NOVATEK, the largest independent Russian gas producer has placed Credit Linked Notes (CLN) for $100 million.

The actual demand for the CLN was 50% higher than supply. The placement involved investors from Europe, Asia, Russia and the U.S. The CLN maturity is 1.5 years, with a 6 month coupon period and a coupon rate of 9.125%.The Investment Bank TRUST and ING Bank (London) acted as lead managers of the issue.

The funds raised through the CLN issue will be used for the construction of a gas condensate stabilization plant and for development projects at Novatek fields to increase natural gas production.

Novatek is the leader among independent Russian gas producers In 2003, OAO Novatek’s net production totaled 13.5 billion cubic meters (“bcm”) of natural gas (gross 20.4 bcm) and 1.7 million tons of crude oil and gas condensate (gross 2.4 million tons). In 2004, Novatek plans to increase gross gas production to 27 bcm. The company plans to produce 50 bcm per annum of natural gas by 2010, bringing Novatek’s portion of total gas produced in Russia to 7%.

According to IFRS reporting for 6 months of 2003, the sales proceeds accounted for RUR7.1 billion (US$234 million).

The company gas reserves are among the largest ones of independent gas producers both in Russia and abroad. Recoverable gas reserves are 1.5 trillion cubic meters (ABC1+C2). By this factor Novatek essentially surpasses most of independent producers in the world. NOVATEK’s operating fields are located in the Yamal-Nenets Autonomous Region in close proximity to the existing transport infrastructure.


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