Moscow, October 19, 2004. OAO “NOVATEK (the “Company”) today reported record earnings in its first half 2004 consolidated interim condensed financial results prepared in accordance with International Financial Reporting Standards (“IFRS”) and reviewed by PricewaterhouseCoopers.

The Company noted that major contributors to the increase in its earnings were continued growth in natural gas and liquids production from the Yurkharovskoye and Khancheyskoye fields, together with strong domestic and international commodity prices.

Total revenues and other income grew by 93% to RUR 12,793 million for the six-month period ending 30 June 2004 from RUR 6,636 million in the corresponding 2003 period, resulting in net profit of RUR 2,318 million versus RUR 1,103 million, respectively.

Gross natural gas production for the six-month period rose by more than 16.6% from 9,26 billion cubic meters in 2003 to 10.8 billion cubic meters in 2004. Gross liquid production (crude oil and gas condensate) rose 49%, from 0.99 million to 1.48 million tons. NOVATEK’s net natural gas production supplied to consumers totaled 8.32 billion cubic meters.

In June 2004, the Company completed the divestiture of its oil and gas constructions services and other non-core entities to focus on its principal activities of exploration, development, production, processing and marketing of hydrocarbons. Excluding the non-core entities, revenues from the Company’s core oil and gas activities increased by 121% from RUR 4,677 million in 2003 to RUR 10,347 million in 2004.

Beginning in January 2004, OAO NOVATEK has commenced delivery of natural gas to the Tyumen and Kurgan regions at prices regulated by the Federal Tariff Service (formerly Federal Energy Commission).

During the year the Company plans to deliver up to 2 bcm to its customers in these regions. On the 1 of July, 2004, the Company invested approximately 2,496 million RUR into the construction of the Purovskiy Gas Condensate Processing Plant, which is scheduled to begin its operations in the beginning of the first quarter 2005.

The full set of consolidated IFRS financial statements and notes thereto are available in the Investor Relations section

Cautionary statement relevant to Forward-looking information

Some of the information in this press release may contain projections or other forward-looking statements regarding future events or the future financial performance of NOVATEK. We caution you that these statements are not guarantees of future performance and involve risks, uncertainties, and assumptions that we cannot predict with certainty. Words such as “anticipates”, “expects”, “intends”, “plans”, “targets”, “projects”, “believes”, “seeks”, “estimates”, and similar expressions are intended to identify such forward-looking statements.  These statements are not guarantees of future performance and are subject to certain risks, uncertainties and other factors, some of which are beyond our control and are difficult to predict.   Accordingly, our actual outcomes and results may differ materially from what we have expressed or forecasted in the forward-looking statements. We undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

Press service of OAO NOVATEK
press@novatek.ru
+7 (095) 721 22 07

Investor Relations Department
ir@novatek.ru
+7 (095) 730 60 20