Polski Koncern Naftowy ORLEN S.A. ("PKN ORLEN") informs that on 28 January 2014 the agreement for gathering and keeping of crude oil obligatory inventories (“Agreement”), concluded on 28 December 2012 between PKN ORLEN and Whirlwind Sp. z o.o. („Whirlwind”), has expired.

Due to the abovementioned and realization of the Act of 16 February 2007 on stocks of crude oil, petroleum products and natural gas, the principles of proceeding in circumstances of a threat to the fuel security of the State and disruption on the petroleum  market (Journal of Laws no. 52, item 343 as amended) PKN ORLEN purchased crude oil owned by Whirlwind. The value of transaction amounts to ca. USD 396 m (i.e. PLN 1 223 m, based on the average USD/PLN exchange rate as of 27 January 2014, as stated by the National Bank of Poland). The crude oil price was established according to market quotations.

Transfer of payment by PKN ORLEN and transfer of crude oil ownership to PKN ORLEN was made on 28 January 2014.

On the day of conclusion of the Agreement, PKN ORLEN hedged purchase price of crude oil with futures contract. Through the settlement of the hedging transaction purchase price of crude oil will be decreased by ca. USD 11 m (i.e. PLN 34 m, based on the average USD/PLN exchange rate as of 27 January 2014, as stated by the National Bank of Poland). As a result of these operations PKN ORLEN will recognize in the first quarter 2014 purchase of crude oil in the amount  of ca. USD 385 m  (i.e. PLN 1 189 m, based on the average USD/PLN exchange rate as of 27 January 2014, as stated by the National Bank of Poland).

Additionally within the period of the agreement of gathering and keeping of crude oil obligatory inventories Whirlwind made payments to PKN ORLEN for guaranteeing of inventories storage.

All amounts presented in the announcement do not include VAT.

Whirlwind is a SPV, established at the request of RBS Polish Financial Advisory Services Sp. z o.o., which is a subsidiary of Royal Bank of Scotland N.V. Whirlwind in its statutory activities includes turnover of crude oil.

See also: regulatory announcement no 284/2012 dated 28 December 2012.