Q3 2012 Novatek OAO Earnings Conference Call (IFRS)
Nov 13, 2012 AM CET
NVTK.MZ - Novatek PAO
Q3 2012 Novatek OAO Earnings Conference Call (IFRS)
Nov 13, 2012 / 02:00PM GMT
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Corporate Participants
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* Mark Gyetvay
Novatek - CFO
* Leonid Viktorovich Mikhelson
Novatek - CEO, Chairman -Management Committee
* Alexander Palivoda
Novatek - Head - IR
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Conference Call Participants
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* Oleg Maximov
Sberbank CIB - Analyst
* Karen Kostanian
Bank of America - Analyst
* Tatiana Boroditskaya
UBS - Analyst
* Max Moshkov
UBS - Analyst
* Ildar Khaziev
HSBC - Analyst
* Paval Soriken
Morgan Stanley - Analyst
* Vaskaslav Shimen
Deutsche Bank - Analyst
* Alex Popovich
Wood Mackenzie - Analyst
* Arton Konsheen
JP Morgan - Analyst
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Presentation
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Operator [1]
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Good day, and welcome to the Novatek Third Quarter 2012 Results Conference Call. Today's conference is being recorded. At this time, I'd like to turn the call over to Mr. Oleg Maximov, Senior Analyst, Oil and Gas Sberbank CIB. Please, go ahead sir.
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Oleg Maximov, Sberbank CIB - Analyst [2]
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Thank you. Good afternoon and welcome. I'm Oleg Maximov from Sberbank and (inaudible) third quarter 2012 financial results from (inaudible). With me today are Leonid Viktorovich Mikhelson, Chairman of the Management Board, Mark Gyetvay, Financial Officer and member of the (inaudible) and Alexander Palivoda, Head of Novatek's Investor Relations.
Mark, please start with your presentation.
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Mark Gyetvay, Novatek - CFO [3]
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Thank you, Oleg. Ladies and gentlemen, shareholders and colleagues, good evening and welcome to our third quarter 2012 conference call. would like to thank everyone for joining us this evening and again, extend our sincere gratitude to Troika Dialog Sberbank for organizing and hosting on earnings conference call.
As Oleg mentioned, joining me this evening, during the question and answer session, will be Mr. Leonid Mikhelson, CEO, Chairman of the Management Committee and a member of the board of directors.
The question and answer session will be handled simultaneously in the Russian and English languages. So, when we come to this part of today's conference call, I will ask you to keep this important point of consideration when asking questions. There will be plenty of time allotted to answer your important questions.
Before we begin with the specific conference call details, I would like to refer you to our disclaimer statement, as is our normal practice.
During this conference call, we may make reference to forward looking statements by using words such as plans, objectives, goals, strategies and other similar words which are other than statements of historical facts. Actual results may differ materially from those implied by such forward looking statements, due to the unknown risks and uncertainties and reflects our views at the date of this presentation. We undertake no obligation to revise or publicly release the results of any revisions to these forward looking statements in light of new information or future events.
Please refer to our regulatory filings, included in our annual review for the year ended the 31st of December, 2011 as well as our earnings press releases and documents throughout the past year for more descriptions of risks that may influence our results.
We were pleased to release another set of strong financial and operational results for the third quarter and nine months of 2012 prepared in accordance with international financial reporting standards. But before I discuss the financial and operational results in more detail, I would like to begin my -- tonight's conference call with my usual update on the news (inaudible) to our investors and analysts.
On the sixth of November, we formally announced our intention to acquire a 49% equity stake and closed joint stock company at Nortgas for a transaction value of approximately $1.4 billion subject to the completion of certain conditions and representation and warranties that are customary in mergers and acquisitions.
This past Friday, we announced that we have received preliminary consent for the transaction by the federal antimonopoly commission and that the appropriate waivers for the transaction were received from gas parliament contrary to market rumors and what was published in the press.
The transaction is expected to close in November and when closed, this acquisition will be value accretive to our shareholders, based on the expected transaction multiples.
The announcement to acquire Nortgas should not come as a major surprise for most investors and analysts, as this present [chase] -- this transaction has been rumored and previously discussed in the marketplace.
The Nortgas acquisition is consistent with our overall strategy to develop and/or acquire assets that are in close proximity to our transport and process and infrastructure to capture economies of scale, as well as operational and financial synergies.
Nortgas's primary asset is a north Urengoyskoye field, which is located approximately 25 kilometers south of our Yurkharovskoye field.
Strategically Nortgas has estimated proven reserves of 225 billion cubic meters of natural gas and 27 million tons of liquids for a combined 1.7 million barrels of oil equivalent, as appraised under the PRMS, preserve methodology at the 31st of December, 2011 by [Degoyer McNaughton].
Hydrocarbon deposits on the north Urengoyskoye are allocated between the western and eastern domes. But the field had been primarily producing from the western dome with initial production commencing in 2001.
Current infrastructure on the field consists of 50 producing wells, a gas stream in facility with a capacity of 5.5 billion cubic meters, a booster compressor station, as well as various gas and condensate gathering lines.
During the first nine months of 2012, the north Urengoyskoye field produced 3.1 bcm of natural gas and 320,000 tons of gas condensate, and is currently estimated to produce approximately 4.2 bcm of natural gas and 400,000 tons of condensate for the full year 2012.
Once the transaction is closed in November, we will receive our pro rata share of natural gas production through the remainder of the year, but more importantly we have already begun off taking 100% of the gas condensate production from the field and are currently processing these volumes through the Purovsky processing plant.
The economic and operational rationale to acquire this asset is quire straight forward. Estimated production growth at Nortgas is similar to the estimated growth of Novatek's production come 2011 to 2020. But we estimate that this growth will happen much faster, thus acceleration our production growth rates in the near and long term.
More importantly, 13% of the appraised proven reserves are classified as liquid reserves, mainly gas condensate, which his consistent with our commercial and operational strategies to accelerate our growth of liquid production to monetize these higher valued products.
With the expected field development of the eastern dome over the next couple of years, we anticipate that the overall field's annual production will more than double for natural gas between 9 and 10 bcm and triple for the output of gas condensate to roughly 1.4 million tons at plateau levels, providing us with significant upside potential as well as the opportunity to optimize the overall sales development program.
