ROMPETROL WELL SERVICES S.A.
ANNUAL REPORT OF THE BOARD OF DIRECTORS for the 2023 financial year
Page 1 of 34
ANNUAL REPORT
OF THE BOARD OF DIRECTORS
FOR THE 2023 FINANCIAL YEAR
drawn up in accordance with Law no. 24/2017 regarding issuers of financial instruments and
market operations and FSA Regulation no. 5/2018 regarding issuers of financial instruments
and market operations
Company
ROMPETROL WELL SERVICES S.A.
Headoffice: Ploiesti - str. Clopotei nr. 2 bis
Phone no.: 0244/544321, 0244/544101
Fax: 0244/522913
Fiscal Identification Code: RO 1346607
No. in the Trade Register: J29/110/05.03.1991
Transaction market: BUCHAREST STOCK EXCHANGE
The subscribed and paid-up capital: 27.819.090 lei
The main characteristics of securities issued by the company
No. of shares: 278.190.900
Nominal value (lei/share): 0,10 lei
Grade and type of securities: “A” nominative
ROMPETROL WELL SERVICES S.A.
ANNUAL REPORT OF THE BOARD OF DIRECTORS for the 2023 financial year
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Content
1.
Analysis of the
company’s
activity
…
…...
…………………………………….………....
3
2. The tangible assets of the company ……………….………………………….………...
13
3.
The market of securities issued by the company
..……
…………
……….……..……...
1
3
4. Management of the company …………………………………………………….……… 16
5.
The financial
-
accounting situation
…
..
…………………………………………….……...
1
9
6.
Corporate governance
……
…..
…………………………………………………….…….
21
7. Annexes..……………………………………………………….……………………………
32
ROMPETROL WELL SERVICES S.A.
ANNUAL REPORT OF THE BOARD OF DIRECTORS for the 2023 financial year
Page 3 of 34
1. Analysis of the company’s activity
Rompetrol Well Services S.A. ("RWS") is one of the most important companies in the specific
market segment in Romania, offering a wide range of specialized services for oil and natural gas
wells including cementing, stimulations, nitrogen services, tubular running operations and rentals
of equipment and tools.
In 2023, the upstream market continued to see low investment and work levels from customers.
Purchase prices for the goods and services contracted by the company, for the performance of
current activities, continued their upward trend, and delivery times recorded fluctuations, as a
result of the regional context.
Rompetrol Well Services (RWS) managed to secure its leading position in the specific market
segment through the diversity and flexibility demonstrated in offering specialized services aligned
to the requirements of each individual client. RWS provides a wide range of services for oil and
natural gas wells (cementation, stimulation, well casing operations, etc.).
-RON
2021
2022
2023
Operational income, out of which: 45.961.135
53.228.897
73.487.511
Rendered services 44.185.085
52.295.150
72.067.998
Operational expenses, out of which: (46.227.637)
(53.825.976)
(62.682.833)
Depreciation and Amortization (3.996.830)
(4.895.557)
(5.921.961)
Adjustments on provisions, net (545.161)
717.751
(47.250)
Net financial income 2.040.690
3.474.405
3.050.169
EBIT 1.774.188
2.877.328
13.854.847
Net result 1.629.634
2.449.517
11.767.863
Availability in the cash-pooling system 55.022.238
46.117.041
50.730.823
Payroll – Number of employees 149
133
135
ROMPETROL WELL SERVICES S.A.
ANNUAL REPORT OF THE BOARD OF DIRECTORS for the 2023 financial year
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1.1. a) Description of the core activity of the company
Having over 70 years of experience, Rompetrol Well Services SA is a competitive, solid and
reliable partner, offering a wide range of services in the oil and gas industry.
The object of the Company's activity consists in: provision of services for oil and gas wells, rental
of well tools and equipment and other services. The services offered: cementing, stimulations,
tubular running services, that are performed in the oil fields in Romania and abroad.
b) Specifying the date of establishment of the company
Company Rompetrol Well Services S.A. was established in 1951 and in the more than 70 years
of activity, although it operated with different structures and under different names, the main
profile was the execution of special operations at oil and gas wells in Romania.
