1Q 2012 Financial Results

PRESS - RELEASE

JSC KazMunaiGas Exploration Production

1Q 2012 financial results

Astana, 15 May 2012. JSC KazMunaiGas Exploration Production ("KMG EP" or "the Company") announces its condensed consolidated interim financial statements for the three months ended March 31, 2012.

·; Revenues increased by 8% to 207bn Tenge (US$1,396m)[1] compared to the same period of 2011 on higher Brent and domestic prices offset by reduced export volumes.

·; The average price of Brent in the first three months of 2012 was 12% higher than in the same period of 2011, up from US$105 per barrel to US$119 per barrel.

·; Net profit amounted to 75bn Tenge (US$508m) and earnings per share - 1,070 Tenge (US$1.2 per GDR), an increase of 27% and 32%, respectively,compared to the same period of 2011.

Production Highlights

In the first three months of 2012 KMG EP produced 3,029 thousand tonnes of crude oil (249 kbopd), including the Company's stakes in Kazgermunai (KGM), CCEL and PetroKazakhstan Inc. (PKI) which is 5% less than in the same period of 2011.

JSC Uzenmunaigas ("UMG") produced 1,236 thousand tonnes (101 kbopd), which is 177 thousand tonnes less than in the same period of 2011. JSC Embamunaigas ("EMG") produced 675 thousand tonnes (55kbopd), which is 6 thousand tonnes less than in the same period of 2011. The total volume of the oil produced at the production facilities of UMG and EMG in the first three months of 2012 was 1,911 thousand tonnes of oil (156 kbopd), 9% less than in the same period of 2011. First quarter production volume was about 150 thousand tonnes (7%) behind the plan, primarily due to adverse weather conditions. As prompted by the first quarter performance indicators, the 2012 UMG annual target of 5.8 million tonnes looks rather challenging. Management expects the production to recover at a moderate pace. In the middle of the year following the second quarter production trend, KMG EP intends to confirm or update its 2012 annual production projection.

The Company's share in the production from KGM, CCEL and PKI for the three months of 2012 amounted to 1,119 thousand tonnes of crude oil (93 kbopd) or 4% more than in 1Q of 2011.

Crude oil sales

In the first three months of 2012 the Company's export and domestic sales from the UMG and EMG were 1,496 thousand tonnes (122 kbopd) and 457 thousand tonnes (37 kbopd) respectively.

The Company's share in the sales from KGM, CCEL and PKI was 1,105 thousand tonnes of crude oil (93kbopd). It includes 766 thousand tonnes (64kbopd) supplied to export markets.

Net Profit for the Period

Profit after tax (net income) in the first three months of 2012 was 75bn Tenge (US$508m). This represents a 27% increase compared to the same period of 2011, which is mainly explained by a higher oil price, domestic supplies price increase according to agreement reached with Government on 2012 and lower SG&A expenses partly offset by a decline in exports.

Revenues

The Company's revenues in the first three months of 2012 increased by 8% compared to the same period of 2011, and amounted to 207bn Tenge (US$1,396m). This was mainly due to a 14% increase in the average realized price to 104,302 Tenge per tonne (US$97.39 per barrel) partly offset by reduced export volumes.

Taxes other than on Income

Taxes, other than on income, in the first three months of 2012 were 75bn Tenge (US$508m), which is 4% higher compared to the same period of 2011. The increase is due to the progressive scale of applicable tax rates as a result of the higher oil price, partially offset by reduced production and export volumes.

Production Expenses

Production expenses in the first three months of 2012 were 31bn Tenge (US$209m), which is 4% higher compared to the same period of 2011. A significant part of the production cost increase is due to annual salary indexation from 1st January 2012 partly offset by a reduction of the number of repaired wells.

Selling, General and Administrative Expenses

Selling, general and administrative expenses in the first three months of 2012 were 20bn Tenge (US$136m), which is 21% lower compared to the same period of 2011, mainly due to lower fines and penalties, lower management fees to National Compnay Kazmunaigas as well as lower transportation expenses as a result of lower transportation volumes.

Cash Flows from Operating Activities

Operating cash flow in the first three months of 2012 was 68bn Tenge (US$457m), which is 46% higher compared to the same period of 2011, mainly due to the increase in oil price.

Capex

Purchases of property, plant and equipment and intangible assets (as per Cash Flow Statement) in the first three months of 2012 were 12bn Tenge (US$82m), which is 33% lower compared to the same period of 2011.

Cash and Debt

Cash and cash equivalents as at 31 March 2012 amounted to 213bn Tenge (US$1.4bn) compared to 207bn Tenge (US$1.4bn) as at 31 December 2011. Other financial assets (current and non-current) at 31 March 2012 were 555bn Tenge (US$3.8bn) compared to 511bn Tenge (US$3.4bn) as at 31 December 2011. Other financial assets include the NC KMG Bond and deposits. As at 31 March 2012 the outstanding amount of the Bond was 190bn Tenge (US$1.3bn).