Equally important, if we compare the north Urengoyskoye field with our existing core producing assets, excluding the assets of SeverEnergia, the overall proven reserve base at Nortgas, according to the prior year PRMS appraised reserves has a higher proportional share of liquid reserves than our Yurharovskoye, East Tarkosalinskoye and [Hungchaiskoye] fields, which increases the overall economic of this deal to us as we expect to process and market the liquids through our liquids value chain.
It is relatively clear, looking at the existent asset portfolio and financial results that the monetary value per unit produced is much higher for a wet gas field, due primarily to the higher net back margins we receive for these CLs of hydrocarbons on the internal markets. Nortgas's higher production of liquid reserves will allow us to grow our gas condensate production profile at a rate exceeding that of our three core fields, and correspondingly capture these higher incremental margins to improve our cash flow generations.
The Nortgas acquisition will add approximately 829 million barrels of oil equivalent to our existent PRMS proven reserve base for a transaction multiple of $1.66 per barrel of oil equivalent which we believe is immediately value accretive to our share holders.
This represents an increase of roughly 7% to our total proven -- through total proven PRMS reserves on a pro forma basis to 12.2 billion barrels of oil equivalent, which represents a 7% increase in our natural gas reserves to 1.7 trillion cubic meters and 10% increase in our liquid reserves to 131 million tons after the 31st of December, 2011.
Another important point to note on this transaction is that the management of Nortgas will be on a parity base with Gazprom subsidiary [orinvoy] Gazproms and the corporate structure contemplated post this transaction will allow Novatek to pay minimal extraction tax at the lower rate applied to independent gas producers.
We are currently discussing the upcoming development plans of the eastern dome of the field and we believe that we may commission first production in late 2013, rather than 2014, as originally planned, based on optimized and the exportation of the field's hydrocarbon layers utilizing the techniques and the experiences employed at our other fields.
We are optimistic that this optimization program should reduce the field's overall development capital expenditures, expedite future production growth and generate higher product net back margins for our shareholders. Thus enhancing the overall project's free cash flow generation consistent with our operating normal and create incremental shareholder value beyond traditional reserve based value multiples.
We are very excited to have formally concluded this value accretive transaction with its upside production potential, low capital intensities and free cash flow generation and we'll update the investment community on these revised development plans towards the latter part of the first quarter, 2013.
Moving forward, I would like to discuss the recent topic regarding [Rossneftandinteral]. But first, I would like to firmly reiterate the production guidance that we provided into the investment community this past December as part of our new corporate strategy. Our goal remains the same.
We plan to double our production profile and increase our market share and Russian domestic market by the year 2020 and we have not revised these targets as a result of the announced switch into interal supply contract to Rosneft to mention in 2016. Or based on the speculated changes to the gas demand picture in Russia.
The existing contract with (inaudible) remains in force for the next three years and we fully expect the terms and conditions of this agreement will be a fulfilled and the associated revenues, operating cash flows and net back margins to be realized.
Let me reassure everyone again this evening that we understand the evolving dynamics of the Russian domestic natural gas market, as well as the potential for future competition on end customer sales.
This dynamically changing scenario was embedded into our overall assessment of the Russian domestic gas market, taken into consideration a full assessment of our market share position, our expected production profile and our commercial marketing capabilities, vis-à-vis our competitors.
Contrary to market speculation, we have neither lost our commercial marketing abilities, nor our influences in the Russian domestic market, but instead have completely accessed this level of market competition and are fully capable and prepared to market our present and future natural gas production as outlined in our strategy presentation.
We face these similar challenges in the past when we articulated our initial production target of 45 billion cubic meters by 2010 in mind 2005 as part of our IPO road show, when in fact, we were only producing approximately 20 billion cubic meters at that time.
Same market concerns were raised at the height of the financial and economic crisis in 2009. We were questioned many times by potential investors and analysts on the challenges we face marketing our volume of natural gas on a domestic market and our experience (technical difficulty) record as clearly demonstrated that we have successfully met these challenges and continued to grow our market share over the ensuing time periods.
As already reported this year, we continue to add new long term gas contracts to our existing portfolio of clients, such as Fordham, E.ON, Mechel, MNK and Severstal to name a few, as well as successfully penetrated the Chelyabins and Perm regions through our recent acquisitions of gas traders and the establishment of a firm market presence in these poor and industrial consuming regions and we strongly believe that we will continue to make notable inroads into other regional areas and secure new customers for future gas production as well as diversify our portfolio away from single large consumers to a more balanced marketing approach.
Another important point I'd like to highlight this evening. Our commercial marketing goal is continued movement our sales volumes toward the end consumer market to capture incremental margins and secure market share wand with the new contract already mentioned, we will continue to grow our proportional share of end customers versus wholesale traders in 2013 and beyond.
We've outlined the strategic intent in our strategy presentation and this goal will continue to serve as a guiding principle underlying our commercial marketing activities. Another issue that seems to be raised these days is the pricing terms of our products and our future potential contracts.
I have repeatedly stated that our primary aim is to improve the net back margins we receive across our portfolio of clients and the regions where we deliver natural gas. We continued to deliver expanding markets according to this aim. Pricing is obviously an important element in any contractual negotiation and our general pricing formulation is the FTS tariff price, subject to market based adjustments. It is important to distinguish that the independent gas producers are not bound by the FDS pricing model.
But nonetheless, use these prices as reference points. We have confirmed many times in the past that we do adjust our pricing formula for both premiums and discounts. But the circumstances is largely driven by market supply and demand, and more recently, since the economic crisis, this trend has been skewed more towards discounts than premiums.
Our policy has been, and will continue to be, that commercial terms and conditions with our counter parties will not be disclosed. However, you can review our financial results and determine if we are achieving our goal of expanding our -- expanding rather than contracting our net back margins.
We are confident that we will be able to market and sell our natural gas production based on the commercial terms of our contracts, and more importantly, our proven track record to be a reliable supplier of natural gas on the Russian domestic market.
Competition will no doubt be a factor in future pricing discussions, but is highly unlikely that we will experience and you will witness a severe collapse in the domestic pricing of natural gas as witnessed in the united states with the so called shale revolution, because the fundamental structure and the competitive landscape of the natural gas industry is not the same.
On a similar topic, I would like to note that our wholly owned subsidiary, Novatek gas and power, commenced gas trading activities on the European market in early October with the initial EMB contract and we are continuing our ongoing discussions to expand these activities to support our future trading efforts as well as gain a crucial foothold into the European markets when we commence our LNG project and it's requisite trading and commercial activities.
We will provide future updates on these and other international trading activities as new developments emerge.
