Page 18 - FSUOGM Week 39

FSUOGM PROJECTS & COMPANIES FSUOGM

Volga Gas eyes sale of business

RUSSIA RUSSIA-FOCUSED explorer Volga Gas is con- flagging production levels over the last few years.
tinuing talks with investors on a potential sale It produced 2,100 barrel per day of condensate,
The company continues of its business, the London-listed firm said in a 565 bpd of oil, 162 bpd of LPG and 1,481 boepd
talks with a number stock exchange filing on September 28. of gas in August.
of parties on the sale, Volga, which operates several fields in Rus- Volga last month said it had slashed invest-
it said. sia’s Volga region, said in June it had received a ment at its gas and condensate fields to “minimal
number of non-binding offers since launching a levels required to maintain operational integrity,”
strategic review in early April. switching instead to higher-margin oil. Earlier
“The company is continuing to engage in it had intended to drill two new wells at the
active discussions with a number of parties Vostochno-Makarovskoye field, but that plan
regarding the sale of the company, or its entire has been “deferred for the time being.”
business and assets,” it said this week. “There The focus instead will be oil. Volga has so
can be no certainty that an offer will be made, far this year sunk 11 production wells, of which
nor as to the terms on which any offer will be eight have been completed, and it has also
made.” enjoyed good results from three exploration and
Volga noted its board had the right to call off appraisal wells.
the formal sales process and reject any approach Volga plans six more exploration wells tar-
or terminate discussions with any parties at any geting 14mn barrels of unrisked oil resources,
time. it said, along with three additional development
The junior company has been grappling with wells. ™

NEWS IN BRIEF

Transneft pipeline operator September 26.
RUSSIA BCS Global Markets commented on
Tatneft could lose $1bn on to deliver on 2019 dividends

tax changes Transneft is preparing to pay its full planned Novatek may raise dividend
dividend for 2019, despite the ongoing
Russian regional oil major Tatneft could lose discussion in the government on the tariffs in 2020
RUB80bn ($1bn) as a result of the discussed and dividends of Russian state pipeline
changes to oil taxation, Tass reported citing operator, Kommersant daily reported citing Russian independent gas producer Novatek
the CEO of the company, Nail Maganov. unnamed sources. may consider higher dividends already for
As followed by bne IntelliNews, Tatneft is Reportedly, Transneft's tariffs are likely 2020, the company's director of the investors
the company most exposed to the proposed to remain intact, despite the recent formal relations department Alexander Nazarov said
raising of the Mineral Extraction Tax (MET) discussions on lowering them, according on September 29.
on high viscous oil and other proposed to Kommersant, quoting Deputy Prime “While many international companies
reforms to the taxation of the oil sector. Minister Yury Borisov. reduced or even canceled dividends, we
VTB Capital (VTBC) on September 25 Most recent reports suggested that continued to pay them and last week
calculated that Tatneft could lose $0.5bn Transneft and Russian Railways (RZD) so announced an important event, lifting
(RUB38bn) in 2021, should the depletion far lack a clear decision on 2019 dividends, of non-financial guarantees on project
and high viscosity MET reliefs, and the despite the Finance Ministry counting on financing of the Yamal LNG (liquefied
export duty reliefs, be removed, as well as compliance with the 50% of IFRS net profit natural gas) project, which will allow us to
the tax break for the Alshachinskoye oilfield payout requirement. consider higher dividends already for the
being cancelled completely. "The government has stated that it expects entire 2020,” he said.
"While our estimate is lower than that the company to pay the entire dividend this Novatek sees itself as an undervalued
mentioned by management, it still makes year, which is our base case and translates company, Nazarov added.
up 20% of 2021 forecasted Ebitda, on our into a 7.7% dividend yield," VTB Capital He also said that the company complies
numbers, making Tatneft one of the worst (VTBC) commented on September 25, while with the schedule of implementation of
affected companies," VTBC warns. maintaining the Buy call on Transneft's shares. the Arctic LNG-2 project, whose launch is
The more negative internal estimate Previously Transneft proposed paying planned for 2023, and that products made
might point to greater downside potential the 2019 dividend per share (RUB11,200) in by the fourth stage of the Yamal LNG plant,
and could create additional pressure on several instalments, with 50% being paid this which is now under construction, will be
the company’s shares (both ordinary and year and the rest distributed in equal parts sold on the spot market after the facility is
preferred), which are already down 19% over the next three years. launched until the end of 2020.
since the beginning of September, losing 10 Should the company pay the full Novatek will make a final investment
percentage point to the sector average, VTBC dividends, it would be positive for Transneft decision on the Obsky LNG plant in 2021, he
notes. preferred shares, as part of the market also said.
expected only half to be paid this autumn,

P18 www. NEWSBASE .com Week 39 30•September•2020