78% of cash and financial assets (including the Bond) as at 31 March 2012 were denominated in foreign currencies and 22% were denominated in Tenge. Finance income accrued on cash and financial assets (including the Bond) in the first three months of 2012 was 5.6bn Tenge (US$38m).

Borrowings as at 31 March 2012 were 88bn Tenge (US$596m), the same as at 31 December 2011. Borrowings include 80bn Tenge (US$543m) of non-recourse debt of KMG PKI Finance B.V. related to the acquisition of the 33% interest in PKI.

Net cash position[2] at 31 March 2012 amounted to 680bn Tenge (US$4.6bn) compared to 629bn Tenge (US$4.2bn) as at 31 December 2011.

Income from Strategic Acquisitions

In the first three months of 2012 KMG EP's share of results of associates and joint ventures was 26bn Tenge (US$174m) compared to 22bn Tenge (US$148m) in the same period of 2011. The financial results of associates and joint ventures in the first three months of 2012 were primarily driven by the higher oil price compared to the same period of 2011.

Kazgermunai

In the first three months of 2012 KMG EP recognised 13bn Tenge (US$87m) of income from its share in KGM. This amount represents 50% of KGM's net profit of 15bn Tenge (US$99m) and a 0.2bn Tenge (US$1.5m) deferred income tax benefit net of 2.0bn Tenge (US$13m) from the effect of purchase price premium amortization.

KGM's net income increased by 20% in the reported period compared to the same period of 2011 mainly due to higher oil price.

PetroKazakhstan Inc.

In the first three months of 2012 KMG EP recognised 13bn Tenge (US$88m) of income from its share in PKI. This amount represents 33% of PKI's net profit of 16bn Tenge (US$109m) net of 3bn Tenge (US$21m) from the effect of purchase price premium amortization.

PKI's net income increased by 11% in the reported period compared to the same period of 2011 mainly due to higher oil price.

CCEL

As of 31 March 2012 the Company has recognised 20bn Tenge (US$136m) as a receivable from CCEL, a jointly controlled entity with CITIC Group. The Company has accrued 0.7bn Tenge (US$5m) of interest income in the first three months of 2012 related to the US$26.87m annual priority return from CCEL.

***

The condensed consolidated interim financial statements for the three months ended March 31, 2012, the notes thereto, and the operating and financial review for the period are available on the Company's website (www.kmgep.kz).

APPENDIX[3]

Tenge million

Tenge million

Tenge million

The following tables show the Company's realised sales prices adjusted for oil and oil products transportation and other expenses for the first three months of 2012 and 2011.

Notes to Editors

KMG EP is among the top three Kazakh oil and gas producers. The overall production in 2011 was 12.3mt (an average of 250 kbopd) of crude oil, including the Company's share in Kazgermunai, CCEL and PKI. The total volume of proved and probable reserves, as at the end of 2011 was 226mt (1.7bn bbl), including shares in the associates of about 2.1 bn barrels. The Company's shares are listed on the Kazakhstan Stock Exchange and the GDRs are listed on The London Stock Exchange. The Company raised over US$2bn in its IPO in September 2006. The International rating agency Standard & Poor's (S&P) confirmed KMG EP's "BBB-" corporate credit rating in December 2011 and "GAMMA-6" rating in September 2011.

For further details please contact us at:

KMG EP Public Relations (+7 7172 97 79 08)

Yelena Pak

E-mail: [email protected]

KMG EP Investor Relations (+7 7172 97 5433)

Asel Kaliyeva

E-mail: [email protected]

Pelham Bell Pottinger (+44 207 861 3147)

Elena Dobson

E-mail: [email protected] 

Forward-looking statements

This document includes statements that are, or may be deemed to be, ''forward-looking statements''. These forward-looking statements can be identified by the use of forward-looking terminology including, but not limited to, the terms ''believes'', ''estimates'', ''anticipates'', ''expects'', ''intends'', ''may'', ''target'', ''will'', or ''should'' or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. These forward-looking statements include all matters that are not historical facts. They include, but are not limited to, statements regarding the Company's intentions, beliefs and statements of current expectations concerning, amongst other things, the Company's results of operations, financial condition, liquidity, prospects, growth, potential acquisitions, strategies and as to the industries in which the Company operates. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances that may or may not occur. Forward-looking statements are not guarantees of future performance and the actual results of the Company's operations, financial condition and liquidity and the development of the country and the industries in which the Company operates may differ materially from those described in, or suggested by, the forward-looking statements contained in this document. The Company does not intend, and does not assume any obligation, to update or revise any forward-looking statements or industry information set out in this document, whether as a result of new information, future events or otherwise. The Company does not make any representation, warranty or prediction that the results anticipated by such forward-looking statements will be achieved.