Gazprom Neft · RUS:SIBN
Gazprom Neft — Q1 2012 Earnings Presentation
26 slides from Gazprom Neft's earnings presentation, May 22, 2012
Slide 1: IFRS Financial and Operating Results for First Quarter 2012
IFRS Financial and Operating Results for First Quarter 2012 May 22, 2012
Slide 2: Agenda
Agenda Highlights, Macro Alexey Yankevich Member of the Management Board, Environment, CFO Financials Vadim Yakovlev Upstream Deputy Chairman of the Management Board, First Deputy CEO Downstream Vladimir Konstantinov Head of Economics and Investment Department, Refining and Marketing Division
Slide 3: Disclaimer
Disclaimer This presentation contains forward-looking statements concerning the financial condition, results of operations and businesses of Gazprom Neft and its consolidated subsidiaries. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements
Slide 4: Strong financial performance while advancing on strategic goals
Strong financial performance while advancing on strategic goals 1Q 2012 Financial performance: • Revenue: RUB 278 bln (+20% Y-o-Y) • EBITDA*: RUB 79 bln (+11% Y-o-Y) • Net Income: RUB 48 bln (+21% Y-o-Y) Continued operational progress: • Production up 6% Y-o-Y • Refining volumes up 8% Y-o-Y • Pr
Slide 5: Macro Environment
Macro Environment Stronger prices, demand and ruble 55
Slide 6: Crude prices continue to rise; taxes and market conditions favor Upstream margins
Crude prices continue to rise; taxes and market conditions favor Upstream margins Crude & Product prices Netbacks, $/bbl 118.6 109.4 105.4 26.50 26.46 23.82 Crude Oil export duties, USD/tonne Increase in global crude prices… Excise Tax on petroleum products, RUB/tonne …as domestic product prices
Slide 7: Upstream
Upstream New projects on track, continuing resource base extension, efficient development of legacy fields 77
Slide 8: Upstream highlights
Upstream highlights Key events: Legacy Increased horizontal drilling activity fields Implementing real-time monitoring at horizontal drilling projects Implementing multistage hydrofracturing of horizontal wells Increased initial production of new wells at Priobskoye field to 47 tonnes/day (+
Slide 9: Seasonal 1Q production decline is due to reverse in rest of year
Seasonal 1Q production decline is due to reverse in rest of year Group hydrocarbon production 1Q12 vs 1Q11 reconciliation +6% -2% Hydrocarbon production (toe) decreased 2% Q-o-Q due to Hydrocarbon production increased 6% Y-o-Y due to: • Seasonal decrease in drilling activity • Consolidation of O
Slide 10: Efficiency and optimization efforts deliver industry-leading cost control
Efficiency and optimization efforts deliver industry- leading cost control % change in opex/boe 1Q 2012 Y-o-Y, RUB/boe % change in capex/boe 1Q 2012 Y-o-Y, RUB/boe Reduced opex/boe due to: Moderate growth of capex/boe due to: Energy efficiency gains Faster drilling times • Installed energy effic
Slide 11: New technologies will sustain production and increase returns at mature fields
New technologies will sustain production and increase returns at mature fields Base cost Base flow Gazprom Neft RUB 50-70 mln 30-50 tonnes/day practice Vertical and directional drilling Increased well cost Increased well flow 70-200 Historical: 2/month RUB 70-90 mln tonnes/day Current : 7/month (+0-
Slide 12: New technologies raising production at Priobskoye field
New technologies raising production at Priobskoye field Priobskoye field production, MTonnes/day Priobskoye field development Units Tonnes/day forecast Raised initial production rates by implementing new hydrofracturing technologies (+36% Y-o-Y) Introduced advanced injection techniques to mainta
Slide 13: Downstream
Downstream Premium channel sales increase as investments improve product quality in industry-leading portfolio 13 13
Slide 14: Refinery modernization raises fuel quality, drives continued premium sales growth