Operationally, we announced a launch of the four stage of the phase two development at our Yurkharovskoye field by adding two additional gas treatment trains for a total annual capacity of 7 billion cubic meters, which essentially allows us to reach (inaudible) plateau design capacity of approximately 36.5 bcf.
We are also in the final stages of testing the first booster compressor station comprised in three compressor units to total capacity of 75 megawatts, required to maintain the field's production plateau levels.
As I mentioned on previous earning conference calls, the majority of capital has already been spend on the Yurkharovskoye field, as required to reach the field's designed capacity and achieve the field's planned development program and we are very proud of the operational excess we have achieved at this field, as well as the ability to leverage our development experiences on other Novatek projects.
We have achieved very high production flow well rates on a well designed development program --essentially reducing the overall capital intensity and number of the wells to exploit this field, which ultimately translates into generating high free cash flow returns and industry leading performance and financial metrics.
As for the [Usaluga] projects, construction of the first phase of the gas construction fractionation unit is almost complete, as well as ancillary infrastructure activities, such as a reservoir tank form comprising 25 storage tanks, with a total storage capacity of 640,000 cubic meters.
We also completed a tender process to select contractors and suppliers for the construction of the project's phase two and recently announced the conclusion of our first long term contract with [Brazcam], a Brazilian company for the sale and purchase of NAFTA products once processing commences. We anticipate beginning the operational fill and testing phases, sometime toward the end of 2012 and early 2013, prior to the commencement of actual fractionation and transshipment.
We continued our ongoing work activities at the [Amal] LNG project, as planned, and recently submitted the LNG plant design documentation package for state expert review as formally required in Russia. This state expert review is one of the key preconditions -- excuse me, for FID, final investment decision, and we anticipate that this forth coming expert opinion report will be received soon.
We also recently confirmed that the bidding process to award the EPC contract for the construction of the LNG plant is progressing on schedule and we anticipate the receipt of contractors proposals in December, 2012, which when received, will allow us to commence detailed LNG plant design work in early 2013. Project design works were also being carried out for the approach channels in the Gulf of [Obe] and the cargo handle facility, as well as project design for three well clusters and four roads.
We have no additional news to report on potential project partners, other than to state that we are continuing our ongoing discussions as previously reported. But more importantly, all work activities on the project are proceeding as planned. We anticipate making the FID decision in early 2013. We are proceeding with all work activities regarding the projects bankability for project financing purposes and we recently concluded a series of preliminary meetings with expert credit agencies regarding their financial participation in the project, based on sourcing of construction and project content.
Yesterday, we announced a cooperation agreement with [Rostatom], the state agency, whereby we will mutually work together to make sure that the ice breaking services and cargo handling will be available when needed and that Rostatom is committed to building new nuclear powered ice breakers that are safe, efficient and reliable to transport our LNG production through the Arctic Ocean's Northern Sea route. This announcement is yet another positive indication of the Russian government's firm commitment and support to our LNG project.
At SeverEnergia, we commenced initial production at the [Samborsky] field in April of 2012 as previously announced with the initial production capacity of 2.3 bcm of natural gas and approximately 360,000 tons of gas condensate.
Post this announcement, we have continued work activities on this field, and we expect the launch to field second phase of development by year end, which will double the field's production capacity at 4.8 bcm of natural gas and roughly 700,000 tons of gas condensate.
We have also commenced construction and drilling work activities at both the [Yurengoyskoye] and the [Yaroyahensky] fields and we anticipate that the first train will be completed at the Yurengoyskoye field during the latter part of June 2013, to allow us to commence fuel production.
The importance of SeverEnergia current and future development activities cannot be overstated as this joint venture will be a major contributor to the overall growth in our production profile in terms of both natural gas and gas condensate over the next several years.
SeverEnergia is expected to produce approximately 37 billion cubic of natural gas and 11.7 million tons of liquids, comprising gas condensate and crude oil at its plateau levels, as outlined in our strategy presentation and we have not changed our production forecast and/or the timing of production.
In regards to the natural gas mineral extraction tax, or MET, the proposed amendments recently passed the first reading of the [state duma] on the 16th of October and according to procedural rules, should be finalized in early December, but are subject to the final approval of the Russian federation budget.
The second reading is being conducted today and it is my understanding that the proposal has been improved.
The proposed gas met is not punitive to the independent gas producers as initially speculated and we believe that this issue is behind us and that the amendments introduced were approved accordingly. Looking ahead, we expect ongoing dialogue amongst industry participants and irrelevant government ministries on potential change into the gas MET formulation post 2014.
As for price levalization, we expect the Russian government to maintain its present policy of index in the FDS prices at 15% for the next three years, as already announced, supported and confirmed by the ministry of energy. However, I would like to reiterate again, that it is not our internal view that we will revert to an export net back pricing model once the so called market levalization program is formally instituted.
It is my understanding that the energy ministry has stated recently in London, that the government has abandoned the export parity concept but will stick to the indexation as already approved. Competition and market dynamics, as already mentioned will obviously factor into future pricing discussions.
I would now like to discuss the operational and financial results achieved in the third quarter before opening tonight's sessions to questions and answers.
During the third quarter and first nine months of 2012, we invested capital in various exploration, development and processing activities, consistent with our announced capital expenditure program of approximately RUB51 billion. Of which, we've already spent roughly RUB31.3 billion through the first nine months of 2012.
Specifically in the third quarter, we mainly invested capital in the [Usluga] gas fractionation and trans shipment complex and the Yurkharovskoye field which represented about 69% of our total capital expenditures during the quarter and approximately 58% of our capital program in the first nine months of the year, as well as increase in our capital spend at both the East Tarkosalinskoye and [Hanchiskoye] fields as part of our plan to exploit the crude oil layers at these fields.
As for exploration activities, we drilled approximately 30,000 meters or approximately 90,000 feet of exploration activity during the first nine months of 2012, which exploration activity was mainly distributed amongst the (inaudible) and the West Yurkharovskoye license areas, as well as conducted a series of geological surveys at various license areas.
Overall, our exploration activities continued to yield positive results, but no new discoveries were made during the third quarter of 2012. We recently relinquished three exploration license areas thus reducing our existing number of licenses some 38 to 35.
Excluding purchases and inventory movements, we reported a 2.9% decrease in our natural gas production from our core producing fields as compared to the prior year, which was largely attributable to a conscious decision made in the second quarter to increase production at these fields, ahead of the expected transport tariff increase, effective the first of July 2012, and inject these additional volumes into underground storage facilities.
