TAQA Full Year 2008 Financial Results

Thursday, Mar 19, 2009

19th March, 2009, Abu Dhabi, UAE - Abu Dhabi National Energy Company PJSC, a publicly listed company on the Abu Dhabi Securities Exchange (ADX: TAQA), today reported financial results for the full year 2008.

Key highlights of the results for the full year 2008:

_ Net profit (after minority interests) grew 76% to AED 1.8 billion compared with AED 1.0 billion in 2007.

_ Basic earnings-per-share increased to 36 fils on the increased shares outstanding from the convertible bonds issued during the year versus 25 fils in 2007.

_ Total assets grew 25% to AED 86 billion at 31 December 2008 compared with AED 69 billion at year end 2007.

_ EBITDA1 of AED 10.2 billion and a margin of 60%, versus EBITDA of AED 5.2 billion and a margin of 63% in 2007.

_ Revenue of AED 16.8 billion, an increase of 102% from AED 8.3 billion for 2007.

o Revenue from the oil and gas business grew by 565% to AED 7.5 billion, from AED 1.1 billion as a result of the full consolidation of acquisitions completed in 2008.

o Revenue from the electricity and water business, excluding supplemental fuel, grew by 17% to AED 5.5 billion, from AED 4.7 billion for the same period in 2007.

o Revenue derived from gas storage grew by 67% to AED 506 million, compared with AED 303 million for the same period in 2007.

Upstream and Midstream

· Upstream and Midstream activity generated revenues of AED 8 billion (comprising oil and gas and gas storage), 47% of total revenues and contributing 46% of net profit.

· Average daily production was 114,1 mboe in 2008, split between TAQA Energy (6.7 mboe), TAQA Bratani (13.7 mboe) and TAQA North (93.7 mboe).

· Average net realized price of crude oil sold was US$83.39 per barrel for TAQA North, US$112.88 per barrel for TAQA Energy and US$70.49 per barrel for TAQA Bratani.

· Average net realized price for natural gas sold was US$8.16 per thousand cubic feet for TAQA North, US$10.45 per thousand cubic feet for TAQA Energy and US$6.24 per thousand cubic feet for TAQA Bratani.

· Drilling success rate of 99.7% for TAQA North.

· Results represent significant growth, following the successful integration of TAQA’s acquisitions in 2008.

Downstream

· Downstream activities generated revenues of AED 5.5 billion in 2008, excluding supplemental fuel, comprising 33% of total revenues in 2008, and 54% of net profit.

1 Earnings before interest, tax, depreciation and amortisation

· TAQA’s downstream capability now represents total global generation capacity (gross) of 10,514 MW.

· In 2008, TAQA produced a total of 47,704 GWh in 2008, compared with 48,229 GWh in 2007, a fall of 1%.

· TAQA’s total water desalination in 2008 was 191,150 MIG, with a capacity of 594 MIG.

· Power and water in the UAE accounted for a total of 79% of the total revenue.

· Technical availability of power generation businesses averaged 93% with an average capacity of 71%.

Finance

· Cash and cash equivalents as at 31 December 2008 was AED 4.1 billion, compared with AED 7.4 billion for 2007.

· Finance costs increased from AED 2.5 billion to AED 3.8 billion, to fund acquisitions.

· TAQA’s undertook a bond buy back programme in 2008 totalling AED 1.0 billion

· At 31 December 2008, the Group had available AED 8.4 billion (2007: AED 3.8 billion) of undrawn committed borrowing facilities in respect of which all conditions precedent had been met.

Key highlights of the results for Q4 2008:

_ Net profit, after minority interests, fell 64% to AED 233 million compared with AED 653 million in the same quarter in 2007, largely due to the fall in oil and gas prices and an impairment charge of AED 271 million (net of tax) taken in 2008.

_ EBITDA of AED 1.9 billion for Q408, giving an EBITDA margin of 50% versus EBITDA of AED 1.8 billion and a margin of 59% in the same period in 2007. EBITDA margin for 2008 excluding supplementary fuel was 42%.

_ Total revenue reached AED 3.7 billion compared with AED 3.0 billion for the same period in 2007, an increase of 23%.

o Revenue from oil and gas activities (including gas storage) grew 60% to AED 1.4 billion, compared with AED 0.9 billion for the same period in 2007. This increase reflects the acquisition of upstream assets in North America and Europe in 2008.

Lower average oil and gas prices experienced during the period have impacted on revenue.

o Average daily production was 118.9 mboe, split between TAQA Energy (6.0 mboe), TAQA Bratani (19.1 mboe) and TAQA North (93.8 mboe).

o Average net realized price of crude oil sold was US$43.48 per barrel for TAQA North, US$41.04 per barrel for TAQA Energy and US$54.08 per barrel for TAQA Bratani.

o Average net realized price for natural gas sold was US$5.93 per thousand cubic feet for TAQA North, US$11.95 per thousand cubic feet for TAQA Energy and US$7.02 per thousand cubic feet for TAQA Bratani.

o Revenue from the electricity and water business, excluding supplemental fuel, grew by 18% to AED 1.5 billion, from AED 1.3 billion for the same period in 2007.

In a Board meeting held on March 18, 2009, the Board of Directors of TAQA have recommended a cash dividend of AED 0.15 per share on all outstanding shares. This recommendation will be submitted for shareholder approval at TAQA’s Annual General Meeting to be held on April 21, 2009.

