Ukrnafta cuts oil output 8% yoy in 1Q13

Ukraine’s largest oil producer Ukrnafta (UNAF UK) cut its oil output 7.7% yoy to 454.9 kt in 1Q13, Interfax reported on April 10, citing its sources in Ukraine’s Energy Ministry. Total natural gas production fell 5.4% yoy to 473.2 mcm for the period while condensate output slid 3.4% yoy to 49.4 kt in 1Q13.

Roman Dmytrenko: We calculated that Ukrnafta’s average gas daily production slumped 16% mom in March to just 4.83 mcm per day, suggesting February’s unexpected bounce in production has faded out. At the same time, average daily oil output rebounded 3% mom from its all-time lows last month to 5.14 kt/day in March. We believe that lacking investment in new oil field development, the company will continue fracking its existing wells. That would temporarily boost output but not be enough to turn around the company’s multi-year production downtrend.