JSOC Bashneft has announced the results of the latest independent audit of hydrocarbon reserves conducted by Miller and Lents, Ltd. in accordance with PRMS classification (Petroleum Resources Management System)

The auditor has evaluated reserves at the Company's oil and gas condensate fields in oil and gas provinces in the Urals and Volga Region and in Western Siberia, as well as part of hydrocarbon reserves at the R. Trebs and A. Titov fields in the Timan-Pechora oil and gas province (only those included in a pilot production project).

Total oil and condensate reserves of JSOC Bashneft
as of December 31, 2013

* — barrel-tonne conversion factor of 7.11

The audit findings show that by December 31, 2013 Bashneft's proved reserves had increased by 1.9% to 2,045.3 million barrels. In 2013 the reserve replacement ratio totalled 133.7%. The audit findings suggest that Bashneft's reserves-to-production ratio amounts to 17.9 years.

“The key drivers behind the increase in proved reserves include the fact that the auditor has confirmed the efficiency of geological and engineering operations at the Company’s wells and of the formation pressure maintenance system. The launch of production at the Trebs and Titov fields and a favourable pricing environment have also promoted growth,” commented Mikhail Stavskiy, Bashneft's First Vice President for Upstream and Geology.

According to Miller and Lents, as of December 31, 2013 Bashneft's total probable and possible reserves (including the R. Trebs and A. Titov fields) amounted to 1,191.5 million barrels. Probable reserves increased by 0.1% to 528.7 million barrels, while possible reserves added 0.8% and reached 662.8 million barrels.

The start of oil production at the R. Trebs and A. Titov fields in August 2013 has enabled the auditor for the first time to factor in reserves of these fields in the amount to be produced during pilot production.

According to Miller and Lents, as of December 31, 2013 proved oil reserves at the R. Trebs and A. Titov fields included in the pilot production project totalled 21.3 million barrels, while total reserves (3P) amounted to 81.9 million barrels (under a barrel-tonne conversion factor of 7.45).

Miller and Lents also evaluated oil resources at the subsoil area including the R. Trebs and A. Titov fields as of December 31, 2013. Taking into account the results of geological exploration, the auditor has assessed 3C (maximum estimate) contingent oil resources of these fields at 649.4 million barrels, while prospective resources have been estimated at 60.3 million barrels. In 2013 contingent resources decreased by 12.6% due to part of resources being reclassified as recoverable reserves.

At the R. Trebs and A. Titov fields Bashneft is proceeding with exploration drilling (including core sample collection and formation testing), 2D and 3D seismic surveys, seismic data processing and additional tests at exploration wells drilled earlier.

This is also the first time that Miller and Lents has evaluated recoverable reserves and contingent resources of natural gas and condensate at four gas condensate fields of the Saratovsko-Berkutovskoye group in the Republic of Bashkortostan. The Company is presently designing field facilities and conducting additional exploration and appraisal drilling as part of the project to develop these fields.

According to Miller and Lents, as of December 31, 2013 possible reserves at the gas condensate fields forming part of the Saratovsko-Berkutovskoye group amounted to 866.8 billion cubic feet (24.5 billion cubic metres) of gas and 7.8 million barrels of condensate (under a barrel-tonne conversion factor of 8.27). As for 3C (maximum estimate) contingent resources of the fields, the auditor has assessed them at 307.6 billion cubic feet (8.7 billion cubic metres) of gas and 2.6 million barrels of condensate.