Government Decision no. 1213 of November 1990 decided that the Company should become a
joint-stock company, according to Law no. 15/1990, under the name of PETROS S.A., the name
under which it operated until September 2001, when it changed its name to ROMPETROL WELL
SERVICES S.A.
c) Description of any significant merger or reorganization of the company, its subsidiaries
or controlled companies, during the financial year
During 2023 and 2022, respectively, there were no mergers or reorganizations of the company.
d) Description of acquisitions and/or disposals of assets
The Company's purchases were mainly represented by equipment necessary for the current
activity. Thus, the equipment modernization program continued in 2023, focusing on updating
technologies for cementing and well stimulation services. The company has not disposed of
assets with significant accounting value.
e) Description of the main results of the evaluation of the company's activity.
1.1.1. Elements of general assessment:
a) profit:
At the end of 2023, Rompetrol Well Services records a positive result (profit) of 11,767,863 lei,
380% higher than the level of profit recorded in the previous year.
ROMPETROL WELL SERVICES S.A.
ANNUAL REPORT OF THE BOARD OF DIRECTORS for the 2023 financial year
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b) turnover:
In 2023, the turnover was 72,563,673 lei, 38% higher than the one recorded at the end of 2022,
respectively 14% higher than the budgeted one. The impact was generated by an increase
recorded in the area of secondary cementing services, as well as by an alignment of tariffs with
current market conditions.
c) export:
In 2023, the Company provided services in Denmark, based on specific contract. The turnover
obtained from these activities was in the amount of 404,263 RON.
d) costs:
In 2023, the operating expenses adjusted with elements of the nature of provisions were in the
amount of 62,635,583 lei, 15% higher than those registered in the previous year, their evolution
being influenced both by the direct costs related to the basic activity (cement, additives,
equipment maintenance and repairs).
e) own market share %;
In Romania, the company holds market shares up to 70% for different types of special services
provided.
f) liquidity (available in the account, etc.).
From the point of view of liquidity, the Company maintained the ability to cover current liabilities
from current assets, the current liquidity indicator reaching a level of 4.85 on December 31, 2023.
1.1.2. Evaluation of the technical level of the company
Description of the main rendered services
The main works performed by the company ROMPETROL WELL SERVICES are the following:
• Cementing and pumping services of various kinds:
casing cementing, primary cementing, secondary cementing (plug cementing and squeeze
cementing), well kills, circulations, milling and replacement of fluids, interventions in damaged
wells, various pumping, etc.
• Stimulation services:
acid pumping, transport of fluids (acid solutions, emulsions and enzymes, etc.), water shut-off.
• Special operations with liquid nitrogen:
lift-off operation, foam acidizing, pressure integrity testing;
• Operations with mechanical tongs for well casing;
• Rental of tools and equipment for various drilling-extraction works;
• Analyzes in our own laboratory for cements and well fluids;
• Preparation of cement slurry according to the recipes;
Operations with cement retainers.
ROMPETROL WELL SERVICES S.A.
ANNUAL REPORT OF THE BOARD OF DIRECTORS for the 2023 financial year
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a) the main markets for each product or service and the distribution methods
The company ROMPETROL WELL SERVICES has maintained its position on the domestic
market, being constantly concerned with improving the quality of the services provided. Having
production capacities throughout the country as well as a qualified and well-trained workforce in
the field of providing special services to oil and gas wells, ROMPETROL WELL SERVICES
promptly provides the services required by their beneficiaries, regardless of the location.
The main markets for Rompetrol Well Services are in Central and Eastern Europe.
b) the share of each category of products or services in the revenues and in the total
turnover of the company for the last three years;
The share of each category of services in the turnover for the years 2021, 2022, 2023 is presented
as follows:
Type of service
2021 2022 2023
Actual value
(RON)
% Actual value
(RON)
% Actual value
(RON)
%
1 2 3 4 5 6 7
Cementing-Pumping
services
24.543.531
55.0% 34.845.343
66.0% 57.540.957
79.3%
Stimulation services 14.872.756
33.3% 13.930.332
26.4% 10.661.775
14.7%
Nitrogen services 2.305.249
5.2% 1.533.679
2.9% 2.537.335
3.5%
Casing Running services 563.528
1.3% 704.998
1.3% 742.348
1.0%
Tools Rental services 38.831
0.1% 130.603
0.2% 75.642
0.1%
Other services 2.273.261
5.1% 1.623.091
3.1% 1.005.617
1.4%
TOTAL 44.597.157
100% 52.768.046
100% 72.563.673
100%
c) the new products considered for which a substantial volume of assets will be affected
in the future financial year as well as the stage of development of these products.