During the first nine months of 2012, our total gas production, including purchases and our share of equity production grew by 5.1 million cubic meters or by 13.7% to 43.7 bcm over the corresponding time period. And a portion of this growth was driven by a 7.3% for a 2.5 bcm increase in organic production from our core producing fields, excluding our share of equity production.
We had relatively strong production growth from our three core fields for the first nine months of 2012 led by the resumption of gas production at both East Tarkosalkinskoye and [Unchoyskoye] fields of 11.6% and 14.4% respectively as well as continued output growth at the Yurkharovskoye field of roughly 5.1%, represented a total growth on our gas production of 2.5 bcm as compared to prior year.
Our purchases of natural gas from (inaudible) gas were relatively consistent period on period, at approximately 4 billion cubic meters and we commenced purchase of the natural gas from [Sabor Holdings], a related party, in January 2012 in the amount of 2.5 bcm. In the third quarter of 2012, we increased our total sales volumes of natural gas by 1.2 bcm or 10.1% to 13.5 bcm as compared to the prior year.
We significantly increased our percentage of natural gas sold to end customers from 57% in the third quarter 2011, to 65% in the current reporting period, which meant that we were able to capture additional retail margins of 97 rubles per 1000 cubic meters for approximately $3 an MCM or an eight fold increase during the current working period.
We also managed to increase our average and customer netback margins quarter on quarter by approximately RUB240 per MCM or by 16.2% reflecting stronger pricing dynamics in the geographical regions where we market our natural gas, as well as benefitting from the across the board 15% average price indexation by the federal tariff services effective the first of July 2012.
We achieved an increase on our end customer sales mix from 62% to 65% quarter on quarter, realizing additional retail netback margins of RUB19 rubles per MCM or by 25%. The change in our natural gas sales mix is important for a number of reasons, but essentially meant that we achieved a higher realized average price, stronger netback realizations and was able to effectively control our production profile by maintaining our customer relationships.
We significantly increased our volumes sold to the Chelyabins region year on year, representing approximately 34% of our end customers volumes sold, which contributed to higher realized average price and improved netback realizations.
During the first nine months of 2012, 59% of our sales volumes were sold to the power sector, 32% to large industrial consumers and the remaining 9% split between regional gas companies at 1%, residential customers at 2% and others at 6%.
Our average relied prices for end consumer sales during the third quarter increased by 15% - 15.7%, excuse me year on year and 15% quarter on quarter, primarily reflecting the FTS gas price tariff increase, as well as our mix of customers.
For exfield or wholesale trader sales, our average realized price increased year on year by RUB229 per gallon of cubic meters or by 16.5% and quarter on quarter by RUB220 per thousand cubic meters or by 15.7%.
We continue to achieve a higher margin differential between end customers and ex field netbacks excluding trading activities and sales to residential customers as compared to prior years, which continues the pricing dynamic trends achieved prior to the economic crisis. Although we cannot be certain these trends will remain consistent or continue to fluctuate period on period.
Our overall average distance to transport our natural gas and consumers averaged approximately 1960 kilometers during the third quarter 2012 which was higher than the prior year by approximately 108 kilometers when relatively consistent quarter on quarter.
The geographical markets representing at least 10% of our sales volumes were Chelyabins, [perm] and Moscow and the [Oraberg] regions. Our total liquid volumes of sales increased year on year by 14.1% or by 132,000 tons and was largely comprised of purchases and inventory movements during the respective reporting period.
In terms of liquid production from our core producing fields, we continue to achieve positive growth in crude oil productions from the East Tarkosalinskoye field sufficient to offset declining liquid concentrations in the field's wet gas stream.
But overall, declines in output from both the [Hunchoiskoye] field consistent with our recent build experience and the reduction in wet gas production at the Yurkharovskoye field resulted in an overall 2.1% decline in our liquids output. Our production output was nevertheless offset by purchases of unstable gas condensate from SeverEnergia's [Zamborsky] field which commenced first phase production in April 2012.
Overall, Yurkharov still represents about 62% of our total liquid outputs form our core producing fields. Stable gas condensate continued to represent the largest portion of our total liquid sales sold for the third quarter 2012, accounting for approximately 59% of our total sales volumes.
We sold 737,000 tons of stable gas condensate versus 658,000 in the corresponding period and 785,000 tons in the second quarter, realized in an average netback price per ton of $441 per ton in the third quarter as compared to $357 per ton in the corresponding period and $339 per ton in the second quarter.
We continue to see an overall strengthening in both the general pricing and average netbacks on cargos delivered in the fourth quarter.
During the second quarter, we dispatched 12 tankers of stable gas condensate for the (inaudible) of which 10 tankers or approximately 605,000 tons were destined to the Asian pacific region.
This significant increase in the volumes sold to the Asian pacific region is a good example of diversifying our product markets when we anticipated and eventually realized that the US markets reduced the volume of imports and stable gas condensate as a result of the significant increase in shaled liquids.
Our liquid hydrocarbon volumes and inventory aggregated 374,000 tons at period end versus 442,000 tons year on year and 402,000 tons at the end of the second quarter. Of which 268,000 tons represented stable gas condensate in various stages of the inventory supply chain.
On a barrel of oil equivalent basis, we had a slight decrease in our total third quarter hydrocarbon production to 94 million barrels of oil equivalent versus 95 million barrels of oil equivalent in the prior [14] period, representing an average hydrocarbon production per day of 1.2 million barrels per day, representing a slight decrease of 1.5% year on year.
There were no major surprises to our operating expenses during the third quarter 2012 relative to the composition and growth of our revenues. Our total operating expenses increased in absolute terms of RUB29.9 billon -- excuse me, RUB22.9 billion to RUB29.8 billion, largely due to an increase in transportation expenses and a significant increase in third party purchase of natural gas, but slightly decreased year on year as a percentage of total revenues.
Operating expenses in the second quarter 2012 aggregated RUB26.8 billion, but was higher as a percentage of revenues as compared to the current reporting period.
One of the most significant changes in our operating expenses for the comparative period was a relative increase in our transportation expenses, which is explainable by the overall year on year and quarter on quarter growth and [none] customer sales volumes by approximately 14% and 4% respectively combined with a higher per unit transport costs as compared to the prior period due to a 7% transport tariff indexation and an increase in the average distance to market.
In addition, during the third quarter, we increased the amount of natural gas purchased from (inaudible) holdings which was zero in the prior period. As well as increased dividend purchase from our joint ventures Sibneftegas to complement our commercial gas market and strategies.
