KazMunaiGas Exploration Production: CAPEX Up 12% in 2017
JSC KazMunaiGas Exploration Production (“KMG EP” or the “Company”) held its regular Board of Directors (“the Board”) meeting. During the meeting, the Board recommended a dividend payment on 2016 earnings, approved the revision of the 2017 capital expenditure plan and approved increase of processing fees starting from 1 April 2017.
2016 dividend recommendation
Based on 2016 results the Board has recommended a dividend per ordinary and preferred share of KMG EP at 289 Tenge (including taxes withheld in accordance with the legislation of Kazakhstan) to be paid from 2016 earnings. This is equivalent to approximately 19.8 bn Tenge[1] (US$63m[2]), or 15% of the Company’s net profit for 2016. This decision is subject to approval by the shareholders at the Annual General Meeting of Shareholders (“AGM”) on 23 May 2017.
If approved, the payment of the 2016 annual dividend will be made starting from 3 July 2017 to shareholders of record as of 2 June 2017 (close of the business day).
Revised 2017 budget
KazMunaiGas Exploration Production Board of Directors approved an increase in capital expenditure for 2017 to 133 billion Tenge (US$369m[3]), which is 14.1 billion Tenge or 12% more compared to the previous guidance. Additional investments are aimed at production efficiency activities, in particular, such as sidetracking and deepening of production wells, acquisition of fixed assets, construction and maintenance works, improvement of social conditions, and investments associated with gas utilization to mitigate environmental risks.
Increase of oil processing fees
As per the approved budget for 2017 and the Company’s previous guidance, the Board has agreed an increase of processing fees starting from 1 April 2017. The processing fee will stand at 24 512 Tenge per tonne at Atyrau Refinery (20 501 Tenge previously) and 16 417 Tenge per tonne at Pavlodar Refinery (14 895 Tenge previously).
