Ukrnafta : production in July remains stable

Based on the current data, in July 2019 PJSC Ukrnafta produced 125.9 ktonnes of oil and condensate and 97.1 mln m³ of gas, 0.5% and 7.5% up respectively against the same indicators of July 2018, and 1.9% and 2.6% up against June 2019.

Average daily production rates	July 2019	June 2019	Monthly change, %	July 2018	Y-o-y change, %
Production of crude oil and condensate, ktonnes	4.06	4.12	-1.5	4.04	0.5
Gas production, mln m3	3.13	3.16	-0.9	2.92	7.4

Daily production rates for hydrocarbons and condensate made 4.06 ktonnes and 3.13 mln m³ for gas having slightly decreased comparing to the previous month. Production dynamics slowdown is attributed, first of all, to cash flow constraints due to the unsolved issue of the outstanding tax debt. Additionally, there was forced partial production shutdown at Nadvirna oil & gas production division due to the 20-day blocking of the road by local residents.

While the Government still has not taken any decision on the suggested proposal to settle the outstanding tax debt, Ukrnafta's debt service expenses are nearly 2.5 times higher than capital expenses. In 1H2019, the company allocated to reserves for possible fines and penalties related to the rent and other tax arrears accumulated in the previous periods UAH 1.8 bln, while capital investments made UAH 749 mln

Ukrnafta repeatedly underlined that movement from stabilization of production to its growth would only possible with the increased investments in the infrastructure modernization, production intensification, drilling new wells and sidetracks near field exploration / delineation, and obtaining new production licenses.