The equipment modernization program of recent years focused on updating technologies for
cementing and well stimulation services, respectively tubular running and acidizing services. The
high-pressure pumping equipment is in accordance with the current safety requirements of the
industry. The company continues to implement effective cementing and well stimulation
technologies, meeting the operational requirements of customers.
1.1.3. Evaluation of the technical-material supply activity (indigenous sources, import
sources)
Information on security of supply sources, prices of raw materials and stock sizes of raw materials
and supplies.
The main types of materials needed to carry out the activity are: class G cement and specific
additives, fuels and lubricants, auto spare parts and technological equipment, secured on the
basis of firm contracts concluded annually, which ensures stability and safety of the company's
operation in optimal conditions. The levels of stocks of raw materials and spare parts vary
ROMPETROL WELL SERVICES S.A.
ANNUAL REPORT OF THE BOARD OF DIRECTORS for the 2023 financial year
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depending on the volume of activity expected for the next period. The purchase prices are the
prices applied on the market.
1.1.4. Evaluation of the selling activity
a) Description of sequential sales evolution on the domestic and/or foreign market and
medium- and long-term sales prospects;
The evolution of revenues is presented in the following table:
-
RON
202
1
202
2
202
3
Sales by activities, out of which:
44
.
597
.
157
52.768.046
72.563.673
Income from services provided 44.450.951
52.295.150
72.067.998
Income from sale of goods
146
.
206
472.896
495.67
5
Despite the constantly changing market conditions, the Company has managed to secure its
leading position on the specific market segment through diversity and flexibility in offering
specialized services tailored for each individual client. From an operational point of view, the
Company implemented measures to ensure the availability of labor in order to fulfill all orders.
From a commercial point of view, the Company participated in all publicly announced tenders in
order to ensure the activity for the next period.
It is estimated that during the year 2024 the Company will register a level of sales similar to 2023.
As before, the Company's flexibility in terms of the type of services provided, together with a
strong financial position, including cash availability, will allow it to maintain a high level of activity.
b) Description of the competitive situation in the field of activity of the company, of the
market share of the products or services of the commercial company and of the main
competitors;
In the conditions of an increasingly competitive environment and a cautious level of activity in the
oil and gas industry, the Company managed to maintain the market share for most of the services
provided in Romania, while at the same time increasing the complexity of the services provided.
The company has a market share up to 70% of the specific services market.
The main competitors of the Company in terms of primary cementing activity are: Schlumberger,
Halliburton, Baker Hughes.
c) description of any significant dependence of the company on a single customer or on a
group of customers whose loss would have a negative impact on the company's revenues.
It can be stated that ROMPETROL WELL SERVICES depends on the position of OMV - PETROM
BUCUREŞTI S.A., a customer that represents over 65% of the company's sales. To reduce this
risk of dependence, the company aims to increase the share of special well services provided to
other E&P players on the local market and expand the activity on the foreign market.
ROMPETROL WELL SERVICES S.A.
ANNUAL REPORT OF THE BOARD OF DIRECTORS for the 2023 financial year
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1.1.5. Evaluation of aspects related to the company's employees/staff
a) Specifying the number and level of training of the company's employees as well as the
degree of unionization of the workforce;
The company carried out training of employees, mainly through internal training programs, to
ensure obtaining the maximum benefits from the exploitation of existing equipment, the
continuous raising of the level of competence of employees and to create a safe work
environment.
The staff structure as of December 31, 2023 is as follows:
Total number of staff, of which: 145
-
high education
63
- with secondary education 10
-
skilled workers
72
The degree of labor unionization is 90.34%.
b) Description of the relations between the manager and the employees, as well as any
conflicting elements that characterize these relations.
The relations between the manager and employees are based on collaboration and are carried
out on the basis of the "Collective Labor Agreement", existing at the company level, without
identifying conflicting elements.
c) Assessment of issues related to the impact of the issuer's core activity on the health
and safety of workers
The QHSE (Quality, Health, Safety, and Environment) management system of Rompetrol Well
Services reflects the provisions of a comprehensive set of current legal requirements, based on
detailed internal procedures and risk assessments. All company employees are covered by the
current QHSE management system.
