Volga Gas: Strong 1H Results – Revenues Up 50%, EBITDA Up 97%, Company to Pay First Cash Dividend
Volga Gas, the oil and gas exploration and production group operating in the Volga Region of Russia, is pleased to announce its results for the six months ended 30 June 2014.
HIGHLIGHTS
FINANCIAL RESULTS AND MAIDEN DIVIDEND
· Revenues increased by 50% to US$23.2 million (H1 2013: US$15.4 million)
· EBITDA up 97% to US$11.2 million (H1 2013: US$5.7 million)
· Profit before tax up 88% to US$8.0 million (H1 2013: US$4.3 million)
· Net profit up 83% to US$6.2 million (H1 2013: US$3.4 million) after a US$1.9 million deferred tax charge (H1 2013: US$0.9 million).
· Net cash flow from operations before working capital movements of US$10.7 million (H1 2013: US$6.6 million)
· Cash at 30 June 2014 of US$16.8million (US$8.1 million at 31 December 2013) and no debt (US$ nil at 31 December 2013)
· Maiden interim dividend of US$0.0375 per share proposed by the Board
OIL, GAS AND CONDENSATE PRODUCTION
· Group production increased 72% to average 4,419 barrels of oil equivalent per day (“boepd”) in H1 2014 (H1 2013: 2,569 boepd)
· Group production is currently averaging approximately 4,900 boepd
· Gas and condensate production from the Vostochny Makarovskoye (“VM”) and Dobrinskoye fields more than doubled in H1 2014 compared to H1 2013 from 1,789 boepd to 3,682 boepd
· Gas production during August 2014 has been running consistently at over 509,000 m3/day (18.0 mmcf/d) plus 1,040 bpd of condensate
DEVELOPMENT ACTIVITY
· Drilling operations on new production well VM#3 are continuing
· Completing installation of auxiliary modules at the Dobrinskoye gas processing plant
· Commencing front-end engineering and design study on LPG extraction project
STRATEGIC OPTIONS
· The Formal Sale Process announced on 5 June 2014 is ongoing. Further announcements will be made in due course.
Mikhail Ivanov, Chief Executive Officer of Volga Gas, said:
“Volga Gas has made considerable progress in realizing the benefits from the investment and work in bringing its main assets into production. Having anticipated the strong cash generation, the Company has made the necessary preparations and is now ready to make its first cash dividend payment to shareholders. The operational focus for management is now to maximize production from the Group’s fields and achieve an even higher level of sustainable profits and cash generation.
On 5 June 2014, the Company announced that the Board of Volga Gas has been exploring strategic options for the business, including seeking potential offerors for the Company by means of a “formal sale process”. This process is continuing and further announcements will be made in due course.”
