Moscow, 18 November 2005. OAO NOVATEK today announced strong earnings in its third quarter and nine months 2005 consolidated interim condensed financial results prepared in accordance with International Financial Reporting Standards (“IFRS”) and reviewed by PricewaterhouseCoopers. 

Net profit attributable to NOVATEK for the nine months ending 30 September 2005 totaled RR 10,798 million, or RR 3,556 per share (basic and diluted), compared to RR 4,061 million, or RR 1,807 per share (basic and diluted) for the same period in 2004. For the third quarter 2005, net profit attributable to NOVATEK increased by 65% to RR 2,875 million, or RR 947 per share (basic and diluted) from RR 1,743 million, or RR 776 per share (basic and diluted).

Net profit attributable to NOVATEK was higher in both periods mainly due to the increase in production volumes from core fields, the impact on financial results due to the December 2004 asset consolidations, and the net gains on disposal of investments in oil and gas producing associates in the second quarter 2005.

Total revenues and other income grew by 77% to RR 32,240 million for the nine-month period ending 30 September 2005 from RR 18,240 million in the corresponding 2004 period. For the three-month period ending 30 September 2005, total revenues and other income increased by 89% to RR 10,242 million from RR 5,408  million for the corresponding period in 2004.

Natural gas sales increased by 84% to RR 16,873 million in the nine-month period ended 30 September 2005 from RR 9,173 million in the corresponding 2004 period, while revenues from liquids (crude oil, stable gas condensate, LPG and oil products) increased from RR 5,990 million in 2004 to RR 10,765 million, or 80%, during the period.

For the third quarter 2005, revenues from natural gas increased by 112% to RR 5,481 million from RR 2,583 million in the corresponding 2004 period, while revenues from liquids increased by 96% to RR 4,388 million from RR 2,233 million in 2004.

Natural gas sales volumes for the nine-month period ended 30 September 2005 rose by 64% from 12,582 million cubic meters in 2004 to 20,597 million cubic meters in 2005. Net liquid sales volumes grew by 21%, from 1,541 thousand tons in 2004 to 1,866 thousand tons in 2005.

In the third quarter 2005, natural gas sales volumes increased by 106% to 6,826 million cubic meters from 3,316 million cubic meters for the corresponding period in 2004, whereas liquids sales volumes increased by 9% to 592 thousand tons from 541 thousand tons in the 2004 period.

Third Quarter and Nine Months 2005

IFRS Financial and Operational Highlights

3Q 2005	3Q 2004			9M 2005	9M 2004
RR, mln	RR, mln		Revenues	RR, mln	RR, mln
9,869	4,816	105%	Oil and gas sales	27,638	15,163	82%
-	-	-	Oil and gas construction services	-	2,053
278	158	76%	Sales of polymer and insulation tape	714	432	65%
113	53	-	Other	282	433	-
10,260	5,027	104.%	Total revenues	28,634	18,081	58%
(18)	381		Total non-operating revenues	3,606	159
10,242	5,408	89%	Total revenues and other income	32,240	18,240	77%
(6,214)	(3,319)	87%	Total operating expenses	(17,424)	(13,344)	31%
3,950	2,246	76%	Profit before income tax and minority interests	14,451	5,542	161%
2,855	1,749		Profit for period	10,763	4,122
2,875	1,743	65%	Profit attributable to shareholders	10,798	4,061	166%
947	776	22%	Basic and diluted earnings per share( in RR)	3,556	1,807	97%
3,036,306	2,247,030		Weighted average number of shares outstanding	3,036,306	2,247,030

Selected Operating Data

3Q 2005	3Q 2004			9M 2005	9M 2004
			Sales Volumes
6,826	3,316	106%	Natural gas (millions cubic meters)	20,597	12,582	64%
82	400	-80%	Crude oil (thousand tons)	787	1,184	-34%
309	-	100%	Stable gas condensate (thousand tons)	396	-	100%
96	-	100%	Liquefied petroleum gas (thousand tons)	123	-	100%
105	141	-26%	Oil products (thousand tons)	560	357	57%

Selected Balance Sheet Items (in millions of Russian roubles)

ASSETS
	30 September 2005	31 December 2004
Non-current assets
Property, plant and equipment, net	64,083	62,449
Investments in associates	-	1,945
Total non-current assets	65,755	73,316
Total current assets	13,682	9,134
Total assets	79,437	82,450
LIABILITIES AND EQUITY
Non-current liabilities
Long-term debt	1,428	13,232
Total non-current liabilities	11,260	23,275
Total current liabilities	12,562	14,239
Total liabilities	23,822	37,514
Equity attributable to Group shareholders
Total equity attributable to Group shareholders	55,334	44,487
Minority interest	281	449
Total equity	55,615	44,936
Total liabilities and equity	79,437	82,450