To enhance the company's health and safety performance, specific measures were implemented
during the 2023 reporting period:
Quarterly meetings of the Health and Safety Committee
Safety audits, BBS (Behavior-Based Safety) audits, and the annual Safety Audit plan
involving management
Internal audit plan for 2023
Investigation of incidents according to Romanian legislation
Job Safety Analysis (JSA) and risk assessment for all operations
Mandatory training, professional training through the Annual Training Plan
As part of its QHSE management system, the company provides awareness campaigns for road
safety, GPS monitoring of the fleet, and defensive driving programs to ensure transportation
safety (indicators are reported in weekly management meetings).
ROMPETROL WELL SERVICES S.A.
ANNUAL REPORT OF THE BOARD OF DIRECTORS for the 2023 financial year
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Risk assessments are conducted in accordance with Romanian legislation and undergo periodic
review and updates whenever there is a process change or new risks are identified. The risk
register is updated quarterly, and employees are encouraged to report risks during regular training
sessions, either directly or anonymously through the SSM mailbox in each unit. In case of
incidents, the company applies the QHSE responsibility policy, which involves a "stop work"
practice without blaming any employees.
Health and safety training is regularly provided in compliance with current legislation:
Training on legal requirements (monthly)
Professional training matrices
Other professional training for skill development (forklift drivers, professional drivers,
IWCF, Bosiet, etc.) included in the Annual Training Plan
Road safety training
HSE hazards of products and risk control for employees and contractors are communicated
through training on safety data sheets. Furthermore, to monitor, track, evaluate, and manage
product-related incidents, the company uses procedures, simulations, and training such as:
Policy on hazardous substances;
Communication of chemical hazards;
Handling of chemical products;
Storage and disposal of chemical substances;
Chemical exposure.
All training expenses are covered by the company. Communications and audits are also extended
to contractors, along with communications on various HSE topics.
With 236,867 hours worked in 2023, Rompetrol Well Services did not record any loss time injuries
or workplace accidents.
1.1.6. Evaluation of aspects related to the impact of the issuer's core activity on the
environment
The synthetic description of the impact of the issuer's core activities on the environment as well
as any existing or anticipated litigation regarding the violation of environmental protection
legislation.
The company's activities, both at the headquarters in Ploiești and at all branches and workplaces
nationwide, strictly adhere to current environmental legislation, thus avoiding any potential
litigation resulting from non-compliance with current laws.
The company conducts periodic checks to ensure compliance with environmental requirements
according to the environmental permits for its workplaces nationwide to avoid penalties or fines
that could be imposed for not meeting obligations in this field. Additionally, the company has
observed an increasing focus from suppliers and customers on environmental aspects, prompting
a commitment to identifying sustainable solutions to reduce ecological footprints.
ROMPETROL WELL SERVICES S.A.
ANNUAL REPORT OF THE BOARD OF DIRECTORS for the 2023 financial year
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Ensuring compliance with current environmental regulations is a complex process through which
the company conducts a detailed assessment of activities impacting the environment, both for on-
site technological processes and documentation, identifying any non-conformities and proposing
solutions for compliance, prevention, or reduction of environmental impact.
In July 2023, an audit of the Integrated Management System (environment, quality, safety, and
health at work) was carried out by DNV Business Assurance, confirming Rompetrol Well Services
S.A.'s full compliance with ISO 9001:2015, ISO 14001:2015, and ISO 45001:2018 standards. The
company conducts annual internal audits of environmental, quality, and health and safety
management at all its bases, as well as inspections at client locations. In 2023, the company
underwent a QHSE (Environment, Emergency Situations, Health and Safety at Work) audit by
the KMG Group, achieving a score of 90.5% (a 2.15% increase from 2022), corresponding to the
rating "Excellent."
In December 2023, Rompetrol Well Services S.A. revised his Environmental Permit No. PH-66
for the Ploiești headquarters. Annual endorsements for environmental permits were also obtained
for the company's other workplaces.
Rompetrol Well Services has set several environmental objectives, including:
Monitoring and reporting environmental indicators required for the Sustainability Report
Eliminating all types of waste identified within the company through authorized firms
Optimizing electricity and gas consumption by using LED lamps and new low-consumption
heating systems
Reducing paper consumption through electronic archiving
Periodic monitoring of waste collection areas and safe storage
Training personnel working for and on behalf of the organization in environmental
protection
Preventing any accidental pollution
Continuing the process of renewing the fleet with new-generation vehicles equipped with
Euro 6 engines, contributing to the reduction of emissions into the atmosphere
Training all staff on waste sorting, reducing specific consumption, and particularly
implementing the company's environmental policy and objectives
The management of ROMPETROL WELL SERVICES ensures the necessary resources and
framework for implementing established environmental objectives, actively involving itself in all
projects aimed at continuous improvement of environmental protection through the services
provided.
