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NOVATEK Announces Year-End 2017 Reserves

NOVATEK Announces Year-End 2017 Reserves

January 25, 2018

Moscow, 23 January 2018. PAO NOVATEK (“NOVATEK” and/or the “Company”) announced that independent petroleum engineers, DeGolyer & MacNaughton, have completed their comprehensive reserve appraisal of the Company’s hydrocarbon reserves as of 31 December 2017.

Total SEC proved reserves, including the Company’s proportionate share in joint ventures, aggregated 15,120 million barrels of oil equivalent (boe), including 2,098 billion cubic meters (bcm) of natural gas and 164 million metric tons (mmt) of liquid hydrocarbons. Total proved reserves increased by 12.8% compared to the year-end 2016, representing a reserve replacement rate of 435% for the year.

The Company’s reserves were positively impacted by successful exploration works at the Utrennee, Kharbeyskoye, West-Yurkharovskoye and Urengoyskoye (Samburgskiy license area) fields, production drilling at the South-Tambeyskoye field, as well as the new licenses obtained through tender auctions (Gydanskoye, Verhnetiuteyskoye and West-Seyakhinskoye fields) and recent asset acquisitions (South-Khadyryakhinskoye, Syskonsynyinskoye fields and West-Yaroyakhinskiy license area). Excluding the effect of obtaining new licenses, our total proved reserves increased by 1.3%, representing an organic reserve replacement rate of 134%.

At year-end 2017, the Company’s reserve to production ratio (or R/P ratio) was 29 years.

Under the PRMS reserves reporting methodology, the Company’s total proved plus probable reserves, including the Company’s proportionate share in joint ventures, aggregated 28,471 million boe, including 3,879 bcm of natural gas and 366 mmt of liquid hydrocarbons.

NOVATEK reserves according to international standards
Proved reserves under the SEC methodology

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Information provided in this press release represents expected results of PAO NOVATEK operations in 2017. The information represents preliminary assessment only, which can be adjusted after statistical, financial, fiscal and business reporting becomes available. The information on PAO NOVATEK’s operational results in this press release depends on many external factors and therefore, provided all permanent obligations imposed by the London Stock Exchange listing rules are unconditionally observed, cannot qualify for accuracy and completeness and should not be regarded as an invitation for investment. Therefore, the results and indicators actually achieved may significantly differ from any declared or forecasted results in 2017. PAO NOVATEK assumes no obligation (and expressly declares that it has no such obligation) to update or change any declarations concerning any future results, due to new information obtained, any future events or for any other reasons.

NOVATEK Announces Year-End 2017 Reserves

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