Petrom Posts First Quarter Net Profit of 381 Mln RON

Petrom SA reported a net profit of 381 million RON for the first quarter, declining by 57% from the same period last year, but increasing by 31.8% from the fourth quarter of 2006. The turnover of the company decreased by 12% in comparison to the first quarter of 2006.

First quarter revenue totaled 3.056 million RON (-13.72% from Q1/2006), while expenses amounted to 2.604 million RON (+1% compared with Q1/2006). Main market drivers were negatively affected both revenues and costs: crude price (Ural) declined by 7%; RON appreciated by 13% against USD. The total investments realised in Q1 2007 amounted to 551 million RON, exceeding by 24% the amount performed in Q1 2006.

Mariana Gheorghe, CEO of Petrom: "In the first three months of the year we were confronted with a challenging environment characterized by a lower crude price and a strong appreciation of the local currency adversely impacting our results. The expected natural decline of production, that we are estimating to stabilize by end of this year, also influenced the results.

Fixed assets increased by 2.3% to 13.398 million RON (Q4 2006: RON 13.092 mn). On March 31st, short-term debt amounted to 2.040 million RON, down by 9.6% compared with the fourth quarter of 2006.

The total Group daily production rate in Q1/07 was 202,000 boe/day, a decline of only 1.2% in comparison with the value of Q4/06 (205,000 boe/day). Overall the group oil and gas production decreased by 6% to 18.18 million boe (Q1/06: 19.30 mn boe). Total production in Romania amounted to 17.77 million boe in Q1/07. The natural decline in combination with the warm winter, pressure issues in the Transgaz system and technical reservoir problems in the NW of Romania are the major reasons for the decline of 6% in comparison to Q1/06 production volumes.

This year, the implementation of the transformation process along with the investment program will continue at a fast pace. The main market drivers (crude price, refining margins and the US dollar exchange rate) are expected to maintain volatile in 2007. In the course of the liberalization of the gas market, Petrom anticipates for the rest 2007 that the domestic gas price will slightly increase in order to reduce the gap between the producer price and the import price.