2016.02.10 Current Report No. 10/2016

Warsaw, February 10th 2016
Estimates of Q4 and full-year 2015 consolidated financial highlights and information on the PGNiG Group's material impairment losses in Q4 2015
Current Report No. 10/2016
The Management Board of Polskie Górnictwo Naftowe i Gazownictwo S.A. ('PGNiG' or the 'Company') announces preliminary estimates of PGNiG's consolidated financial information for 2015.
According to preliminary estimates, the following Q4 2015 consolidated financial highlights are expected:
1. consolidated revenue of the PGNiG Group - about PLN 9.77bn,
2. consolidated EBITDA of the PGNiG Group - about PLN 0.77bn.
The estimates take into account:
a) impairment losses recognised in Q4 2015 and written off expenses pertaining to:
- tangible assets under construction related to the exploration for and evaluation of mineral resources: ca. PLN 0.36bn, including seismic surveys and dry wells written off: PLN 0.08bn (Exploration and Production segment),
- hydrocarbon production assets: ca. PLN 0.15bn (Exploration and Production segment),
- methane-rich gas inventories: ca. PLN 0.22bn (Trade and Storage segment),
b) loss on hedging instruments - ca. PLN 0.11bn, including cost of gas hedges: PLN 0.13bn (Trade and Storage segment),
which will reduce the PGNiG Group's operating result for Q4 2015 by an aggregate amount of approximately PLN 0.84bn.
The impairment losses were recognised after a periodic assessment of the recoverable amounts of assets.
PGNiG recognised impairment losses on production assets and assets related to the exploration for and evaluation of mineral resources based on future cash flow analysis, which took account of current trends in product prices, expected regulatory changes (including tax regime changes), and updated, long-term production forecasts. The need to recognise impairment losses was identified with respect to assets located in Poland and Norway.
The write-down of methane-rich gas inventories was driven by two factors: (i) the loss of calorific value of gas at the Wierzchowice underground gas storage facility, and (ii) market valuation of methane-rich gas inventories based on forecast selling prices.
Furthermore, the Management Board announces that the estimated consolidated full-year EBITDA for 2015 is approximately PLN 6.1bn, on estimated consolidated revenue of PLN 36.5bn.
The estimates are based on preliminary data concerning the performance of the Company and its subsidiaries in January-December 2015 available to the Company's Management Board. The estimates reflect the Management Board's best knowledge at the time when they were made, based on the assumption that no circumstances would emerge which could materially affect the Company's financial results after the estimates are published.
The results have not yet been audited by an independent auditor, but will undergo such audit in accordance with applicable regulations.
The above revenue and EBITDA estimates will be monitored until the issue of the Company's full-year report for 2015 on March 4th 2016.

PGNiG - Polish Oil & Gas Company issued this content on 10 February 2016 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 10 February 2016 16:55:38 UTC

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