financial results 2nd quarter 20072nd quarter, 2007 · 2014-11-03 · production million cubic feet...

July 31, 2007

Financial Results2nd Quarter 20072nd Quarter, 2007

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Forward-Looking Statementsand Cautionary Note

This report contains forward-looking statements. We may also make written or oral forward-looking statements in our periodic reports to the Mexican National Banking and Securities Commission and the U.S. Securities and Exchange Commission, in our annual report, in ouroffering circulars and prospectuses, in press releases and other written materials and in oral statements made by our officers, directors or employees to third parties.

We may include forward-looking statements that address, among other things, our: • drilling and other exploration activities; • import and export activities; • projected and targeted capital expenditures and other costs, commitments and revenues; and liquidity.

Actual results could differ materially from those projected in such forward-looking statements as a result of various factors that may be beyond our control. These factors include, but are not limited to:

• changes in international crude oil and natural gas prices; • effects on us from competition; • limitations on our access to sources of financing on competitive terms; • significant economic or political developments in Mexico; • developments affecting the energy sector; and • changes in our regulatory environment• changes in our regulatory environment.

Accordingly, you should not place undue reliance on these forward-looking statements. In any event, these statements speak only as of their dates, and we undertake no obligation to update or revise any of them, whether as a result of new information, future events or otherwise. These risks and uncertainties are more fully detailed in PEMEX’s most recent Form 20-F filing, as amended, with the U.S. Securities and Exchange Commission (www.sec.gov) and the PEMEX prospectus filed with the National Banking and Securities Commission (CNBV) and available through the Mexican Stock Exchange (www.bmv.com.mx). These factors could cause actual results to differ materially from those g g ( ) ycontained in any forward-looking statement.

The U.S. Securities and Exchange Commission (SEC) permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. We use certain terms in this document, such as total reserves, probable reserves and possible reserves, that the SEC's guidelines strictly prohibit us from including in filings with the SEC. Investors are urged to consider

l l th di l i F 20 F d d “Fil N 0 99” il bl f t M i N i l 329 Fl 38

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closely the disclosure in our Form 20-F, as amended, “File No. 0-99”, available from us at www.pemex.com or Marina Nacional 329, Floor 38, Col. Huasteca, Mexico City 11311 or at (52 55) 1944 9700. You can also obtain this Form from the SEC ‘s website, www.sec.gov. Investors are also welcome to review the annual report to the CNBV, available at www.pemex.com.

EBITDA and free cash-flow are non-US GAAP measures.

Content

Second Quarter Operating and Financial Highlights

Upstream

Downstream

International Trade

Financial Results

Other Relevant Topics

Questions and AnswersQuestions and Answers

3/31

Financial Highlights: 2Q07

Billion pesos

Apr – Jun 2006

Apr – Jun 2007 Ch

Apr – Jun 2007

Billion dollars

Total Sales

Income Before Taxes and

2006 2007 Change 2007

292.6 277.6 -5%(15.0) 25.7

Income Before Taxes and Duties

Net Income (Loss)

163.1

12.1

176.6

37.1

13.4

25.0

16.4

3.4

8%

EBITDA (1) 225.2 217.9 (7.3) 20.2-3%

• In the 2Q07 total sales decreased 5%, primarily explained by lower crude oil export revenues

4/31(1) Earnings before interests, taxes, depreciation and amortization. Excludes IEPS.Numbers may not total due to rounding.

Operating Highlights: 2Q07

Production

Apr – Jun 2006

Apr – Jun 2007 Change

Thousand barrels per day

3,166 - 5 %3,329 (163)

3,593 - 5%3,788 (185)

• Crude Oil

• Liquid Hydrocarbons

p y

3,166 5 %3,329 (163)

427449 (22) - 5 %

Crude Oil

• Natural Gas Liquids

Million cubic feet per day6,033 14%5,281 752• Natural Gas

Million cubic feet per day

Million barrels per day

1,5481,571 (23) -1%

Th i i t l d ti i il d t hi h l

• Refined Products

5/31

• The increase in natural gas production was primarily due to higher volumes extracted in the Northern Region

Numbers may not total due to rounding.

