JPMorgan - KASE

The following tables show our average daily production and net oil and gas capital expenditures
incurred for each of the eight fiscal quarters ended December 31, 2002:
Mar. 31,
2002
Three Months Ended
June 30,
2002
Sept. 30,
2002
Dec. 31,
2002
Annual
Total
Naturalgas(MMcfd) ........................ — — — — —
Crudeoil(BOPD) ........................... 123,372 117,844 143,175 158,510 135,842
NGL(BOPD) ............................... — — — — —
Totalliquids(BOPD) ........................ 123,372 117,844 143,175 158,510 135,842
Mar. 31,
2001
Three Months Ended
June 30,
2001
Sept. 30,
2001
Dec. 31,
2001
Annual
Total
Naturalgas(MMcfd) ........................ — — — — —
Crudeoil(BOPD) ............................ 89,341 99,424 104,379 110,096 100,887
NGL(BOPD) ................................ — — — — —
Totalliquids(BOPD) ......................... 89,341 99,424 104,379 110,096 100,887
We are a vertically integrated oil company in Kazakhstan. This allows us to find the most optimal
crude oil netback either by exporting crude oil or by processing the crude oil at the Shymkent
refinery for sale in the domestic market. As a result, the above table combines our netbacks from
crude oil sales and from the sale of refined products derived from crude oil from our producing
fields as well as crude oil acquired by us through our trading activities. See “Business and
Properties — Downstream Operations: Refining, Marketing and Trading.”
Material Licenses
The Kazakhstani government owns the crude oil and natural gas in the subsoil of Kazakhstan. It
grants to producers exploration, production or exploration and production licenses for fixed
periods of time. HKM holds exploration and production licenses to the Kumkol South and South
Kumkol fields and the QAM fields. Turgai Petroleum holds the exploration and production
license for Kumkol North. Kazgermunai holds the exploration and production licenses for the
Akshabulak, Nurali and Aksai fields. In addition, HKM holds an exploration license for
undeveloped property covering a total of 341,992 acres in the South Turgai Basin.
Kumkol North field. The Kumkol North exploration and production license was issued to Turgai
Petroleum in December 1995, for a 25-year period. Under the license, Turgai Petroleum is
required to spend at least $1.4 million on a 3D seismic survey with processing and interpretation
covering a 127 square kilometre area. The hydrocarbon contract for Kumkol North was entered
into on April 26, 1996, for a term expiring December 20, 2020, subject to an extension upon
application by Turgai Petroleum. The hydrocarbon contract may be terminated if Turgai
Petroleum is in material default of the covenants under that contract. The development plan for
Kumkol North was revised in June 1999. Under the revised development plan for Kumkol North,
Turgai Petroleum committed to invest a specific amount in development of the Kumkol North
field. We expect Turgai Petroleum to meet or exceed the required level of capital expenditures.
We cannot assure you, however, that it will be able to do so. Turgai Petroleum has not to date
satisfied this commitment. The failure to satisfy the capital investment commitments with respect
to Kumkol North may result in the cancellation of the Kumkol North license. Our interest in
Kumkol North represented approximately 22% of our proved reserves as of January 1, 2002.
Under the HKM acquisition agreement, HKM has the contractual right to have the license for
Kumkol North reissued to it if the existing Kumkol North license is canceled. We cannot provide
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