PGNiG: Current Report No. 96/2014

Recognition of material impairment losses and write-downs at the PGNiG GroupCurrent Report No. 96/2014
The Management Board of Polskie Górnictwo Naftowe i Gazownictwo SA (“PGNiG”, “Company”) hereby announces that, as at June 30th 2014, PGNiG recognised impairment losses/write-downs and made write-offs of costs related to its production assets, tangible assets under construction and natural gas inventories, which reduce the PGNiG Group's operating result for Q2 2014 by an aggregate amount of approximately PLN 636m.
The amount comprises:
i) tangible assets under construction related to the exploration for and evaluation of mineral resources: PLN 298m, including geophysical surveys: PLN 124m, impairment losses on wells drilled and dry wells written off: PLN 174m (Exploration and Production segment),
ii) hydrocarbon production assets: PLN 197m (Exploration and Production segment),
iii) methane-rich gas inventories: PLN 141m (Trade and Storage segment).
The impairment losses were caused by continued review and clear up of Company’s assets using new mark-to-market methodology based on market prices. Most of all, the impairment losses and write-offs of related costs on exploration and evaluation assets was based on a review of the licences held and efficiency of the exploration work performed in 2003-2014.
The data presented in this report are estimates only and may differ from the actual figures, which will be released on August 14th 2014 in an interim report.