Content


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Financial Results



6/31

Upstream: Crude OilProduction Thousand barrels per day

T t l d il d ti

3,329 3,166

• Total crude oil production decreased by 163 thousand barrels per day:

Li ht d t li ht d il

- 5%

2,330 2,134

1,032999 – Light and extra-light crude oil production increased by 0.4 and 17% respectively, as a result of completion of wells i th S th t Off h

Apr - Jun 2006

Apr - Jun 2007

in the Southwestern Offshore region

– Heavy crude oil production d d 8% lt f

30% 33%decreased 8% as a result of the decline in production of the Cantarell asset, which was partially compensated b K M l b Z

70% 67%

7/31

Light and Extra-lightHeavy

by Ku-Maloob-Zaap


Upstream: Natural GasProductionMillion cubic feet per day

14%

• Natural gas production increased by 752 MMcfd:

14%

2 639

6,0335,281

increased by 752 MMcfd:

- Non-associated gas increased by 19%, as a result of the activity in the 3,3943,072

2,2102,639

Northern region.

- Associated gas increased by 10%, due to greater production in the Offshore

,

Apr - Jun Apr - Junproduction in the Offshore regions.

58% 56%

42% 44%

8/31

Non associatedAssociated


Upstream: DrillingWells completedNumber of drilled wells

6%

1220

179169

• As programmed, the number of exploration wells was 12, a reduction of 8 compared to

- 6%

159 157

2Q06, primarily due to lower activity in Lankahuasa, Campeche East and West, and Crudo Ligero projects.

Apr - Jun Apr - Jun

• To strengthen development in deep waters 3 rigs were contracted.

• Development wells totaled 157, representing a reduction of 2.Exploration

89% 93%

11% 7%

9/31

Exploration

Development


Upstream: Developments

Main developments during 2Q07

• completion of 7 development wells,• 21 workovers,• 13 minor workovers,• completion of the Takín A platform, and• drilling of 2 horizontal wells

Cantarelldrilling of 2 horizontal wells.

Programme for the second half of 2007

• beginning of operations of pipeline Takín A and Akal TQ platform• beginning of operations of pipeline Takín A and Akal TQ platform,• completion of 18 development wells,• drilling of 2 subsea completion wells,• beginning of operation of 2 trains at the Nitrogen Recovery Unit in

Ciudad Pemex,• construction of crude and gas pipelines for the Akal DB and BN

platforms, and• completion of 3 horizontal wells.

10/31External factors, not controlled by PEMEX, could affect the execution of the programmed activities.


Main developments during 2Q07• On June 26 a record production of 563 Mbd was achieved,• the PB-KU-S platform began operations

Ku-Maloob-Zaap

• the PB-KU-S platform began operations,• 4 marine pipelines of 14.4 km were completed,• the Floating Production, Storage and Offloading unit, The Lord of the

Sea, began operating.

• Start of operations of production platforms PB-Zaap-C and PB-KU-H• Completion of 5 main pipelines measuring 18.2 km.,

D illi f 5 d l t ll

Programme for the second half of 2007

• Drilling of 5 development wells, • Injection of 300 MMcfd of nitrogen to maintain pressure in the fields.



Collaboration Agreement with British Petroleum

• On July 24, 2007, Pemex-Exploration and Production and British Petroleum subscribed three collaboration agreements, a broad technical-scientific one, and two of specific natures focused towards the study of marine technology in deep waters and for injection in reservoirsPetroleum injection in reservoirs.


Content


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Financial Results



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Downstream: Natural Gas ProcessingDry gas productionMillion cubic feet per day

• The increase in on-shore natural gas processing was due to an increase in production of sweet gas in Burgos

8%On-shore natural gas processingMillion cubic feet per day

7%

8%

3,386 3,643

909 1,148

4,4264,123

Apr - Jun Apr - Jun

3,2783,214 Natural gas liquids productionThousand barrels per day

Apr - Jun Apr - Jun - 5%

449 42722% 26%

14/31

SweetSour

Numbers may not total due to roundingApr - Jun Apr - Jun

78% 74%

Downstream: Oil RefiningCrude oil processThousand barrels per day

- 2%

• Total crude oil processing decreased primarily due to scheduled maintenance

1,311 1,283

514 470 scheduled maintenance

• During the second quarter of 2007, primary distillation capacity utilization rate

