The Management Board of Grupa LOTOS S.A. hereby reports that in view of the unstable macroeconomic environment due to the global economic crisis and given the Grupa LOTOS S.A. ongoing investment programmes, the Management Board has prepared and adopted a package of anti-crisis measures for the LOTOS Group. The primary objectives of the measures is to ensure implementation of those investment programmes which are the most important for Grupa LOTOS S.A. and its future value for the shareholders, and to guarantee the Company’s liquidity in 2009.
The key elements of the package are cost savings of approximately PLN 170m in 2009 and suspension or abandonment of approx. PLN 220m of the investment expenditure planned for 2009, which in effect should improve LOTOS Group’s cash flow by about PLN 390m.
Given the uncertain market situation and limited possibilities to raise financing, the Company’s Management Board has decided to suspend the implementation of investment projects provided for in the Company's strategy for 2006–2012 with the capex totalling approximately PLN 2.1bn. The limitations will not affect the ongoing key investment projects: the 10+ Programme, the development of the Yme field on Norwegian continental shelf, or the planned expenditure on the development of the B8 and B23 fields on the Baltic Sea within the Petrobaltic development programme.
The limitations will mean an over 25% reduction of the LOTOS Group’s total capex planned for 2009-2012, and a nearly 40% capex reduction if the Company’s investment commitments connected with the 10+ Programme and the development of the Yme field are taken into account. This objective will be achieved through postponement of the implementation of certain projects.
The Company’s Management Board will closely monitor the market situation and in the event of any significant changes it will revise the plans described above.
The legal basis for the publication of this current report is Art. 56.1.1 of the Public Offering Act – Inside Information.