OREANDA-NEWS. NOVATEK (“NOVATEK” and/or the “Company”) announced that independent petroleum engineers, DeGolyer & MacNaughton, have completed their comprehensive reserve appraisal of the Company’s hydrocarbon reserves as of 31 December 2012.

Total SEC proved reserves, including the Company’s proportionate share in joint ventures, increased by 32% as compared to year-end 2011 and amounted to 12,394 million barrels of oil equivalent (boe). NOVATEK added 3.4 billion boe of proved reserves under the SEC reserves reporting standards, inclusive of 2012 production, and recorded a more than eight-fold (842%) reserve replacement rate. Total proved reserves of natural gas increased to 1,758 billion cubic meters (bcm) or by 493 bcm, inclusive of 2012 production. At year-end 2012, the Company’s reserve to production ratio (or R/P ratio) increased from 25 years in 2011 to 31 years.

Under the PRMS reserves reporting methodology, the Company’s total proved reserves increased by 38% or by 4,665 million boe, inclusive of 2012 production, and amounted to 15,597 million boe. Total proved plus probable reserves increased by 45% to 22,355 million boe, including an increase of natural gas reserves by 1,054 bcm, inclusive of 2012 production, to 3,106 bcm.

The increase in all reserve categories was mainly due to successful exploration at the Company’s fields, production drilling, the inclusion of Salmanovskoye (Utrennee) and Geofizicheskoye fields acquired in 2011 into the reserve appraisal, as well as the acquisition of a 49% equity stake in ZAO Nortgas, which holds the license for the North-Urengoyskoye field.

Natural gas reserves, bcm

2012

2011

2010

2009

2008

Proved

SEC

1,758

1,321

1,144

967

690

Proved

PRMS

2,195

1,585

1,310

1,080

734

Proved plus Probable

PRMS

3,106

2,108

1,840

1,462

1,017

Liquids reserves, mmt

2012

2011

2010

2009

2008

Proved

SEC

106

91

73

63

55

Proved

PRMS

149

118

93

79

67

Proved plus Probable

PRMS

247

199

166

124

104

Total reserves, mm boe

2012

2011

2010

2009

2008

Proved

SEC

12,394

9,393

8,088

6,853

4,963

Proved

PRMS

15,597

11,337

9,325

7,711

5,354

Proved plus Probable

PRMS

22,355

15,409

13,386

10,589

7,498

The Company’s 2012 net proved reserves include the reserves of the East-Tarkosalinskoye, Khancheyskoye, North-Khancheyskoye, North-Russkoye, Yurkharovskoye, West-Yurkharovskoye, Salmanovskoye (Utrennee) and Geofizicheskoye fields, Olimpiyskiy and West-Urengoiskiy license areas, based on NOVATEK’s 100% ownership interest, as well as the reserves of the South-Tambeyskoye, Termokarstovoye, Yarudeyskoye, Beregovoye, Khadyryakhinskoye, Pyreinoye, North-Chaselskoye and Yaro-Yakhinskoye fields, Yevo-Yakhinskiy, Samburgskiy and North-Urengoyskiy license areas according to NOVATEK’s shareholdings in the joint ventures.

In 2012, marketable production at the appraised fields amounted to approximately 405 million boe, whereas total gross production for all fields aggregated approximately 411 million boe.

The reserve replacement rate is calculated by taking the difference between the opening balance of reserves and the ending balance of reserves plus production for the period and dividing the sum by production for the period.

Conversion factors:

1,000 cubic meters of gas equals 6.54 barrels of oil equivalent.

Liquids have been converted from tons to barrels using specific density factor for each field.