Gazprom Neft Reports Full Year 2008 Results

Moscow - April 15, 2009, Gazprom Neft releases consolidated results for the 2008. The Company's financial statements were prepared in accordance with US GAAP and are presented in US dollars.

Full year 2008 revenues reached a record $33.1 billion, up 52% from the $21.8 billion reported for 2007. Net income for the year reached $4.7 billion, an increase of 12% from the $4.1 billion in 2007. EBITDA increased 28% to $8.0 billion from the $6.2 billion reported last year.

Year-on-year growth resulted from higher pricing, increased domestic oil product sales and management activity on improving operational efficiency. Tax burden, high transportation and energy costs restrained company's financials.

Fourth quarter revenues declined 25% to $5.0 billion from $6.6 billion reported in 2007. Fourth quarter EBITDA decreased to $204 million, vs. 2007 fourth quarter EBITDA of $1.8 billion. The Company incurred a net loss for the period of $543 million. For the 2007 fourth quarter, the Company net income was $1.3 billion.

The decrease in financial results for the Forth Quarter 2008 reflected the impact of the significant sequential decrease in oil prices, lagged export duties and non-cash currency translation loss. However, the financial performance at this period benefited from cost reduction programs (decline in operating costs by 11% Q-o-Q).

JSC "Gazprom Neft" key financial metrics:

 
Q4 2007Q4 2008ChangeQ3 2008Q4 2008Change20072008Change
Revenues6 6044 988-24%10 0854 988-51%21 76733 07552%
EBITDA*1 751204-88%2 642204-92%6 2367 96528%
Adjusted EBITDA**1 867409-78%2 754409-85%6 5538 56031%
Operating cash flow1 702847-50%2 147847-60%5 3165 4442%
Net Income1 324-543-141%1 594-543-134%4 1434 65812%
Adjusted EBITDA Margin26%7%-19%П.29%7%-22%П.30%26%-4%П.
Net Margin19%-9%-28%П.17%-9%-26%П.19%14%-5%П.
Adjusted EBITDA/Bbl265-81%325-85%212521%
Net Income/Bbl22-10-144%28-10-135%172019%

*EBITDA is defined as earnings before interest, income taxes, depreciation and amortization, minority interest, foreign exchange gain (loss), other income and expenses

** Adjusted EBITDA includes Gazprom Neft's share of EBITDA of its equity affiliates (Slavneft and Tomskneft)