Novatek 1Q 20 Earnings Preview - Weaker results qoq on lower both prices and volumes
Top line and EBITDA: We forecast Novateks 1Q 2020e results to be weaker qoq on revenue and EBITDA due to lower qoq prices of crude oil (-21.1% qoq to USD 48.9/bbl) as well as lower LNG prices on international markets due to the drop in natural gas prices in Europe (TTF fell by 36.8% qoq to USD 3.1/mbtu). Moreover, the companys results were additionally under the pressure of weaker qoq sales of both LNG (-8.9% qoq to 2.45 bcm) and liquids (-6.5% qoq to 3.3 mn tons). In particular, the decline in liquids sales was driven by lower sales of crude oil (-5.2% qoq to 1.2 mn tons), stable gas condensate (-14.1% qoq to 0.4 mn tons) and naphtha (-9.1% qoq to 1.0 mn tons).Novatek is an independent gas producer and natural gas producer in Russia. Co. is engaged in the exploration, production, and processing of natural gas and liquid hydrocarbons. Co.'s upstream activities are concentrated in the Yamal-Nenets region, which is a natural gas producing area and accounts for a significant part of Russia's natural gas production. Co.'s three core fields are located in the regions of Yurkharovskoye, East Tarkosalinskoye and Khancheyskoye. Co. maintains natural gas reserves of approximately 1,144 bcm. Co.'s total net proved reserves totals around 8,088 million barrels of oil equivalent (boe).
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