Ukrnafta reports 9% yoy oil output decline in January

Ukrnafta’s (UNAF UK) oil output fell 9% yoy to 156.1 kt in January 2013, Interfax reported on Feb. 13. The company’s natural gas production fell 5.8% yoy to 163 mcm in January, while gas condensate output declined 4.2% yoy to 16.9 kt for the period.

Roman Dmytrenko: Despite the overall multiyear trend in the company’s declining output, we note that it might be reversing: the company’s average daily oil output slid only 1.7% mom in January vs. a 6.7% mom drop in December, while average daily gas production grew 4.6% last month vs. a 12.7% mom decline in December. Nevertheless, we still do not expect Ukrnafta to ramp up its production in the foreseeable future due to a lack of high-quality new oil wells. But we believe fracking – which boosted the company’s daily oil output to its two-year high in September – might allow Ukrnafta to achieve flat yoy oil output in 2013.