NOVATEK

) of SEC proved reserves. Most of our reserves are located onshore or can be developed from onshore locations and are attributed to the conventional categories. Geological Exploration
We aim to expand our resource base through geological exploration at fields and license areas not only in close proximity to existing transportation and production infrastructure, but also in new potentially prospective hydrocarbon areas. In the last 5 years we discovered 7 new fields and 61 new deposits. The organic replacement rate (excluding acquisitions) of our proved reserves amounted to 186%. Hydrocarbon Production
We carry commercial production of hydrocarbons at six fields. Our three core fields—Yurkharovskoye, East-Tarkosalinskoye and Khancheyskoye — accounted for approximately 90% of our production volumes in 2012. Our total production of marketable hydrocarbons amounted to 405 mm boe in 2012. In the last five years our hydrocarbon production grew at the compound annual growth rate of 14%. Gas Condensate Processing
We process our unstable gas condensate at our Purovsky Plant, which produces stable gas condensate and liquefied petroleum gas (LPG). In June 2013 we launched processing of stable gas condensate at the newly built Ust-Luga Complex on the Baltic Sea. The Complex produces light and heavy naphtha, jet fuel, diesel fuel and heating/ship fuel. Hydrocarbon Marketing
We sell our natural gas to end customers in the Russian Federation (power generation companies, industrial users, regional gas distributors) and to gas traders. Stable gas condensate products are sold internationally, whereas our LPG and crude oil are sold domestically and internationally. Financial Results
We generate revenues primarily from natural gas and stable gas condensate product sales and, to a lesser extent, sales of other liquid hydrocarbons. Our total revenues and EBITDA in 2012 amounted 211 bln RUB and 95.2 bln RUB respectively. Shares and Credit Ratings
Shares of NOVATEK are listed on the Moscow Exchange and the London Stock Exchange (in form of GDR). NOVATEK has investment grade credit ratings from the three leading credit rating agencies - Moody’s Investor Services (Baa3), Standard & Poor’s (BBB-) and Fitch Ratings (BBB-). Business Strategy
Our strategy is to maintain our position as the leading independent natural gas producer in Russia, based on increasing our hydrocarbon production, while expanding our resource base, optimizing our marketing channels and exploring new projects.