13 March 2019, 13:07
The Outlook revision reflects Russneft's decreasing leverage, driven by improved per-barrel profitability on the back of higher oil prices and more production coming from depleted and hard-to-recover reserves, Fitch said.
Russneft's funds from operations net leverage (adjusted for operating leases and including long-term prepayments and preferred stock) fell to 3.4x in 2018 from 4.8x in 2017.
Fitch analysts believe that in the future Russneft should be able to generate moderately positive free cash flow (FCF). They also expect that the so-called 'tax maneuver' undertaken by the Russian state will not have material consequences for the company.
Russneft ranks among the top-6 largest oil companies by crude oil production in Russia. The company possesses assets in key Russian oil and gas provinces (West Siberia, Volga-Urals and Central Siberia) as well as in Azerbaijan. The proved and probable reserves (2P) of the company are over 200 million tonnes.