KMG EP revised 2015 budget to base it on $50 per barrel
During the meeting, the Board of Directors approved 2015 budget adjustment and approved the agenda of the Annual General Meeting of shareholders scheduled for May 19. The Board of Directors reviewed the budget for 2015 and approved it on the basis of Brent crude oil average price of USD 50 per barrel. The planned volume of production in 2015 of JSC "OzenMunaiGas" (OMG) is 5.4 million tons (108 thousand barrels per day) and of JSC "EmbaMunaiGas" (EMG) is 2.8 million tons (56 thousand barrels per day). The total planned production volume of OMG and EMG in 2015 is 8.2 million tons (164 thousand barrels per day) which is 69 thousand tons or 1% below the production plan approved in December 2014. Expected volume of domestic sales in 2015 has been revised downward. It is expected that the obligations of OMG and EMG for the supply of oil to the domestic market in 2015 was 2.3 million tons (47 thousand barrels per day), 1.9 million tons of which (38 thousand barrels per day) will be supplied to Atyrau refinery from OMG resources and 0.4 million tons (9 thousand barrels per day) to Pavlodar Petrochemical Plant from EMG resources. Additional 100 thousand tons will be processed in Atyrau refinery for the company's own needs. 2015 capital expenditures are equaled to KZT 84 billion (USD 457 million), which is KZT 30 billion (USD 164 million) or 26% lower than the capital investments approved in December 2014. It is expected that in 2015, at an oil price of USD 50 per barrel, the company's free cash flow will be negative. Board of Directors also reviewed the terms of payment for crude oil export sales. From 1 April 2015 the permissible payment deadlines will be reduced from 90 to 30 days. Board of Directors also decided to grant financial assistance to OMG in the amount of KZT 37 billion (USD 200 million). KMG EP is among the top three Kazakh oil and gas producers. In 2014 the production volume of the Company, including stakes in LLP "JV" Kazgermunai", CCEL (JSC "Karazhanbasmunai") and "Petro Kazakhstan Inc." amounted to 12.3 million tons (250 thusand barrels per day).