According to Law No. 105/2006 and Emergency Ordinance No. 196/2005 regarding obligations
to the Environmental Fund, Rompetrol Well Services S.A. pays monthly fees for pollutant
emissions into the atmosphere from fixed sources and an annual fee for packaging introduced
into the market, following declarations of obligations to the Environmental Fund.
ROMPETROL WELL SERVICES S.A.
ANNUAL REPORT OF THE BOARD OF DIRECTORS for the 2023 financial year
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1.1.7. Evaluation of the research and development activity
Specifying the expenses in the financial year as well as those anticipated in the next financial year
for the research and development activity.
In 2023, the Company did not record research and development expenses.
1.1.8. Evaluation of the company's activity regarding risk management
Description of the company's exposure to price, credit, liquidity and cash flow risk. Description of
the company's policies and objectives regarding risk management.
The activity carried out by the Company implies its exposure to the following risks:
- price risk: the Company has a flexible pricing policy, which allows it to react and adapt to any
price fluctuations that may appear in the market;
- credit risk: the Company's activity is financed from its own sources, but the impact of commercial
credit could not be completely eliminated. The company manages customer credit in a procedural,
flexible manner, through the contracting strategy established as an essential risk distribution
mechanism. The Company's management constantly monitors receivables and their collection;
- interest rate risk: the company has not contracted bank loans, thus not being influenced by
interest rate volatility. For the availabilities placed in the cash pooling system, the interest income
is variable in relation to the ROBOR evolution;
- liquidity risk: until now the liquidity risk has been estimated as low, as the Company has managed
to achieve a stable balance between the maturity of receivables generated by sales and the
enforceability of debts for operational and investment activity.
- the risk of exchange rate variations: most of the Company's revenues are reported in RON and
EUR. The gap between the registration of amounts in foreign currency and their settlement cannot
generate significant patrimonial effects as a result of the exchange rate variation.
More details regarding risks faced by the Company are presented in the Financial Statements for
the year 2023, in Note 23.
1.1.9. Elements of perspective regarding the company's activity
a) Presentation and analysis of trends, elements, events or uncertainty factors that affect
or could affect the liquidity of the commercial company compared to the same period of
the previous year.
The activity carried out by the Company did not cause dysfunctional cash flows, being
compensated by the efficiency of the management of existing liquidity. Commitments to suppliers
were paid rhythmically. The registered arrears do not present the risk of significant penalties. As
of December 31, 2023, the Company is not involved in litigation regarding the payment of
outstanding debts. The company ensured permanent efficiency in honoring contracts throughout
the country.
The prospects of expanding service activities on foreign markets, however, require rational
decisions in the careful use of liquidity when concluding new contracts.
ROMPETROL WELL SERVICES S.A.
ANNUAL REPORT OF THE BOARD OF DIRECTORS for the 2023 financial year
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The main objectives for 2024
Continuation of offering high quality services in all the main activities carried out by the Company.
Taking into account the current market context, the Company is analyzing the possibility of
expansion on the service market in the Middle East region, as well as the expansion of the activity
in Central and Western Europe. In this sense, the Company continued discussions with possible
local partners, including considering the opening of an operational base in the area.
b) Presentation and analysis of the effects of capital expenditures, current or anticipated,
on the financial situation of the company compared to the same period last year.
The operation of the Company's activity was financed from its own sources, without requiring the
contracting of loans from banking institutions or other legal entities.
In the category of debts, there are no outstanding debts of interest or other loans committed from
banking institutions, but only the effect of the application of the new leasing standard.
The permanent trend for the constructive and functional improvement of the drilling installations,
imposed by the need to obtain a technical-economic efficiency of the extraction wells, led to the
need to make investments in order to be able to respond to the market requirements.
A share of 79% of the increase recorded in tangible assets, in the amount of 2.2 million RON, is
represented by the purchase and/or modernization of the installations and equipment used in the
operations carried out at the drilling wells and other ancillary operations, as well as laboratory
equipment.
