Key operating
and financial
indicators
2P reserves,
million tonnes*
145
145
205
0%
2017
2016
2006
Crude production,
million tonnes p/annum**
11.9
12.2
9.5
-2%
2017
2016
2006
Sales volume,
million tonnes p/annum**
11.7
12.1
9.3
-3%
2017
2016
2006
Export,
million tonnes p/annum**
7.1
6.8
6.9
+5%
2017
2016
2006
Revenue,
billion tenge*
956
727
412
+32%
2017
2016
2006
Net profit,
billion tenge
195
132
123
+48%
2017
2016
2006
Capex,
billion tenge*
111
115
49
-3%
2017
2016
2006
Net cash,
billion tenge***
1,339
1,172
332
+14%
2017
2016
2006
Net cash, US$ million***
4,028
3,516
2,615
+15%
2017
2016
2006
Average exchange rate, tenge/US$
326.1
341.8
126.1
-5%
2017
2016
2006
Average Brent price,
US$/bbl
54.2
43.7
65.1
+24%
2017
2016
2006
* Excluding stakes in KGM, CCEL and PKI.

** Including stakes in KGM, CCEL and PKI.

*** Cash, cash equivalents and other financial assets, less borrowing.
2017
milestones
A brief history
of KMG EP as
a public company
2006
2007
2008
2009
2010
2011
2012
2014
2015
2016
2017
september
2006
Initial public
offering (IPO)
In September 2006, KMG EP placed 38% of its shares on the stock market in the form of common shares on the Kazakhstan Stock Exchange and global depositary receipts (GDRs) on the London Stock Exchange, raising more than US$ 2 billion.
april
2007
Acquisition of 50%
of Kazgermunai JV
The deal to acquire a 50% stake in Kazgermunai, which closed in April 2007, turned KMG EP into Kazakhstan’s second-largest oil producer. The deal was worth US$ 969 million. The acquisition increased the Company’s total oil reserves by 6% and its production by 17%*. Kazgermunai’s fields are characterised by lower production costs and a higher quality of oil than KMG EP’s core fields. The acquisition’s payback period was four years**.
december
2007
Acquisition of 50% in CCEL
(Karazhanbasmunai)
KMG EP’s second major transaction, the acquisition of a 50% stake in CCEL, was completed on 12 December 2007.
CCEL is developing the Karazhanbas field in the Mangistau region of western Kazakhstan. The deal boosted KMG EP’s total oil reserves by 17% and its production by 13%*. The financial structure of the transaction gave priority protection to the interests of KMG EP. Under the terms of the deal, KMG EP paid US$ 150 million of its own funds to the second shareholder in CCEL, CITIC Group, entitling KMG EP to priority annual income of US$ 26.9 million. The acquisition’s payback period was six years**.
october
2008
Share buyback programme
The Board of Directors approved the repurchase of the Company’s shares worth up to US$ 350 million. The buyback programme started on 24 November 2008 and ended on 31 October 2009.
august
2009
Acquisition of an 11% stake in KMG EP by China Investment Corporation
China Investment Corporation (CIC) announced the acquisition of around 11% of the Company’s shares in the form of GDRs, worth US$ 939 million. The market reacted to the acquisition by boosting the value of KMG EP shares by 11%.
december
2009
Acquisition of a 33% stake in PetroKazakhstan Inc.
On 22 December 2009, KMG EP completed the acquisition of a 33% stake in PetroKazakhstan Inc., which is involved in exploration and the production of hydrocarbons, as well as the sale of oil and petroleum products. The second shareholder in PetroKazakhstan Inc. is Chinese oil and gas company CNPC Exploration and Development Company Ltd. The transaction lifted KMG EP’s total oil reserves by 4% and its production by 13%*. The acquisition’s payback period was three years**.
march
2010
Listing of preferred shares on KASE and launch of their buyback programme
The Board of Directors decided to list preferred shares on the KASE and launch a buyback programme, which reinvigorated the Kazakhstan stock market and accounted for a significant share of its operations in 2011. Completed in November 2011, the programme allowed the purchase of over two million shares worth more than 37 billion tenge.
october
2010
KMG EP discovers an oil deposit
at Liman block
The Company reported the discovery of an oil deposit at the Liman exploration block. The deposit is located on the southern slope of the Novobogatinsk salt dome, in the immediate vicinity of the Novobogatinskoye Southeast oil field being developed by Embamunaigas, which is located 70 km west from the city of Atyrau.
The flow of oil came in the first exploratory well at a depth of more than 1,200 metres from the deposits of the Middle Triassic.
april
2011
50%
Acquisition of a 50% stake in Ural Group Limited, which owns a 100% STake in Ural Oil and Gas LLP
The Company entered into an agreement to acquire 50% of shares in Ural Group Limited (UGL), which is the sole stakeholder in Ural Oil and Gas LLP, which, in turn, has the rights to subsoil use by exploration of hydrocarbons at the Fedorovskiy block located in the region of West Kazakhstan.
october
2011
Share buyback
programme
The share buyback programme lasted a year, from October 2011 to end December 2012. During this period, the Company repurchased 19,461 ordinary shares and 14,386,605 GDRs for a total of US$ 263 million
december
2011
KMG EP buys Karpvoskiy Severniy exploration block