As a result of the factors numbered above our EBITDA margin continued to -- remained robust in the respective reporting period, achieving alive of approximately 48% for the third quarter of 2012, which is consistent with our overall financial guidance.
Moreover, we continue to see high level s of volatility in the currency markets which can positively and/or negatively influence the Russian ruble and US dollar exchange rates and when applied to our US dollar weighted debt portfolio we tend to report wide swings in non cash, Forex gains and losses during the reporting periods.
We adjusted our net profit numbers in margin in an attempt to smooth out these fluctuations and when adjusting in the current period, our net profit margin is also consistent with our financial guidance.
Our balance sheet and liquidity position continued to remain strong throughout the reporting period although we had some movements in our debt working capital positions during the period. Our net debt position decreased from RUB77.8 billion at the end of the second quarter to 67.2 billion rubles in the current reporting period, largely due to repayment of debt according to maturity schedules and an increase on our cash and cash equivalents position.
All of our liquidity and credit ratios improved and remain strong throughout the reporting period and we ended the third quarter with a cash and cash equivalent position of RUB17.5 billion or approximately $565 million.
We ended the current reporting period in a positive free cash flow position of RUB12.3 billion or approximately $400 million and reversed the negative position from the second quarter which was the first negative cash flow position over the past 12 quarters. We will continue to fund our capital expenditure program through internally generated cash flows and have the ability to meet all of our debt obligations and liabilities when they mature or it comes due for payment.
In conclusion, we ended the current reporting period with another very strong financial and operational results as well as a recent announcement to acquire a 49% equity stake in Nortgas at a value accretive multiples to our shareholders.
Unfortunately, the negative market sentiment has trumped the excellent financial and operational results we have achieved. The announcement of the Nortgas acquisition and the very fact that we have delivered everything we said we would deliver according to our strategic guidance.
We have significantly underperformed our Russian peers year to date for both GDRs and ordinary shares as a result of this negative market sentiment and the negative bias on market too slows and rumors. Obviously this share price strategy has been disappointing from senior management's perspective as we collectively continue to hold a notable equity stake in Novatek.
More importantly, however, I want to unequivocally state that our focus has been and will continue to be to create shareholder value for all of our stakeholders as well as to maintain our adherence to sound corporate governance and transparency, and here to our stated dividend policy and continue to focus on cost control and project execution.
We firmly believe that the investment community is misreading and overreacting to the current news flow and market speculations and accordingly, we believe that the current share price does not reflect the underlying value of the company and its future prospects.
That said, perceptions does move markets and the overall perception today is not positive, which ultimately divorces our equity price from its true underlying value. As a result, we will continue to closely monitor this negative price share trend in relations to our previously announced share buyback program.
I would also like to strongly reiterate again that we are very confident that our commercial marketing gr4oup will be able to successfully market all of our current and future natural gas production, including the volumes attributable to the interal contract expiring in 2016 and we are currently negotiating new long term sales and purchaser contracts as well as targeting new regional markets.
We have demonstrated many times in the past that we understand the dynamics of the Russian domestic gas market, and over the years we have built a very credible reputation as a reliable supplier of natural gas. We have an enviable track record to prove this point.
In retrospect, we have delivered what we outlined in our financial and operational guidance to the first 12 months of 2012. We have grown our liquids and natural gas production. We have maintained a strict focus on cost control and project execution. SeverEnergia [Samborsky] field's initial production and the Yurkharovskoye's fields fourth phase were both delivered on time and within budget. The [Useluka] project is now gearing up for operational line fill, prior to commencing and processing and the crude oil programs at the East Tarkosalinskoye and on [Chaiskoye] field are now producing.
We completed the front end engineer and design phase on the [Lamol] LNG project as promised and we are now working towards FID and we have delivered on a series of other commitments by working closely with the Russian government. We have begun training natural gas on the European market in October to support future trading activities and start building a marketing presence. We have raised our annual dividend every year since we went public despite being considered a high growth stock.
We added constructive input into the recent gas MET discussions and the preliminary results announced subject to the approval confirmed our viewpoint as stated during our first quarter conference call that the changes to gas MET rate would not be punitive to the independent gas producers.
And finally, we are very excited about the Nortgas acquisitions and its potential to complement our near term natural gas and gas condensate production and growth as well as to immediately accrete shareholder value.
I would like to sincerely thank all of our valued shareholders who are participating in tonight's conference calls and encourage everyone to look beyond the present negative sentiment and focus on the company's strong business fundamentals and excellent track record of delivering financial and operational results. We are keenly focused on things that we can control, rather than things that are out of our control. We are poised for growth in the business and we believe that we have the requisite management team in place to deliver on our strategic objectives.
I would like to end this portion of the conference and now open the session to questions and answers, thank you very much.
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Questions and Answers
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Operator [1]
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Thank you. (Operator instructions). And we'll take our first question from Oleg Maximov, Senior Analyst Oil and Gas Sberbank CIB. Please go ahead.
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Oleg Maximov, Sberbank CIB - Analyst [2]
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(interpreted) So the first question is, which is the additional gas volumes that the company is planning to (inaudible) in terms of the sales within the contracts that it is planning to conclude before the end of the year.
The second question, do you expect any dramatic increase of the [amity] gas for the gas condensate for the next two years and what kind of a discussion is kind of taking place with respect to this particular topic?
And the third question, what is the size of capital spending that the company is planning for next year? It does include four year [harosky] field and separately for the (inaudible) plant? Thank you.
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Unidentified Company Representative [3]
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(interpreted) So, in terms of your first question, we do see certain trends in the way the market is evolving and that is simply following the market trend domestic gas market because (inaudible) as is customary with the world companies are holding held, we don't -- (technical difficulty) in the domestic market and (technical difficulty) grow slightly faster than the amount of our production. So, all of our production as well as the additional acquisitions are supported by contracts.
And it is a very important trend that Novatek started pursuing within the strategy of sales, which is switching away from just supplying major consumers under the long term contracts, but additionally also going for the regional sales specifically because you are aware that we supply the entire Chelyabins region, we can for quantity this year of the [pier] consumption and so currently do the balance that we see evolving into the next year, our regional strategy will encompass about 40% within our total supplies -- again, the existence of the long term contract portfolio, which accounts for approximately 40% as well.