Approximately 21% of the total investments made by the Company in 2023 concerned works
carried out in order to rehabilitate and modernize operational bases and replace IT equipment.
The company secured its own financial resources for the full implementation of the investment
budget for 2023.
c) Presentation and analysis of events, transactions, economic changes that significantly
affect the income from the core activity.
Despite the constantly changing market conditions, the Company has managed to secure its
leading position in the specific market segment through diversity and flexibility in offering
specialized services tailored for each individual client. It provides a wide range of services for oil
and natural gas wells (cementing, stimulation, well casing operations, etc.).
During the past year, Rompetrol Well Services carried out a number of 95 primary cementing
operations, 319 secondary cementing operations and 389 stimulation operations, a total number
higher than the one recorded in the previous year. Thus, the volume of operations performed for
the company's clients increased by 18% compared to the level of 2022.
ROMPETROL WELL SERVICES S.A.
ANNUAL REPORT OF THE BOARD OF DIRECTORS for the 2023 financial year
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2. The tangible assets of the company
2.1. Specifying the location and characteristics of the main production capacities owned
by the commercial company.
The patrimonial assets of tangible type allow a flexible organization in the territory to promptly
fulfill the orders of the beneficiaries.
The place of service provision is identified at the beneficiaries, not in the organizational perimeter
of the Company, the use of the production capacities being dependent on the orders received
from the beneficiaries.
The location of the land and buildings on the geographical area is identified in the following
localities: Ploiesti (Prahova County), Campina (Prahova County), Razvad (Dâmboviţa County),
Leordeni (Arges County), Mihaesti – Stuparei (Valcea County), Potcoava (Olt County), Craiova
(Dolj County), Tg. Carbunesti (Gorj County), Slobozia - Conachi (Galati County), Ianca (Braila
County), Timişoara (Timis County), Medias (Sibiu County), Moinesti (Bacau County), Videle
(Teleorman County).
The main production capacities are represented by: cementing aggregates, containers, tanks,
cementing laboratory equipment and other types of vans and drilling tools.
2.2. Description and analysis of the degree of wear and tear of the Company's assets.
Working outdoors at wells, traveling on hard-to-reach roads and using corrosive materials implies
a high degree of wear and tear, compensated by the investments of recent years. The automotive
specifics of the production capacities imply, the recognition of some maintenance costs resulting
from the adaptation and implementation of the imperative normative acts specific to European
integration and environmental protection issues: ADR transport licenses, rovignetes,
tachographs, environmental taxes, taxes for first registration, local taxes, etc.
2.3. Specifying the potential issues related to the right of ownership of the tangible assets
of the company.
For all tangible assets, the right of ownership is recognized, according to the documents held
and the regulations in force.
3. The market of securities issued by the company "ROMPETROL WELL SERVICES" S.A.
3.1. Specifying the markets in Romania and other countries where the securities issued by
the company are traded.
Securities issued by ROMPETROL WELL SERVICES S.A. are admitted to the rate of the
Bucharest Stock Exchange by decision no. 133/ 26.03.1998 and are traded on this market in the
STANDARD category in the sector of securities issued by Romanian legal entities, from
18.06.1998, under the symbol PTR. The securities issued by the company are category A -
registered shares.
As of 31.12.2023 the share capital is 27,819,090 lei, equivalent to 278,190,900 shares with a
nominal value of 0.10 lei/share and is distributed among the holders as follows:
1. KMG INTERNATIONAL N.V. Netherlands 20.311.015 lei (73,0111 %)
2. KJK BALKAN HOLDING S.a.r.l Luxembourg 2.970.995 lei (10,6797 %)
3. Other shareholders (4512 shareholders) 4.537.080 lei (16,3092 %)
ROMPETROL WELL SERVICES S.A.
ANNUAL REPORT OF THE BOARD OF DIRECTORS for the 2023 financial year
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Shareholder structure
3.2. Description of the company's policy regarding dividends. Specifying the dividends
due/paid/accumulated in the last 3 years and, if applicable, the reasons for the eventual
reduction of dividends during the last 3 years.
The decision to declare and pay dividends is taken during the Ordinary Annual General Meeting
of Shareholders upon the recommendation of the Board of Directors. The recommendations
regarding the amount of the dividend and the method of payment are adopted during the meeting
of the Board of Directors to propose the distribution of the profit based on the year-end results.
