NVTK: OAO Novatek: NOVATEK reports strong earnings for third quarter 2012

  NVTK: OAO Novatek: NOVATEK reports strong earnings for third quarter 2012

UK Regulatory Announcement

MOSCOW

            NOVATEK REPORTS STRONG EARNINGS FOR THIRD QUARTER 2012

Moscow, 09 November 2012. OAO NOVATEK today released its consolidated interim
condensed financial information for the third quarter and nine months ending
30 September 2012 prepared in accordance with International Financial
Reporting Standards (“IFRS”).

                  IFRS Financial and Operational Highlights

                       (in millions of Russian roubles)

3Q 2012  3Q 2011                                       9M 2012   9M 2011
                  Revenues                                        
52,562   39,888     Oil and gas sales                     151,698    125,265
169      145        Other revenues                        551        288
52,731   40,033     Total revenues                        152,249    125,553
(29,845) (22,921)   Total operating expenses              (88,476)   (68,838)
339      18         Other operating income (loss)         344        (9)
23,225   17,130     Profit from operations                64,117     56,706
2,345    (5,890)    Finance income (expense)              2,372      (2,079)
25,269   10,405     Profit before income tax              64,676     52,106
19,996   8,143      Profit                                50,892     41,074
20,003   8,322      Profit attributable to                50,911     41,427
                    OAO NOVATEK shareholders
6.59     2.74       Basic and diluted earnings per        16.78      13.66
                    share ^ (in Russian roubles)

In the third quarter and nine months 2012, total revenues increased by 31.7%
and 21.3%, respectively, as compared to corresponding periods of 2011. The
growth was due to an increase in hydrocarbon sales volumes and higher natural
gas and liquids prices.

In the third quarter 2012, profit from operations increased to RR 23,225
million, or by 35.6% as compared to the corresponding period of 2011, and for
the nine months ending 30 September 2012, profit from operations amounted to
RR 64,117 million, representing an increase of 13.1% as compared with the
corresponding nine months 2011.

Profit attributable to OAO NOVATEK shareholders grew by 140.4% in the third
quarter 2012 and by 22.9% in the nine months 2012, equaling RR6.59 per share
and RR16.78per share, respectively, which was partially attributable to
non-cash foreign exchange gain in the third quarter and nine months 2012 as
compared with non-cash losses in the same periods of 2011.

                        Selected Operating Highlights

3Q 2012  3Q 2011  Production and Purchase Volumes        9M 2012  9M 2011
                    Natural gas production,
11,609    11,950                                            37,112    34,585
                    million cubic meters (mmcm)
                    Equity share in natural gas
1,339     1,329     production                              4,016     4,013

                    from joint ventures, mmcm
840       -         Gas purchases, mmcm                     2,540     -
13,788    13,279    Total natural gas production, mmcm      43,668    38,598
972       993       Liquids production, thousand tons       3,079     3,053
                    (mt)
73        -         Liquids purchases from joint            131       -
                    ventures, mt
4         1         Liquids purchases, mt                   9         4
1,049     994       Total liquids production and            3,219     3,057
                    purchases, mt

3Q 2012 3Q 2011  Sales Volumes                9M 2012  9M 2011
13,507  12,266    Natural gas, mmcm             43,004    38,088
737     658       Stable gas condensate, mt     2,155     2,137
202     208       Liquefied petroleum gas, mt   664       654
123     66        Crude oil, mt                 308       168

In the nine months 2012, natural gas sales volumes increased by 12.9% as
compared with the corresponding nine month period due to a combined growth in
production and purchases. In the third quarter 2012, natural gas sales volumes
increased by 10.1% as compared with the third quarter 2011, which was
primarily due to an increase in gas purchases.

During the third quarter 2012, injection of natural gas into underground gas
storage facilities (UGSF) decreased by 732 million cubic meters, as compared
with the third quarter 2011, due to accelerated injection rates in the second
quarter 2012. As at 30 September 2012, total amount of natural gas injected
into UGSF was 1,309 million cubic meters, which is 10.0% higher than at the
end of September 2011.

In the nine months 2012, liquids sales volumes increased by 5.8% due to
production growth and start of gas condensate purchases from OOO SeverEnergia,
our joint venture, in April 2012. In the third quarter 2012, liquids sales
volumes increased by 14.1% due to increase in purchases and decrease in
liquids inventory balance.

                         Selected Balance Sheet Items

                       (in millions of Russian roubles)

                                   30 September 2012  31 December 2011
ASSETS
Non-current assets                   350,521             325,116
Property, plant and equipment, net   190,032             166,784
Total current assets                 48,702              58,316
Total assets                         399,223             383,432
LIABILITIES AND EQUITY
Non-current liabilities              83,120              91,636
Long-term debt                       65,721              75,180
Current liabilities                  33,869              50,114
Total liabilities                    116,989             141,750
Equity attributable to
                                     281,087             241,013
OAO NOVATEK shareholders
Non-controlling interest             1,147               669
Total equity                         282,234             241,682
Total liabilities and equity         399,223             383,432

The full set of consolidated interim condensed IFRS financial information, the
notes thereto and Management’s Discussion and Analysis of Financial Condition
and Results of Operations are available on the Company’s web site
(www.novatek.ru).

                                     ***

Certain statements in this press release are not historical facts and are
“forward looking” within the meaning of Section 27A of the Securities Act and
Section 21E of the US Securities Exchange Act of 1934 (hereinafter, the
Exchange Act). Forward looking statements include statements concerning our
plans, expectations, projections, objectives, targets, goals, strategies,
future events, future revenues or performance, capital expenditures, financing
needs, plans or intentions relating to acquisitions, our competitive strengths
and weaknesses, plans or goals relating to forecasted production, reserves,
financial position and future operations and development, our business
strategy and the trends we anticipate in the industries and the political and
legal environment in which we operate and other information that is not
historical information. By their very nature, forward looking statements
involve inherent risks and uncertainties, both general and specific, and risks
exist that the predictions, forecasts, projections and other forward looking
statements will not be achieved.

                                     ***

For further information, please visit www.novatek.ru or contact:

Press Service
+7 (495) 721 2207         Investor Relations
press@novatek.ru      +7 (495) 730 6013
                          IR@novatek.ru


                                     ***

OAO NOVATEK is Russia’s largest independent gas producer and the
second-largest natural gas producer in Russia. Founded in 1994, the Company is
engaged in the exploration, production, processing and marketing of natural
gas and liquid hydrocarbons. The Company’s upstream activities are
concentrated in the prolific Yamal-Nenets Autonomous Region, which is the
world’s largest natural gas producing area and accounts for approximately 84%
of Russia’s natural gas production and approximately 17% of the world’s gas
production. NOVATEK is an open joint stock company established under the laws
of the Russian Federation. The Company’s shares are listed in Russia on
MICEX-RTS Stock Exchange and the London Stock Exchange (LSE) under the ticker
symbol “NVTK”.

Contact:

OAO Novatek