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Włodzimierz Karpiński, Minister of the Polish State Treasury, and Rafał Baniak, Under-Secretary of State at the Ministry of State Treasury, have visited one of four LOTOS Petrobaltic's drilling rigs operating in the Baltic Sea.

Upstream activity

Włodzimierz Karpiński, Minister of the Polish State Treasury, and Rafał Baniak, Under-Secretary of State at the Ministry of State Treasury, have visited one of four LOTOS Petrobaltic's drilling rigs operating in the Baltic Sea.

The Ministers held meetings with the Management Boards of Grupa LOTOS S.A. and LOTOS Petrobaltic S.A., as well as the employees working on the LOTOS Petrobaltic rig.

LOTOS Petrobaltic is the only Polish company extracting oil and gas under offshore licences (the Baltic Sea). Through its subsidiaries, the company also operates in the North Sea and the Norwegian Sea, as well as in Lithuania where LOTOS is the largest oil producer. In line with the adopted strategy, by the end of 2015 the company intends to achieve crude output of 24 thousand bbl/day.

Platforma wiertnicza LOTOS Petrobaltic 1.jpg

 

LOTOS to raise around PLN 1bn for development

The Extraordinary General Meeting of Grupa LOTOS, to be held on September 8th 2014, will decide whether to approve increasing the Company's share capital by issuing new shares, which would be offered to the Company’s shareholders. LOTOS expects to raise approximately PLN 1bn through the issue. The proceeds will be used to finance the Company’s strategy, which envisages further investments to increase the refinery's complexity and step up hydrocarbon production.

“Today, LOTOS not only plays a crucial role for Poland's energy security, but also significantly contributes to the country's economic growth,” says Paweł Olechnowicz, CEO of Grupa LOTOS S.A. “By pursuing investment projects in Poland, we intend to foster industrial growth, create new jobs, and improve Poland's competitiveness on international markets. Following the successful implementation of the 10+ Programme, investments in state-of-the-art liquid fuel production technologies and development of our hydrocarbon production operations will be a key to the Company's success.”

How much money is obtained from the issue will depend on the macroeconomic climate, capital market conditions, demand for the shares, and final terms and conditions of the offering.

As part of the proposed share capital increase, Grupa LOTOS will offer PLN 55m new ordinary shares to its existing shareholders, who will hold pre-emptive rights to acquire the shares. The proposed record date for the pre-emptive rights is November 18th 2014.

 

Development through investment

In late 2013, LOTOS Norge (a subsidiary of LOTOS Petrobaltic) acquired interests in 14 licences on the Norwegian Continental Shelf. The investment has allowed LOTOS to double its hydrocarbon production to 12.4 thousand bbl/day in Q2 2014.

LOTOS Petrobaltic holds two production and eight exploration licences in the Baltic Sea. In 2013, the company produced nearly 145 thousand tonnes of crude oil and nearly 16m Nm3 of natural gas from under the Baltic seabed. The B3 field, which is currently in production, will be operational until 2026 in accordance with the decision of the Ministry of the Environment, and, owing to the recent upgrade of the unmanned PG-1 platform, production in this unit is expected to remain stable at 160 thousand tonnes annually.

At the same time, LOTOS Petrobaltic and CalEnergy Resources Poland are working together to assess the feasibility of developing and launching production from the Baltic B4 and B6 natural gas fields. If the results are positive, commercial production is expected to commence in 2016/2017. The estimated aggregate production output of both fields is approximately 250m Nm3, while all recoverable resources of natural gas are estimated at 4bn Nm3.

Communications Office, Grupa LOTOS S.A., ul. Elbląska 135, 80-718 Gdańsk, Poland, tel. (+48) 58 308 87 31, (+48) 58 308 83 88, e-mail: media@grupalotos.pl