797 814capacity utilization rate decreased from 85.9 to 84.2%

• Heavy crude oil processing decreased as a result of our

Apr - Jun Apr - Jun

Heavy Currents

decreased as a result of our strategy to maximize diesel and gasoline production, and minimize fuel oil production

61% 63%

39% 37%

15/31

Heavy Currents

Light Currents

Numbers may not total due to rounding

61% 63%

Downstream: Refined ProductionRefined products productionThousand barrels per day Change

-1%

- 0.2%460 459

1,5481,571

• Total refined products production decreased by 1%

• Gasoline production

1%

- 3%

- 3%437450

329 318

334332

• Gasoline production decreased 0.2% and diesel production increased by 1%

• Fuel oil production

Apr - Jun Apr - Jun

28% 30%• Fuel oil production

decreased by 3%Gasoline(1)

DieselFuel OilOthers(2) 28%28%

21% 21%

21%21%

16/31

(1) Includes transfers from La Cangrejera.(2) Includes liquefied petroleum gas from Pemex-Gas and Basic Petrochemical and Pemex-Refining, jet fuel, parafines, extract of furfural yaeroflex.Numbers may not total due to rounding

Others( ) 28%28%

Downstream: Variable Refining Margin and Franchises

Variable refining marginDollars per barrel

Number of franchised gas stationsAs of June of

17% 5%

7,340 7,69010.512.3

2006 2007Apr - Jun Apr - Jun

• The increase in the variable refining margin was primarily a result of higher international prices of refined

d t

• As of June 30, 2007, the number of franchised gas stations was 7,690

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products

Downstream: Petrochemicals ProductionPetrochemicals production Thousand tons

Change

14%-1%3,169

• During 2Q07, the increase in

40%

131183278

2822,790

petrochemicals production was primarily driven by:

- An increase in the manufacturing of methane

14%2,7082,377

manufacturing of methane derivatives and byproducts and,

- greater production of 5%9%10%

Apr - Jun Apr - Jun

ethane derivatives.

Ethylene85%85%

5% 6%9%10%

18/31

Ammonia

OthersNumbers may not total due to rounding

%%

Content


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International Trade

Financial Results

Other Relevant Aspects


19/31

International Trade

Crude Oil Exports Volume of: (1)

Thousand barrels per dayExports distribution100% = 1,725 Mbd

- 5%United States of America

1,813 1,725242 214

- 5%

Rest of America8%

79%

1,571 1,511

Light

Europe

Far East

79%

8%1%

Apr - Jun Apr- Jun

13% 12%g

Heavy

Mexican crude mix

Far East87% 88%

20/31

average price Dollars per barrel: 56.5 56.7(1) At 60º F, does not include processing agreementsNumbers may not total due to rounding

International Trade: Other ProductsExports Imports

- 25% 20%

Refined ProductsThousand

167221 494410

barrels per day- 2%

224229

16%

Petrochemicals Thousand barrels

224229

- 41%

9986

Natural GasMillion cubic feet 1632 346

589

21/31

per day

Source: PMI

Apr - Jun Apr - Jun Apr - Jun Apr - Jun2006 20062007 2007

Content


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International Trade

Financial Results

Other Relevant Aspects


22/31

Income Statement: Sales

• Total sales decreased primarily due to lower income obtained by crude oil exports

BilliDomestic Sales Exports

250.7132.2

Billions pesos

292 6141.6

Apr - Jun 2006

- 5% 4% - 14% 3% 6% 7% - 13% - 20% - 22%

151.1 151.1292.6 115.3 20.7 5.6 134.4 15.6 1.0

276 5139.7147.2

Exports Ref. Prod

Nat. Gas

Petro. Crude, Gas &

Refin. Petro.Sales Domestic(1)

Apr - Jun 2007

276.5130.4 130.4

277.6147.2

119.6 21.9 6.0 117.0 12.6 0.8

23/31

Prod. (without IEPS)

Gas Gas & Condensates

(1) Includes IEPS.Numbers may not total due to rounding.

Income Statement: Costs and Operating Expenses

• The increase in operating expenses and costs was primarily due to higher product purchases.

