increasedby 13% compared with 2004. It is expected that a balance sheet profit for theyear 2005 will amount to 50 billon rubles. The added value amount increased from88.6 billion rubles in 2004 to 125.1 billion rubles in the year 2005 and itaccounts for 77% of OAO Tatneft production during the year. The marketcapitalization of the Company increased by 2.5 times and reached 7.5 billion USdollars. OAO Tatneft shares proved to be an absolute leader of growth among thelargest oil and gas producing Russian companies. OAO Tatneft provided 3.3 billion rubles of capital investments for industrialconstruction in 2005. It allowed performing planned activities for constructionand rehabilitation of the oilfield pipelines, power transmission lines,construction and commissioning of 632 wells, construction of tanks for crude oilstorage. OAO Tatneft constructed and commissioned large industrial facilitiessuch as crude oil transfer stations in the adjacent to Transneft pipelines,three substations, five booster pumping stations, four cluster injectionstations and a lot of other facilities. The problem of timely registration of property rights to the facilities wassolved. The percentage of unfinished construction reduced by 33% during thereporting year. In 2005 OAO Tatneft expenditures for production and exploratorydrilling was 3.8 billion rubles. 508 thousand meters of rock were penetrated. 383 new production wells were putinto operation yielding 414 thousand tons of crude oil. The total penetrationmeterage including drilling operations for the joint ventures and independentoil companies performed by the Management Company "Tatneft-Burenie" amounted to780 thousand meters. OAO Tatneft tax payments amounted to 132 billion rubles in 2005 OAO Tatneft is duly paying all required taxes. The amount of taxes and paymentsto the budgets of different levels in 2005 increased by 1.8 times over the year2004 and constituted the amount of 132 billion rubles inclusive of VAT andexport duties. 17.2 billion rubles were charged into the consolidated budget ofthe Republic of Tatarstan. For the purpose of efficient usage of cash OAO Tatneft continued to optimize itscredit resources last year. OAO Tatneft repaid all outstanding ruble-denominatedloans in the amount of 6.8 billion rubles, as well as certain foreign currencydenominated loans in the amount of 168 million US dollars. As a result of measures taken to reduce diversion of working capital, accountsreceivables (excluding advanced export duty payments) reduced by more then 1.1billion rubles in comparison with the beginning of the year. The overdueindebtedness reduced by 2.5 times. Reduction of the warehouse inventory stock and finished products alloweddecreasing the level of critical standard circulating assets by 24% versus theprevious year. It was promoted by the expansion of consignment warehousesnetwork to 56. Material and supply inventory items for the amount of 1.3 billionrubles accounting for 9.5% of the total turnover were delivered through theconsignment warehouses. The share of consignments in the total turnover shallreach at least 15% in 2006. OAO Tatneft invested approximately 1.2 billion rubles into development ofpetrochemicals in 2005. The volume of marketable products manufactured byenterprises of the petrochemical complex was increased by almost 20% in 2005 andamounted to 16.4 billion rubles. IAI Nizhnekamskshina, a Tatneft's subsidiary,produced 11.4 million tyres during 2005. The output of carbon black increased by3.2% and reached 100 thousand tons. A number of filling stations controlled by OAO Tatneft reached 553 by thebeginning of 2006 with 408 stations in the Russian Federation and 145 stationslocated in the Ukraine. The total volume of the petroleum products retail salesthrough the filling stations network exceeded one million tons in 2005. The average salary of OAO Tatneft employees was increased by 25% in 2005 OAO Tatneft is adhering to the policy of maintaining the number of jobs at OAOTatneft Group of companies. The total number of employees is approximately110,000. OAO Tatneft pays special attention to the social security issues. OAO Tatneft continues the programs of the voluntary medical insurance andnon-governmental pension coverage for the retired employees. During 2005 OAO Tatneft allocated approximately 280 million rubles for grantingsocial benefits to the personnel within the framework of the collective laboragreement. The average salary of OAO Tatneft employees increased by 25% in 2005over the previous year. OAO Tatneft launched a welfare assistance program covering all participants inthe Second World War living in the south-eastern part of the Republic ofTatarstan for the total amount exceeding 60 million rubles. OAO Tatneft started implementation of the mortgage credit lending system forhousing construction. Construction of 14 apartment houses for OAO Tatneftemployees started last year. Four apartment houses with total living space areaof 31.7 thousand square meters were commissioned in 2005. OAO Tatneft approvedan internal document regulating extension of one-time lump sum loans to theemployees of OAO Tatneft to compensate the initial contribution for acquisitionof housing within the social mortgage system, which came into effect on January1, 2006. Press-Service of OAO Tatneft Forward-looking statements: This press release contains certain forward-lookingstatements of OAO Tatneft. OAO Tatneft can give no assurance that any of theevents mentioned in such statements will occur, or as to the precise timing oftheir occurrence. This information is provided by RNS The company news service from the London Stock Exchange