Novatek Snaps Four Days of Losses on Winning Arctic Field
Novatek closed up 2.3 percent at 311.37 rubles in Moscow. The benchmark Micex Index of 50 stocks rose 0.2 percent.
The Russian Subsoil Agency today declared Novatek the winner of an auction to develop the Arctic Vostochno-Tazovskoye, or East-Tazovskoye in English, oil and gas condensate field with a bid of 3.19 billion rubles ($103.5 million), according to a statement posted on the agency’s website.
“The victory at the auction was positive,” Mikhail Loshinin, an analyst at Rye, Man & Gor Securities, said by phone today. “The price was acceptable, and the company has existing infrastructure in this region.”
East-Tazovskoye, located close to Novatek’s North-Russkoye field in the Yamal-Nenets region, contains 65.3 billion cubic meters of gas and 13.4 million tons of liquid hydrocarbons in recoverable reserves under Russian classification, the gas producer said in a regulatory filing today.
Novatek outbid OAO Lukoil (LKOH), Russia’s second-biggest oil producer, gas producer Itera and OAO Gazprombank’s unit Status, Interfax reported today, without saying where it obtained the information. The starting price was 1.1 billion rubles, the news agency said.
“The acquisition of a new license is fully consistent with our strategy and allows us to expand the resource base in our core region,” Chief Executive Officer Leonid Mikhelson said in the company statement. “We will benefit from significant synergies due to the proximity of the East-Tazovskoye field to our existing asset base.”
To contact the reporter on this story: Anna Shiryaevskaya in Moscow at email@example.com