Billi

+

Billion pesos

128.5 111.5 5.6 11.5 17.9292.6

+ +=

Apr - Jun 2006 9% 12%

- 5%

- 2%1%

109.6 6.1 13.6 20.1277 6

129.3 + +=

Cost of S l

Distribution Admin. Cost of the R f

Sales Costs d O

Apr - Jun 2007

277.6

24/31Operating Expenses

Sales Reserve for Retirement Payments

and Op. Expenses

Numbers may not total due to rounding

Income Statement: Net Income

Billion pesos

• Net income increased from Ps. 12.1 billion t Ps. 37.1 billion, primarily explained by the effect of revenues.

Billion pesos

12.0

1.0292.6

128.5

164.1 163.1 151.0Apr - Jun

2006

- 5% 1% - 10% 8% - 8%

(28.3)277 6

129.3

Costs & CFC(1) & Income Taxes & Sales Operating Net

Apr - Jun 2007

37.1277.6

148.3 176.6 139.5

- = - = - =

25/31

Op. Expenses

Other Net Expenses (Revenues)

before Taxes & Duties

Duties

(1) Integral cost of Financing. Numbers may not total due to rounding.

Income Income (Loss)

Balance Sheet

Assets Liabilities & Equity

Billion pesos

Total Assets:

Change ChangeTotal Liabilities +

1,2481,158

549

1,158

+8% +8%

1,248

CurrentDebt

Equity:347

398549

636+15%-14%

FixedReserve for Retirement

737690418

483+7%+16%

Other

Retirement PaymentsOthersEquity:

120 113144

-11 72115

Jun 2006 Jun 2007

-7% +25%

26/31Numbers may not total due to rounding

11Jun 2006 Jun 2007Jun 2006 Jun 2007

Total and Net Debt

Total Debt Change Net Debt

Billion pesos

14%549636

-30%- 14%

- 16%477570

549

10%66 72

477534

376

Long TermTotal debt decreased Ps. 87 billion,

90% 87%

Jun 2006 Jun 2007

66Jun 2006 Jun 2007

Long Term

Short term

100% 100%

primarily due to a decrease in long-term debtNet debt decreased Ps. 158 billion

90%

10%

87%

13%

27/31Numbers may not total due to rounding

Content


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International Trade

Financial Results



28/31

Other Relevant Topics (1/2)

• On July 17, 2007, PEMEX and the Petroleum Workers Union signed the collective labor contract from August 1, 2007 to July 31, 2009.Collective g , y ,

• The new agreement includes a 4.25% salary increase and a 1.6% increase in benefits.

Collective Labor Contract

• In June 2007, PEMEX and Ecosecurities signed letters of intent for thetransfer of carbon dioxide emission-reduction certificates.

U d thi t PEMEX ill i l t th j t t dCarbon Bonds

• Under this agreement, PEMEX will implement three projects to reducegreenhouse gas emissions by increasing thermal efficiency of theboilers and through a change in the vapor traps in the Salina Cruzand Salamanca refineries.

29/31

Other Relevant Topics (2/2)• On July 5, 2007, three incidents occurred in the gas pipeline from

Valtierrilla, Guanajuato to Guadalajara, Jalisco, which motivated the suspension of gas supply:

– One explosion took place in the sectioning valve located in the Salamanca-Valle Santiago road;

– another explosion took place in the valve room of the same gas li i C l G j t d

Incidents

line in Celaya, Guanajuato; and

– a gas line leak occurred in the community of Puerto.

– No injuries were reported. Natural gas supply was returned to normal le els on J l 9normal levels on July 9.

• On July 10, 2007, there was an explosion in the valve room of Queretaro. This affected the following pipelines:

Mexico Guadalajara natural gas pipeline;– Mexico-Guadalajara natural gas pipeline;

– Cactus-Guadalajara LPG pipepline; and

– Poza Rica Salamanca pipeline.

30/31

– The fire resulting from the explosion was brought under control and natural gas supply was returned to normal levels on July 15.

Content


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International Trade

Financial Results



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financial results 2nd quarter 20072nd quarter, 2007 · 2014-11-03 · production million cubic feet...

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