Comment

Peter Barker-Homek, Chief Executive Officer of TAQA, said:

“Following acquisitions by TAQA North in Canada and TAQA Bratani in the North Sea, 2008 was a year in which we began to execute upon our long-term strategic objective of building a diverse and equally distributed asset base in North America, Europe and the Middle East. The extension of our footprint brought with it significant new experience as an operator, upon which we continue to build.

Our diversification strategy has ensured that while the group benefited from the high oil price due to our expanded upstream operations in the first half of 2008, the strength of our midstream and downstream businesses helped to offset the sharp drop in oil prices in the second half of the year. We continue to have real confidence in the long-term growth prospects of the company in spite of short term pricing environment fluctuations, but will be prudent in taking on new projects and ensure that we are carefully controlling costs across the business - ultimately protecting profitability.

During the course of 2008, we have acted promptly and decisively in uncertain and volatile financial markets. As a result, TAQA is well capitalised with no short term funding requirements and significant available liquidity. This positions us well to continue to fulfil our long-term growth objectives throughout 2009 and to benefit from the opportunities that the market may present.”

Corporate activity during the period

January 2008 marked TAQA’s completion of its Cdn$5 billion acquisition of PrimeWest Energy Trust. TAQA North is now one of the top ten companies in Canada in terms of net proven natural gas reserves and in the top 12 companies in terms of oil and gas production.

In January 2008, TAQA agreed to a US$3.1 billion, one-year credit facility to partially finance the PrimeWest acquisition. The one year facility was refinanced in August 2008 and syndicated to multiple international lenders with a term of three years.

At its AGM in April 2008, TAQA declared a dividend of AED 0.10 per share to its shareholders.

In June 2008, TAQA announced the issuance of AED 4.15 billion (US$1.1bn) of convertible bonds which converted into common shares on 1 September 2008. The new shares commenced trading on the Abu Dhabi Securities Exchange on 16 October 2008.

On 7 July 2008, TAQA announced that TAQA Bratani had signed a Sale and Purchase Agreement with Shell U.K. Limited and Esso Exploration and Production (UK) Limited to purchase the equity pertaining to operating licenses for six offshore fields in the UK North Sea. The fields’ average daily production in the region of 40,000 barrels of oil equivalent (boe) represents a significant increase to TAQA’s existing European footprint. The US$438 million acquisition closed on the 1st December 2008.

In July, TAQA issued US $1.5 billion of notes under its Medium Term Note program. The offering consisted of US $1.0 billion of five year notes maturing in 2013 and US $0.5 billion of 10-year notes maturing in 2018.

In September 2008, as part of TAQA’s portfolio optimisation, the group sold a 20% interest in Shuweihat CMS International Power Company and a 50% interest in Shuweihat O&M Limited Partnership to Sumitomo Corporation. TAQA retains a 54% stake in this plant.

In December 2008, TAQA, and the Bergermeer project consortium, signed a Memorandum of Understanding with Gazprom, in respect of cushion gas for the Bergermeer gas storage facility. The gas storage facility will enhance the security of energy supply to Dutch and European consumers and will contribute significantly to the liquidity of the North-West European gas markets.

December 2008 also saw TAQA and RBS Sempra Commodities announce the creation of TAQA Gen X, a joint venture focused on investments in the downstream energy business in North America.

Simultaneously, TAQA Gen X announced its first investment in a tolling agreement for the Red Oak power plant, an 830 MW combined cycle gas turbine plant, located in Sayreville, New Jersey, USA.

TAQA Gen X will play an active role in ensuring the long-term power demands for the region continue to be met.

Note on comparative data

Since the beginning of 2007, TAQA has completed a number of acquisitions which have been fully or partially consolidated into the period under review. In Q2 2007, TAQA completed the acquisition of CMS Generation, contributing two months of revenue to that quarter. In subsequent months TAQA acquired Northrock Resources and Pioneer Canada, significantly increasing the company’s upstream assets. The largest company acquisition to date, PrimeWest, was completed on January 16, 2008.

The effect of these acquisitions should be considered when making year-on-year comparisons.

- ENDS -

Contact Details:

TAQA Investor Relations, Abu Dhabi

Tanis Thacker

Head of Investor Relations

+971 2 691 4933

Mohammed Mubaideen

Investor Relations Manager

+971 2 691 4964

TAQA Media Relations, Abu Dhabi

Reem Al Midwahi

PR Manager

+971 2 691 4940

London

Nick Bastin, Capital MS&L

+ 44 20 7307 5330 / +44 7855 866 478

nick.bastin@capitalmsl.com

Claire Maloney, Capital MS&L

+ 44 20 7307 5330 / +44 7789 637 174

Claire.maloney@capitalmsl.com

About Abu Dhabi National Energy Company PJSC (TAQA)

Founded in 2005, TAQA (Abu Dhabi National Energy Company (PJSC)) is a global energy company with a growing asset base of AED 86 billion (US$ 23.5 billion). One of the largest companies listed on the Abu Dhabi Securities Exchange (ADX), with 2008 revenue of more than AED 16 billion (US$ 4.4 billion), TAQA is a flagship corporation for the Government of Abu Dhabi.

TAQA’s strategic goal is to build and operate a geographically diverse global portfolio of energy businesses across the value chain. It has operations in power generation, water desalination, upstream oil/gas, pipelines, and gas storage.

TAQA employs approximately 2,800 people from 38 different nations and operates from its offices in:

Abu Dhabi; Ann Arbor, Michigan; Aberdeen; Amsterdam; Calgary and The Hague. This footprint is further extended through alliances with partners across Africa, the Middle East, Europe, North America and India.

TAQA carries Aa2 and AA- credit ratings from Moody’s and S&P respectively

Source: TAQA