We feel ourselves extremely confident in the market and very grateful to our current partner in the person of [Interau], which is choose a very long term approach three years ahead before our contract expires, it looks at the way the supplier landscape is going to change and so it's going to be quite easy for us to maneuver around and so we don't expect any risks to happen for us.
So, if the answer is in (inaudible) as far as MIT tax for the gas condensate is concerned, neither here we expect anything negative to happen in terms of the government trying to consider any significant growth in terms of the taxation, no other kind of a taxation burden is being considered with respect to the associated petroleum gas for the oil companies that's are -- we are submitting our own proposals in line with the possibility of (inaudible) cyclical gas and we believe that it will demonstrate growth, but not a significant one and within the utilization packages.
As far as capital investments are concerned, they're going to be (inaudible) excluding the mild LNG project approximately at the level of this year. We're practically currently complete major investments of which we've done during the past few years into the Yurkharovskoye field, and with respect to specifically [Ousluga] project, this year we will finish all the construction work and right after the new years we'll start testing and also any shale mass supply the product in the first quarter and would commission this product fully into operations. Thank you. Next question.
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Operator [4]
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We'll take our next question from Karen Kostanian from Bank of America. Please, go ahead.
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Karen Kostanian, Bank of America - Analyst [5]
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(interpreted) So the first question was that - the first question was about the buy back, what is the current plan with the buyback and considering the recent market events or trends, does the company plan to change its buyback plan? Will it be -- what kind of money already has been spent in this project and if there are any plans imminently to be changed for the buybacks, what those would be.
And the second question was about the Nortgas and because they currently -- [Gasbrak] is taking all of the (inaudible) are you expect this to change? And if so, when?
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Unidentified Company Representative [6]
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(interpreted) So as far as buy back is concerned, you know that we have made an announcement and we have identified this as a potential project but so far, we haven't undertaken any activities within this program. But if we were to do anything, we would definitely inform -- notify the market.
We're not going to change the amount of buyback and possibly because of an acquisition of Nortgas and in the first place because of very often unpredictable response of the market to the ratings of our shares because of this or that announcement, we didn't undertake the buy back, but we're thinking about it and we are always ready to act on these plans within the specified advance.
Now, with respect to Nortgas, a big share of gas has been taken by gas from some gas has been sold by Nortgas directly into the market and today we will have reached in extending with [gas brawn] about the pricing policy (inaudible) Nortgas and as of January 1st we will be taking the amount of gas which corresponds to the ratio of our efficient (inaudible). Next question please.
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Operator [7]
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We'll take our next question from Tatiana Boroditskaya from UBS. Please, go ahead.
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Tatiana Boroditskaya, UBS - Analyst [8]
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(interpreted) There are two questions, the first one, could you please comment on the situation with respect to the [axe contra] gas on contract with NBB company from Germany when you are going to start supplies. And the second question, is Novatek planning to issue euro bonds before the end of this year? And planning to do so also next year?
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Unidentified Company Representative [9]
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(interpreted) Mark Gyetvay, his presentation mentioned that we have signed a trading contract worth about two billion of supplies a year. The delivery started as October 1st this year so we're working within this contract second months in a row. It is very important aspiration for us to be able to work in the European market considering the future of PML LNG project and everything on this particular micro-account is taking place fully compliant with this (inaudible).
Now as far as the euro bonds are concerned, we are planning to issue them. Right now there is a board of directors in session which is going to endorse this issue and this place and then depending upon the market environment, we will see what should be the volume and approximately $1 million worth, or maybe slightly more than that. Next question, please?
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Operator [10]
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We'll take our next question from Max Moshkov from UBS. Please, go ahead.
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Max Moshkov, UBS - Analyst [11]
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(interpreted) Three questions. The first one, because of Yurkharovskoye filed achieving its full capacity in production 36 million cubic meters a year, what is the volume of condensate that you are planning to (inaudible) against the maximum production out of Yurkharov during the next three years, and what is going to be the (inaudible) in many years that are going to maintain that at Yurkharovskoye field?
The second question is about the free cash flow. You stated that because of a possible decline in the need to repeat capital investments since some of the projects are going to be completed, do you expect a considerable increase in your free cash flow? Because of that, I don't have any plans to reconsider your dividend policies so as to raise the (inaudible).
And third question, with respect to the Nortgas pricing quality, understanding that you were considering a raise to the acquisition prices, yes, from Sibneftegas. Should we, in our analytics, take into the account the pricing figures and you wanted gas from Sibneftegas when basically creating any outlook projections of Sibneftegas specifically?
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Unidentified Company Representative [12]
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(interpreted) So, I should say that despite the fact that I believe I know very well all of the figures which describe the Novatek's performance. However, I'm not in a position to give you the exact figure of the production of the company of Yurkharovskoye as far as the condensate is concerned.
At my fingertips I can definitely state that right now we are having about 8000 tons of daily output from the field in terms of the condensate production and the commissioning of the compressor station and within the next 18 months the commissioning of the second compressor station is exactly aimed at achieving the ability to maintain this production plateau as long as possible.
Another thing that the investors should know about Yurkharovskoye field, we're not finishing exploration activities there as well as considering how we could best improve the development plan for this field so as to achieve the longest possible plateau reduction. And in the first place, we definitely focused upon the condensate component in the gas amongst other things. We run exploration activities not only for the [burginsky] which we are currently developing but also for the (inaudible) and Jurassic. So, this is a continuous process and we're doing our best to achieve the maximum benefit from this field.
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Unidentified Company Representative [13]
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(interpreted) And as far as the [dead end] policy is concerned, we are not participating to reconsider it. I know it would say that it corresponds to the market expectations because the company have to develop it in the first place and invest into additional production volumes, trying to maximize that as best as possible any potential increase in its profitability.
Our dividend policy is not a very small one, which is develop 30% from what the current company is achieving in terms of profit, and so capital investments definitely have to be take into account. You mentioned Yurkharovskoye fiend and the [Ustaluga] project, but apart from that we are expanding our [plusky] gas processing point and next year we shall commission it to operation, conditional processing to the ball-park of 6 million tons.
We are expanding our condensate pipeline so that take into account not only SeverEnergia, but also taking into account the future production growth volumes from Nortgas to guarantee the maximum possible throughput for all these additional volumes and to achieve the most optimum processing at the [polufsky] plant with subsequent -- additional processing at -- [stulgart] thank you. Any question.
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Unidentified Company Representative [14]
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(interpreted) And in answer to your third question, which was whether one can compare the pricing policy or acquisition form the gas that will start taking place in Nortgas as of January 1st was significant, I would say yes, it can be compared that way. Next question, please.