Refinery modernization raises fuel quality, drives continued premium sales growth 1Q12 Key Events: 2012 Major Goals: Refining Stream FCC gasoline and diesel Refining volumes up 8% 1Q hydrotreaters at Omsk, increasing high- 2012 over 1Q 2011 quality fuel production Yaroslavl started production
Slide 15: Refining netbacks decreased, but reversed in April
Refining netbacks decreased, but reversed in April Gazprom Neft crude mix Gazprom Neft average netbacks (MMTonnes) $/bbl Crude to CIS & Russia Crude Exports Refining Refining cover increased from 77% to 78% Y-o-Y Crude purchases increased by 23% 15 15
Slide 16: Increased refining throughputs and higher-value product yield
Increased refining throughputs and higher-value product yield Gazprom Neft refining throughput Gazprom Neft gasoline and diesel yields (MMTonnes) (MMTonnes) Gasoline Diesel NIS Slavneft Moscow Omsk Increased throughput at all Russian refineries Class 4 & 5 gasoline production increased 260% due
Slide 17: Continuing development of domestic and international premium channels
4 Continuing development of domestic and international premium channels Acquired 6 stations Opened refueling complex 1Q11 vs. 1Q12 premium Market in St. Petersburg at Sheremetyevo sales growth share Retail Acquired 6 stations, rebranded 38 Lubricants Retail metrics Signed marine lubricants productio
Slide 18: Financials
Financials 21% Net Income Growth Y-o-Y 18 18
Slide 19: Production growth and strong price environment drive positive financial trends
Production growth and strong price environment drive positive financial trends Revenue grew by 2.2% Q-o-Q due to increased oil prices, partially offset by lower crude oil sales Revenues volumes RUB bln Revenue grew by 19.8% Y-o-Y due to higher prices for crude oil and petroleum products and incr
Slide 20: EBITDA reconciliation 1Q12 vs. 1Q11
EBITDA reconciliation 1Q12vs.1Q11 EBITDA 1Q 2012 vs 1Q 2011, RUB mln EBITDA reconciliation 2011vs.2010 (13,782) (1,879) 27.374 3.407 1,355 578 79,261 (13,293) 1,052 2.816 71,632 18.320 9.911 Changes in Net Price = 1 828 61.721 60.942 1Q 2011 Price Export FX Transport Mineral Crude oil Refining & Cos
Slide 21: EBITDA reconciliation 1Q12 vs. 4Q11
EBITDA reconciliation 1Q12vs.4Q11 EBITDA 1Q 2012 vs 4Q 2011, RUB mln (3,177) (2,148) 5,979 2.301 79,261 77,312 5.428 (7,160) (1,325) 519 1,532 7.870 18.320 Changes in Net Price = -1 078 69.442 60.942 4Q 2011 Price Export duty FX Transport Mineral Crude oil Refining & Decrease in Share 1Q 2012 rate e
Slide 22: Strong free cash flow generation
Strong free cash flow generation Cash flow reconciliation 1Q12 RUB bln Bank deposits *Includes changes in investments in associated companies and proceeds from such investments 22 22
Slide 23: Higher investment reflects greenfield project developments, refinery upgrades, and rebranding
Higher investment reflects greenfield project developments, refinery upgrades, and rebranding Investments (RUB mln) Investment activity declined Y-o-Y due to a decrease in acquisition of non- controlling interests in subsidiaries (the non-controlling interests in NIS and Sibir Energy were acquired i
Slide 24: Continued improvements in balance sheet and debt portfolio
Continued improvements in balance sheet and debt portfolio Debt ratios and maturity mix Debt by currency Net debt/EBITDA 0.6 vs. target < 1.5 Reduced average interest rate to 3.34% Y-o-Y Increased share of short term debt to 24% in Reduced average debt maturity by 5% Y-o-Y 1Q12 due to amorti
Slide 25: New "60-66" duty regime has both positive and negative effects
New “60-66” duty regime has both positive and negative effects New tax regime Q-o-Q effect in 1Q2012 reconciliation, RUB mln Positive effect: Lower crude export duty Lower light products duty Lower gasoline duty Higher domestic price for summer diesel Negative effect: Higher heavy products
Slide 26: Questions & Answers
0 cazpnom NE F T Questions & Answers