The Company announced that it had acquired a 100% stake in the Karpovskiy Severniy JSC from GazMynayОnim LLP at a cost of US$ 59 million, thereby gaining subsoil use rights for the exploration of oil, gas and condensate at the Karpovskiy Severniy field in the West Kazakhstan region.
february
2012
Reorganisation of OMG and EMG production units into joint stock companies
The Board of Directors decided to transform the production arms of OMG and EMG into joint stock companies, 100% of which would be owned by KMG EP. The shift included the transfer of fixed assets and subsoil use rights to the joint stock companies created when the state authorities approved the legislation.
july
2012
49%
KMG EP sells 49% stake in Karpovskiy Severniy JSC
KMG EP entered into a sale-purchase agreement with MOL Hungarian Oil and Gas Plc, to sell 49% of the shares in Karpovskiy Severniy JSC, which holds the rights to subsoil use for the exploration of oil, gas and condensate in the Karpovskiy Severniy contract area in West Kazakhstan.
may
2014
Opening of a new deposit at the Rozhkovskiy field, Fedorovskiy block
The exploration was carried out by Ural Oil and Gas LLP with Ural Group Limited as the sole stakeholder — 50% of which KMG EP acquired in 2011. The discovery of the deposit confirmed the high potential of the asset.
december
2014
Commissioning of the Aksai oil and gas field
The Aksai oil and gas field went into operation at the end of 2014. The licence for the development belongs to Kazgermunai in Kyzylorda region.
january
2015
Withdrawal of NC KMG’s offer to acquire KMG EP shares
Independent Directors of the Company received notification from NC KMG that the parent company was withdrawing its offer for the possible acquisition of common shares of KMG EP at a price of US$ 18.50 per GDR. NC KMG’s preliminary announcement had been made in July 2014.
april
2016
KMG EP switches to the independent oil processing scheme
In April 2016, the Company switched to an independent oil-processing scheme to meet its domestic supply obligations. Under the scheme, KMG EP supplies crude oil to the ANPZ and PNHZ for processing, with the subsequent sale of produced oil products through KazMunaiGas Refining and Marketing JSC (KMG RM) under an agency agreement.
august
2016
extraordinary shareholders’ meeting
On 3 August 2016, at an extraordinary shareholders’ meeting, independent shareholders voted against Resolutions 1 and 2 regarding the introduction of changes and amendments to the Relationship Agreement and the Company’s Charter. As a result, the Purchase Offer by NC KMG did not enter into force and the proposed changes and amendments to the Relationship Agreement and the Charter of the Company did not proceed, in accordance with the terms set out in the NC KMG Circular.
september
2016
9%
OMG granted lower mineral extraction tax rate for 2016
OMG’s application for a temporary lower rate of mineral extraction tax (MET) for the Uzen and Karamandybas fields was approved. The tax rate was set at 9% for all of 2016. The effect of the reduced MET rate in 2016 was a reduction in MET expenses of 15 billion tenge.
june
2017
49%
KMG EP buys back a 49% stake in KS EP Investments BV, which holds 100% of Karpovskiy Severniy LLP
The Company bought back a 49% stake in KS EP Investments BV, which holds 100% of Karpovskiy Severniy LLP, from MOL Hungarian Oil and Gas Plc for US$ 1 (one US dollar), making it the sole shareholder, with a 100% stake in Karpovskiy Severniy LLP.
december
2017
The Company announces a tender offer for repurchase of its GDRs and shares and voluntary delisting from the LSE and KASE
The Company announced in December 2017 its intention to launch a tender offer for the repurchase of all of its issued GDRs at a price of US$ 14 per GDR, corresponding to a premium of 23.7% on the weighted-average 30-day price of the GDR as of 1 December 2017 (US$ 11.32 per GDR).
Effective
management
and financial
stability
The Company improved its financial results on the back of the steady increase of the global oil prices in 2017 as well as due to effective measures taken on oil production optimisation and increased effectiveness of refined-product sales.
EBITDA,
billion tenge
260
(US$ 807 million)
207
(US$ 605 million)
9
(US$ 40 million)
2017
2016
2015
Effective
management
and financial
stability
The Company improved its financial results on the back of the steady increase of the global oil prices in 2017 as well as due to effective measures taken on oil production optimisation and increased effectiveness of refined-product sales.
Free cashflow,
billion tenge
186
(US$ 570 million)
98
(US$ 288 million)
-125
(-US$ 562 million)
2017
2016
2015
Sustainable
business


The Company’s sustainability is based on continuous investments into maintaining potential of its production assets and its input in social development of the regions of its operation presence.
Capital expenditure*,
billion tenge
111
(US$ 341 million)
115
(US$ 337 million)
98
(US$ 443 million)
2017
2016
2015
* Excluding shares in KGM, CCEL and PKI
Sustainable
business


The Company’s sustainability is based on continuous investments into maintaining potential of its production assets and its input in social development of the regions of its operation presence.
Social projects,
million tenge
1,881
(US$ 6 million)
1,687
(US$ 5 million)
1,897
(US$ 8.5 million)
5,465
(US$ 19.5 million)
Total for 3 years
2017
2016
2015