Alliance Oil Company Ltd
Interim report for the quarter and nine months ended 30 September 2012
Alliance Oil Company Ltd 21.11.2012 07:30 --------------------------------------------------------------------------- Quarter ended 30 September 2012 -- Revenue of MUSD 904.3, up 14% from Q3 2011. -- EBITDA of MUSD 214.0, up 23% from Q3 2011. -- Profit before tax of MUSD 169.9, up 102% from Q3 2011. -- Profit for the period of MUSD 132.0, up 109% from Q3 2011. -- New exploration license in Timano-Pechora. -- First phase of exploration and production joint venture with Repsol completed. Nine months ended 30 September 2012 -- Revenue of MUSD 2,536.6, up 12% from nine months 2011. -- EBITDA of MUSD 564.9, up 24% from nine months 2011. -- Profit before tax of MUSD 376.7, up 37% from nine months 2011. -- Profit for the period of MUSD 290.8, up 39% from nine months 2011. Subsequent events -- Tomsk region operations expand through acquisition of a gas company -- 2P reserves increased to 760 mboe and 3P reserves to 1,256 mboe. -- Alliance Oil Company won tender for 5 exploration licenses in Timano-Pechora. Quarter Quarter Nine months Nine months ended ended ended ended 30 September 30 September 30 September 30 September 2012 2011 2012 2011 -------------------------------------------------------------------------------- Crude oil production, 53,315 45,562 54,413 44,455 bopd Refining volume, bopd 84,571 77,452 79,325 73,925 Revenue, MUSD 904.3 794.4 2,536.6 2,257.3 EBITDA, MUSD 214.0 173.9 564.9 454.2 Profit before tax, 169.9 84.1 376.7 274.1 MUSD Profit for the period, 132.0 63.1 290.8 209.1 MUSD Basic earnings per 0.72 0.36 1.62 1.18 share, USD Diluted earnings per 0.66 0.33 1.53 1.11 share, USD Dear Shareholders, The favourable pricing environment in domestic markets and attractive export netbacks supported by stronger seasonal demand contributed to the Company's strong performance in the third quarter of 2012. The downstream segment's operations delivered record production and sales volumes while upstream production was stable in the quarter. The Company's average daily oil production amounted to 53,315 barrels and the refinery's average daily throughput was 84,571 barrels in the third quarter of 2012. Consolidated EBITDA increased by more than 60% quarter-on-quarter primarily due to higher export netbacks for crude and oil products, better domestic prices and greater sales volumes. Consolidated net income grew significantly quarter-on-quarter, taking the foreign currency swap revaluation and exchange gains into account. In the upstream segment, stable production volumes with higher export prices resulted in EBITDA growth quarter-on-quarter. The Company drilled a total of 21 new wells in the third quarter. The Company has expanded into the Russian gas business through the strategic acquisition of a company holding two licenses with sizable 2P gas reserves and attractive resource potential in the Tomsk region. Moreover, the Company has added 6 new exploration licenses in Timano-Pechora with significant prospective resources. The successful acquisition activity increased the Company's 2P reserves by 17% to 760 mboe and total 3P reserves reached 1,256 mboe. The newly awarded licenses add to Alliance Oil Company's exploration portfolio and extended the additional resource base in Timano-Pechora by about 500 mboe. In the downstream segment, oil product revenues and EBITDA increased quarter-on-quarter due to higher export net prices and solid domestic sales. The increased capacity of the Khabarovsk refinery further promoted the operational performance of our distribution network with higher volumes in all segments, including the rising bunkering activity. The scope of the refinery modernisation program was expanded and adjusted to reflect growing demand for oil products in the Russian Far East. Currently, the project progress is estimated at above 95% in engineering and procurement, and 75% in construction works. In 2009-2012, the Khabarovsk refinery launched 7 new units with upgraded utilities, infrastructure and offsites. The refining capacity has been increased to 90,000 bopd. In the third quarter of 2012 the balance sheet position of the Company remained solid. The total debt to EBITDA ratio increased to 2.4, whilst net debt was flat compared to the previous quarter. Outlook So far this quarter, the macro environment gives rather positive signals. The domestic markets demonstrate stable demand and an overall favourable pricing situation. However the traditional low season factors are visible. International crude oil prices remain comfortably above USD 100 per barrel with customary volatility for export netbacks. In the upstream segment, the Company is expanding its position in the Russian gas market and integrating the recently acquired licenses into the Tomsk operations, to realize both synergies and immense exploration potential. The new exploration licenses in Timano-Pechora add attractive prospects to our upstream portfolio to support reserve and production growth. With recent acquisitions, the Company plans to further benefit from its extensive knowledge of the region and existing facilities. We are now in the process of completing the Kolvinskoye field evaluation and development plan for increased oil extraction. Consequently, Alliance Oil is forming the basis to extend its history of production and reserve growth, which will be reflected in our updated strategy for the upstream segment. The joint venture with Repsol has started operations, and we are combining our efforts and resources to reach mutual objectives. In the downstream segment, to respond to recent market development and anticipated trends, the refining capacity will be further increased to 100,000 bopd in 2013. A new hydrocracker and other hydroprocessing units are expected to be launched into test operations in the third quarter of 2013. The first crude supplies to the refinery by the ESPO-pipeline are expected in the beginning of 2014 with 40,000 bopd switched from railway shipments. The pipeline supply capacity is scheduled to gradually increase to reach 100,000 bopd by 2015. We expect that improved product yields and decreased transportation costs for crude oil supplied through ESPO will lead to long-term improvements in downstream economics. The upstream guidance for 2012 remains an average daily production of 54,000 barrels. The downstream volume guidance for 2012 is an average of 77,000 barrels per day. Arsen Idrisov, Managing Director Conference call Date: Wednesday, 21 November 2012 Time: 10.00 CET To participate in the conference call you may choose one of the following options: Telephone Dial one of the following numbers a few minutes before the conference starts: Location Local Number Toll-Free Russia 810 8002 198 4011 Sweden +46 8505 20278 0200 125 058 United Kingdom +44 20 7190 1595 0800 358 5256 Conference ID: 4576748 Web The conference call will be webcasted live at www.allianceoilco.com. A replay of the conference call will be available at www.allianceoilco.com. For further information: Arsen Idrisov, Managing Director, Alliance Oil Company Ltd, telephone +7 (495) 777 18 08. Eric Forss, Chairman of the Board, telephone +46 8 611 49 90. Alliance Oil Company Ltd is a leading independent oil company with vertically integrated operations in Russia and Kazakhstan. Alliance Oil Company has proved and probable oil reserves of 760 million barrels of oil equivalent and downstream operations that include the Khabarovsk refinery and the leading network of gas stations and wholesale oil products terminals in the Russian Far East. Alliance Oil Company's depository receipts are traded on the NASDAQ OMX Nordic under the symbol AOIL. News Source: NASDAQ OMX 21.11.2012 Dissemination of a Corporate News, transmitted by DGAP - a company of EquityStory AG. The issuer is solely responsible for the content of this announcement. DGAP's Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Media archive at www.dgap-medientreff.de and www.dgap.de --------------------------------------------------------------------------- Language: English Company: Alliance Oil Company Ltd Sweden Phone: Fax: E-mail: Internet: ISIN: SE0000739286 WKN: End of Announcement DGAP News-Service ---------------------------------------------------------------------------
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