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Operator [15]
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And we'll take our next question from Ildar Khaziev from HSBC. Please go ahead.
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Ildar Khaziev, HSBC - Analyst [16]
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(interpreted) The question was about the growing prices for the end users in the third quarter. What was the effect on the changing sales structure upon the pricing -- was it one? But I would like to find out what would be the ratio in this (inaudible) and whether it could generate additional effect in the future and should it be connected in any way to deliveries of gas into the regions which require a larger lag at least in terms of statistics.
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Unidentified Company Representative [17]
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(interpreted) I guess in this particular case, one should think not about pricing growing forward from the end users but about a netback growing from the gas which we generate when [ton] gas to an end user and you definitely could see in our report that we are able to enjoy slightly bigger profitability from selling gas specifically to an end users as Mark Gyetvay mentioned this year we witnessed growth in terms of the share of end user in the overall sales portfolio and I would say that one could expect significant growth as well during 2013. I mean in the numbers of the end users which count for our sales.
And one should also take into account two factors, the first one is that the government through a specific target service annually has been trying to achieve equal profitability between name cells regent -- with respect to the point of the production many said that the netback from closer located end users compared to the more remotely located ones.
So, this equalization has been a continuous process. So, we used to say two years ago, well, its three years ago that we can have a much bigger character with the same kind, approximately without the supplies.
And the second important thing which definitely heard and we want you to bear this in mind, specifically that the government is talking about the domestic gas prices growing and the growth of the (inaudible) is expected to take place at a different kind of pace considering what the government announced over the next year, the transportation time growth is going to be also equal to the inflation. Which, in its turn, would enable us to achieve a better netback profitability specifically in the case of end users. Next question.
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Operator [18]
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We'll take our next question from [Paval Soriken] from Morgan Stanley. Please, go ahead.
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Paval Soriken, Morgan Stanley - Analyst [19]
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(interpreted) Could you possibly share with us your expectations of the long term prices that you've used in your domestic business planning for 2015, '16, '17? What kind of scenario do you follow and if it is possible, it would be great if you could share with us your views in respect to the pricing policy in the case of Sibneftegas, what is the kind of new standard we should expect against the domestic prices that (inaudible).
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Unidentified Company Representative [20]
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(interpreted) So in terms of the first question, with respect to the domestic promises which the company is putting into its business plan, we are relying upon various terms and conditions that we achieve through the negotiated [purses of] consumers as well as set the requisites that the gas market place, all of the participants in the gas market are receiving from the Russian government.
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Unidentified Company Representative [21]
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(interpreted) And as far as the second question, and no discount when requiring the (inaudible) is used. It is all taking place according to the market price and according to the formula with was pre agreed with SeverEnergia and which is correlating with the market leveled with the right prices with the deduction of the constant -- the transportation expenses that are incurred in such duration. Next question please.
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Operator [22]
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We'll take our next question from [Vaskaslav Shimen] from Deutsche Bank. Please, go ahead.
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Vaskaslav Shimen, Deutsche Bank - Analyst [23]
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(interpreted) So two questions. The first one is about the general approach to managing the company's financial liabilities. Obviously the share of financial debt that is subject to repayment in 2013 of which a part is going to be refinanced and which one's going to be repaid using your own money -- particular taking into account the taxes and as I understand the amount of the acquisition of Nortgas. It's going to be fully funded by the following.
And in connection with this, do you have any top look indicator of the net financial leverage that you have had in 2013, the one that you can share with us?
The second question, a specifying question. Could you please confirm whether I understood correctly that the amount for -- in general the amount of production for 2013 is 80% covered by already existing contracts we've cut.
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Unidentified Company Representative [24]
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(interpreted) Mark Gyetvay will be answering the first question and Mr. Mikhelson will have the second.
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Mark Gyetvay, Novatek - CFO [25]
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In regards to the deposition, I think it's extremely important to understand first and foremost that we generate a series of cash flow. The cash flow is then used in terms of considering what our dividend policy would be, how much we pay internally generated cash flow into the operations as part of the capital expenditure program, and lastly to service our debt.
As you can see, in our presentation on page 40 of the presentation material, we have outlined a debt maturity profile that essentially says we have approximately 19 billion rubles of debt that's expected to be due over the same corresponding period from nine months to nine months numbers in the upcoming year.
I mean, we have paid back -- we paid back debt as a maturity schedule. We have actually paid back a series of debt before the majority schedule as noted in the second quarter. In terms of incurring additional debt, we have a financial policy in place.
The financial policy is essentially available on our presentation material in our website, etc. that essentially says a company targets a debt to EBITDA number of one time, we have absolutely adhered to that particular criteria and if you notice, inside the financial statements, in our management discussion and analysis, or MD&A, you can actually see that a result of the cash flow generation, the repayment of debt, et cetera. that all of our liquidity and/or credit ratio metrics have improved.
We don't have per se a target range. What we try to look at and say that it's probably, as Mr. [Nicholson] alluded to earlier, it's probably unrealistic to assume in the near term that we will be reverting back to a net cash position as a result of the cash flow generation.
We have a series of investments that we anticipate to make over the next five or so years to meet the objectives we outlined in our strategy presentation, so the debt position will be more or less balanced between what we need to spend in terms of capital expenditures over this corresponding period, as well as what is the expected debt maturity profile as you see outlined on our presentation material and then whatever is available left for dividend distribution.
But there is really no set guidance that we provide in terms of whether or not we'll maintain a 20% debt to equity ratio et cetera. We have not done that. We basically looked at what our maturity profile looks. And as you can see on that slide, it's relatively flat and that's our goal.
Our goal is to maintain a relatively consistent level of debt on a balance sheet where we have enough cash flow to service a debt, meet our obligations, make our investments into our capital expenditure program and hence pay dividends.
In terms of the Eurobond, we are looking at acquiring additional debt to find this acquisition, but I think the most important thing in terms of this acquisition, say relatively to -- relative excuse me to the SeverEnergia as example, Nortgas is a cash producing asset today. And it's a cash producing asset, which allows us to immediately be able to accrue cash flow to our balance that we can use to eventually service debt. And that's an important distinction.
And we believe that given the additional balance of debt that we anticipate as a result of place the European -- Eurobond on market conditions will not jeopardize those financial metrics and the debt to EBITDA number as outlined, and you can see that reflected in a credit rating, and also you can see that reflected in the announcements made by the credit rating agencies as a result of this transaction.
