Polski Koncern Naftowy ORLEN S.A. ("PKN ORLEN") informs that on 12 August 2015 it excercised an option of early repurchase of crude oil obligatory inventories, sold to Cranbell Sp. z o.o. („Cranbell”) on 26 June 2014.

Due to the abovementioned on 12 August 2015 PKN ORLEN terminated the agreement for gathering and keeping of crude oil obligatory inventories (“Agreement for gathering and keeping of obligatory inventories”), which was concluded with Cranbell on 26 June 2014 and repurchase crude oil owned by Cranbell. The value of transaction amounted to ca. USD 301 m (i.e. ca. PLN 1 137  m). The crude oil price was established according to market quotations. On the day of conclusion of the Agreement for gathering and keeping of obligatory inventories, PKN ORLEN hedged purchase price of crude oil with future contract. Through the settlement of the hedging transaction purchase price of crude oil will be increased by ca. USD 406 m (i.e. ca. PLN 1 536  m). As a result of these operations PKN ORLEN will recognize in the second half of 2015 purchase of crude oil in the amount  of ca. USD 707 m  (i.e. ca. PLN 2 673  m).

Transfer of payment by PKN ORLEN and transfer of crude oil ownership to PKN ORLEN was made on 12 August 2015. The settlement of the hedging transaction will be made on 14 August 2015.

Additionally within the period of the Agreement of gathering and keeping of obligatory inventories Cranbell made payments to PKN ORLEN for guaranteeing of inventories storage.

All amounts presented in the announcement do not include VAT and have been calculated based on the average USD/PLN exchange rate as of 12 August 2015, as stated by the National Bank of Poland.

Cranbell is a SPV, owned in 19% by RBS Investments Netherlands B.V. and in 81% by Dutch company Cranbell B.V. Cranbell in its statutory activities includes turnover of crude oil.