Kazmunaigaz Exploration Regulatory News (KMG)

PRESS RELEASE

KMG EP reserves update as at 31 December 2014

Аstana, 14 April 2015. JSC KаzМunaiGas Exploration Production ("KМG EP" or the "Company") announces today the results of the reserves audit as at 31 December 2014 performed by independent consultant Miller and Lents, Ltd. ("MLL") at the Ozenmunaigas JSC ("OMG"), Embamunaigas JSC ("EMG") and Ural Oil and Gas LLP ("UOG" where KMG EP holds a 50% stake) fields.

According to the MLL report there were the following changes in liquid hydrocarbon reserves as at the end of 2014 compared to the reserves as at the end of 2013:

· Proved (1P) liquid hydrocarbon reserves are down by 16%, or 19 million tonnes, to 103 million tonnes (763 million barrels);

· Proved plus probable (2P) liquid hydrocarbon reserves are down by 11%, or 16 million tonnes, to 132 million tonnes (981 million barrels);

· Proved, probable plus possible (3P) liquid hydrocarbon reserves are down by 10%, or 18 million tonnes, to 164 million tonnes (1,215 million barrels).

The decrease in the liquid hydrocarbon reserves is primarily due to the decline in the crude oil and gas products price, partially offset by the devaluation of Tenge. The crude oil price decline was reflected primarily in the OMG fields as the 2P liquid hydrocarbon reserves decreased by 19.6% or 19.5 million tonnes. At the EMG fields, the 2P reserves of liquid hydrocarbons increased by 4.5% or 1.8 million tonnes due to enhanced actual production indicators as compared to the forecast made by MLL in 2013 reserves report which has had a positive effect on the outlook of those indicators. At the UOG (Rozhkovskoye field) there was a 16.4% or 1.3 million tonnes increase in 2P reserves as a consequence of the new deposits discovery in the Bashkirian horizon in 2014.

The results of the assessment of liquid hydrocarbons as at 31 December 2014

Assessment of 2P reserves of joint ventures were made separately by independent auditors1. KMG EP's share in overall 2P reserves of Kazgermunai (KGM) (50% stake), CCEL (CCEL) (50% stake) and Petrokazakhstan Inc. (PKI) (33% stake) as at the end of 2014 amounted to 45 million tonnes (322 million barrels), which is 12% or 6 million tonnes less than in 2013. Therefore, consolidated 2P reserves of KMG EP including its stakes in KGM, CCEL, and PKI as at the end of 2014 amounted to 177 million tonnes (1,303 million barrels) which is 11% or 23 million tonnes less than in 2013.

Consolidated reserves

Notes to editors

KMG EP is among the top three Kazakh oil producers. The overall production in 2014 was 12.3 million tonnes (250 kbopd) of crude oil, including the Company's share in Kazgermunai, CCEL and PKI. The Company's total consolidated volume of proved and probable reserves including shares in the associates, as at the end of 2014 was 177 million tonnes (1,303 mmbbl), out of which 132 million tonnes (981 mmbbl) relates to Ozenmunaigas, Embamunaigas, and Ural Oil and Gas (Rozhkovskoye field, Fyodorovskiy block). The Company's shares are listed on the Kazakhstan Stock Exchange and the GDRs are listed on The London Stock Exchange. The Company raised over US$2bn in its IPO in September 2006.

For further details please contact us at:

KMG EP. Investor Relations (+7 7172 97 5433)

Asel Kaliyeva

e-mail: ir@kmgep.kz  

KMG EP. Public Relations (+7 7172 97 7915)

Yelena Pak

e-mail: pr@kmgep.kz  

Brunswick Group (+44 207 404 5959)

Andrew Mitchell

e-mail: KMGEP@brunswickgroup.com

Forward-looking statements

This document includes statements that are, or may be deemed to be, ''forward-looking statements''. These forward-looking statements can be identified by the use of forward-looking terminology including, but not limited to, the terms ''believes'', ''estimates'', ''anticipates'', ''expects'', ''intends'', ''may'', ''target'', ''will'', or ''should'' or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. These forward-looking statements include all matters that are not historical facts. They include, but are not limited to, statements regarding the Company's intentions, beliefs and statements of current expectations concerning, amongst other things, the Company's results of operations, financial condition, liquidity, prospects, growth, potential acquisitions, strategies and as to the industries in which the Company operates. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances that may or may not occur. Forward-looking statements are not guarantees of future performance and the actual results of the Company's operations, financial condition and liquidity and the development of the country and the industries in which the Company operates may differ materially from those described in, or suggested by, the forward-looking statements contained in this document. The Company does not intend, and does not assume any obligation, to update or revise any forward-looking statements or industry information set out in this document, whether as a result of new information, future events or otherwise. The Company does not make any representation, warranty or prediction that the results anticipated by such forward-looking statements will be achieved.1Assessment of KGM and CCEL reserves were made by «Miller and Lents, Ltd.» as at December 31, 2014 and October 31, 2014, respectively. Assessment of PKI reserves were made by «Ryder Scott Company LP» as at December 31, 2014.