Summary Results of OAO TATNEFT Activity in 2011

Summary Results of OAO TATNEFT Activity in 2011

The Joint Stock Company TATNEFT produced 25 million 928.5 thousand tons of crude oil in 2011 with 44.3% of crude oil produced through application of various crude oil recovery enhancement methods. In general, production volume of TATNEFT Group of Companies amounted to 26 million 194 thousand tons oil crude in 2011.

The Company invests in the prospecting and exploration of oil and gas fields not only in Tatarstan but also in the Republic of Kalmykia, Orenburg and Samara Region and in the Nenets Autonomous District, as well as in the other regions of Russia. Pilot operations are underway on development of significant reserves of extra-viscous oil.

309 new wells were put into operation in 2011 and 220 wells were completed for water injection. The average production rate of new well commissioned after drilling amounted to 9.4 tons per day during the year under review.

According to "Miller and Lents", an independent international consulting Company, proved developed, undeveloped and undrilled reserves of OAO TATNEFT amounted to 869.5 million tons of oil as of the beginning of 2012.

By the results of operation the Joint Stock Company received 75.1 billion rubles of pre-tax profit in 2011 and 54.9 billion rubles net profits, 30% of which are expected to be used for payment of dividends.

The Company's financial soundness indices and the equity capital to debt ratio are maintained at a high level. The amount of net assets increased up to 327.3 billion rubles over 2011. The accumulated financial potential enables the Company to implement major investment projects with construction of TANECO Refining and Petrochemical Plants Complex being the most important one. The first stage of the Complex was put into operation in the beginning of the beginning of this year.

Energy efficient development, implementation of innovative developments and modernization of production allow TATNEFT keeping a leading position not only among the enterprises of the Republic of Tatarstan, but also in the country's oil industry. The Company has the highest figure of mean time between failures period of the wells, which exceeds three years, among the major oil companies in Russia.

In 2011, the market capitalization of the Company restored to the maximum reached pre-crisis level and amounted to 345 billion rubles.

OAO TATNEFT is going to consistently fulfill the commitments assumed and respect the rights of shareholders and investors in the Company’s activities. The powerful production potential and management expertise shall provide for the Company’s continued quality growth this year, improving the efficiency of its operations, increasing Authorized Capital value and strengthening of Company’s international reputation.