I'd like to turn the question over now to Mr. Mikhelson.
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Leonid Viktorovich Mikhelson, Novatek - CEO, Chairman -Management Committee [26]
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(interpreted) I guess that in my first response I was not very articulate and that is why a bit of confusion happened. (Inaudible) for 2013 the whole gas we plan to produce or to additionally acquire has been contracted and I quote two figures to you which we added up and ended up having 80% figure and that is without our strategy it was -- that's where I told you that recently we have started working on the regional sale strategy to date and regional supplies and the over of the sales portfolio account 40%.
While the long-term contracts between 5 to 15 years, constitute the share of approximately 40%. But the whole on the 2013 volume definitely has the (inaudible) already. Next question please?
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Operator [27]
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We'll take our next question from [Alex Popovich] from Wood Mackenzie. Please, go ahead.
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Alex Popovich, Wood Mackenzie - Analyst [28]
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(interpreted) The question was about more additional specification. Once the Nortgas deal is finished, which will be the (inaudible) rate which will be applicable to it? Like in the case of the independent producers and like in the case of (inaudible) and this is going to be like in the case of guthrum, will it be possible in some day in the future for this rate to be changed like in the case of independent gas for two.
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Unidentified Company Representative [29]
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(interpreted) Mark Gyetvay, in his presentation, he referred to a particular point saying that the Nortgases [con] proper structure for the (inaudible) rate to be like in the case of the independent producers and not like in the case of (inaudible). Next question please.
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Operator [30]
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We'll take our next question from Max Moshkov from USB. Please go ahead.
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Max Moshkov, UBS - Analyst [31]
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(interpreted) The question is about the exact figure for the production for next year in absent numbers considering the- taking into account the exhibition from the independent gas producers and the exact capital investment figure we said it was going to be in line with the current period but would be more specific in terms of these figures would we'd like.
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Unidentified Company Representative [32]
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(interpreted) We've also touched upon this particular point in our presentation, the production in [mound] growth, taking into account the Nortgas acquisition will be corresponding to the production growth's biggest this year, but to give any specific figures I believe is not very appropriate, exactly like it's very difficult to make and exact growth by a month during the 2013 season in terms of what's going to be a winter temperature, how cold it's going to be and that is the overall fluctuation between our presentations. We have stated that we are very much targeting to encourage the share of end users in our portfolio. The biggest is the share of end users (inaudible) that would make us more susceptible to the risk of all the seasonal temperature changes.
And because of this consideration in our next year balance, because of the end user share, we also anticipate a greater gas, much greater than this year to be injected underground in order to maintain the balance -- the landscape in terms of the temperature changes and the volumes that we are going to deliver.
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Unidentified Company Representative [33]
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(interpreted) And additionally, so as to avoid any [was] outstanding, when I said that approximately the same growth as this year, I meant the percentage of this growth.
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Unidentified Company Representative [34]
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(interpreted) And you also refer to the capital investment figure, the amount of capital investments, without taking into account investments into the [yamalavenchi] project will approximately be the same, covering the above mentioned facilities and project, I shall not repeat myself. Including the development of the transportation infrastructure and the additional [volumes for the] processing. And the [Buroski] gas processing plant is going to be exactly what we are having in 2012.
Next question.
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Operator [35]
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We'll take our next question from [Arton Konsheen] from JP Morgan.
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Arton Konsheen, JP Morgan - Analyst [36]
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(interpreted) Here two questions, the first one is about Nortgas. You stated that you are going to take 100% of what Nortgas is going to produce in the third processing. Does it mean that you will end up having 2% of their production? And the second question about the [Yamal] LNG in your present news strategy and the effect that local currency can have upon the MAT operation expenses. Do you have an understanding about the extent that the ruble exchange rate may send to your plant (inaudible)?
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Unidentified Company Representative [37]
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(interpreted) As far as the acquisitions of gas condensate for subsequent processing for Nortgas are concerned, we [haven't] already proven and established a regiment in the case of SeverEnergia where by exactly like the case with Nortgas, we have the gas from structures will get together with Novatek. So, exactly the same kind of both a market formula is going to be applied to that (inaudible).
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Unidentified Company Representative [38]
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(interpreted) And with respect to strategy, we are also familiarizing ourselves with the projects which are being reviewed to the new LNG in [strada], we do not see any strong degree of effect, which would force one to increase the general spending into the amount LNG project because of the ruble exchange rate. We've completed the fee stage and we're running attendance to inquire the basic equipment, the EBC contract under for the construction of (inaudible) view, our estimates remain exactly the ones that we've announced a year ago.
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Operator [39]
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(Operator instructions). Gentlemen, we have no further questions in the queue.
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Unidentified Company Representative [40]
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Very well, I'd like to conclude --
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Unidentified Company Representative [41]
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(spoken in foreign language)
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Unidentified Company Representative [42]
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Hold on a second.
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Leonid Viktorovich Mikhelson, Novatek - CEO, Chairman -Management Committee [43]
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(Interpreted) Mr. Mikhelson would like to express his appreciation to all of the participants of this telephone conference. And Mr. Mikhelson agrees 100% with what Mark Gyetvay said that we do not think that considering the current stock ratings that the company is valued in the way that rating deserves. And the Novatek management sometimes finds it extremely strange that the rating indicators for the company stock are affected by different statements made about eh probability of various events taking place.
And the management board of the company, as well as the senior management of Novatek to does everything necessary or invests they have been and for these strategic plans and performance indicators which we disclosed to the investors community to be fully met and achieved by the company.
Quite possibly some negative sentiment can be explained by the fact that we are not sharing all of the figures, as well as the information that one should like to learn in terms of what we think in figures in terms of what will happen to the company two or three years time.
And we are very serious about words we announced, the statements that we make considering background and the history since IPO day. It shows that we are doing the best we can, maximum efforts we applied so that the strategic plan covering the period of up to 2020 that we shared with the investment community last year will do everything in our powers in order to achieve it 100%. Thank you very much for your participation and attention.
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Operator [44]
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That will conclude today's conference call. Pardon me.
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Unidentified Company Representative [45]
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Thank you.
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Operator [46]
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That will conclude today's conference call, thank you for your participation ladies and gentlemen, you may now disconnect.
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Editor [47]
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Portions of this transcript that are marked (interpreted) were spoken by an interpreter present on the live call. The interpreter was provided by the Company sponsoring this Event.
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