PGNiG: Recommendation of the PGNiG Management Board concerning distribution of the 2012 net profit and allocation of retained earnings

The Management Board of Polskie Górnictwo Naftowe i Gazownictwo SA ("PGNiG", the "Company") resolved today to recommend that the General Meeting of PGNiG allocates the 2012 net profit of PLN 1,918,481,599.73 to the Company's statutory reserve funds. The PGNiG Management Board also proposed to allocate retained earnings of PLN 625,926,472.51 to the Company's statutory reserve funds.
In the coming years, PGNiG S.A. intends to maintain a high level of capital expenditure. The spending will focus on projects involving construction and extension of underground gas storage facilities, and maintaining of hydrocarbon production capacities, as well as on projects related to the exploration for and appraisal of crude oil and natural gas deposits.
In 2013, PGNiG SA intends to spend approximately PLN 2.4bn on upstream projects. In Poland, the Company has plans to explore for gas from both conventional and unconventional deposits (shale gas). In 2013, PGNiG SA plans to perform drilling work on 33 wells. As part of its conventional exploration programme, the Company intends to drill 20 wells, with related planned capital expenditure to the order of PLN 360m. As regards unconventional oil and gas exploration, drilling of 13 wells is planned (with the related capital expenditure estimated at around PLN 500m). PGNiG SA will also continue its exploration activities outside Poland. A large portion of the Company's financial resources will be invested in field development and well completions, as well as in upgrading and extending the existing gas extraction facilities (approximately PLN 960m).
In 2013, PGNiG SA will pursue investment projects in other business segments as well. The plans include construction and extension of underground gas storage facilities, with the related spending of approximately PLN 600m.
After a relevant opinion is received from the PGNiG Supervisory Board, the Management Board will make a recommendation to the General Meeting to adopt a resolution on the proposed profit distribution.