The policy provides a differentiated approach to determining the volume of dividends with regard
to the Company, depending on:
The nature and profitability of the commercial activity carried out by the Company and its
capital needs;
Anticipated equity capital needs for the fulfillment of activity plans and investment projects;
The effective volume of dividends will take into account the financing needs with equity capital
for:
Financing capital investments in existing assets;
Financing of investment projects regarding the part that requires the allocation of own
funds according to the agreed project financing structure;
Debt repayment;
Other relevant factors influencing the company's cash flows.
The Board of Directors prepares proposals regarding the effective volume of dividends distributed
for the reporting period.
The dividend distribution rate, subject to the other provisions of this Policy, is set at a minimum of
30%, as long as there are sufficient cash availability, calculated as follows:
Cash balance N + Net cash pooling balance N + Cash from operations N +1 + Cash from
investments N + 1 + Financial costs N + 1 + Mandatory loan repayments N + 1
KMG
International
NV (NL),
73.01%
KJK Balkan
Holding
S.a.r.l, (Lux)
10.68%
4512
shareholders
with holdings
below 3%
each; 16,31%
ROMPETROL WELL SERVICES S.A.
ANNUAL REPORT OF THE BOARD OF DIRECTORS for the 2023 financial year
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where N is represented by the year for which the distribution is made, while N+1 represents the
following year. For N+1, the calculation is prepared based on the budget.
Dividends are distributed to the Company's shareholders in proportion to their holdings in the
Company.
The final decision will be taken by the appropriate corporate bodies of the Company.
The value of the dividends is identified when the decision to declare and pay the Dividends is
taken.
The GMS decision regarding the declaration and payment of dividends reflects the following:
- dividend value per share;
- the registration date and the corresponding ex date, which identify the shareholders entitled to
the dividend;
- dividend payment date;
- any other legal requirements mentioned in the legal provisions in force.
For the financial year ended on December 31, 2021, EGMS from 27.04.2022 approved the
distribution as dividends of the net profit in the amount of 1,629,634 lei, as a dividend, respectively
0.005857970 gross lei/share and at the same time approved the change in the destination of the
reserves constituted by the company's net profit obtained in previous years in the amount of
15,977,937 RON and the distribution of this amount as dividends to shareholders, respectively
0.057435153 RON gross/share, as well as the change in the destination of the amount of
29,935,254 RON from other reserves and the distribution of this amount as dividends to
shareholders, respectively 0.107606877 RON gross/action. Thus, for the year 2021, the total
value of the dividend was 0.1709 lei gross/share.
For the financial year ended on December 31, 2022, EGMS from 26.04.2023 approved the
distribution as dividends of the net profit in the amount of 2,449,517 lei, as a dividend, respectively
0.008805 gross lei/share.
For the financial year ended on December 31, 2023, EGMS from 25(26).04.2024 is to decide on
the way to distribute the profit. The proposal of the Board of Directors is to distribute the net profit
as dividends in the amount of 11,767,863 RON, respectively 0.042301 gross lei/share.
Until December 31, 2023, the Company paid the following dividends:
- 94% of the gross dividend approved for the 2020 financial year;
- 93% of the gross dividend approved for the 2021 financial year;
- 93% of the gross dividend approved for the 2022 financial year
3.3. Description of any activities of the company to purchase its own shares.
The company did not carry out activities for the purchase of its own shares.
3.4. If the company has subsidiaries, specifying the number and nominal value of the
shares issued by the parent company held by the subsidiaries.
Not applicable.
3.5. If the company has issued bonds and/or other debt securities, the presentation of how
the commercial company pays its obligations to the holders of such securities.
Not applicable.
ROMPETROL WELL SERVICES S.A.
ANNUAL REPORT OF THE BOARD OF DIRECTORS for the 2023 financial year
Page 16 of 34
4. Management of ROMPETROL WELL SERVICES S.A.
According to the Articles of Association, the Company is managed by a Board of Directors
composed of 5 members, appointed by the Ordinary General Meeting, who may also be
shareholders of the company, natural or legal persons, of Romanian or foreign citizenship,
respectively nationality.
At the beginning of 2023, the Board of Directors had the following members: Yedil Utekov, Stefan
Georgian Florea, Vasile Gabriel Manole, Olga Turcanu, Eugeniu Moby Henke, elected by the
General Meeting of Shareholder on 27.04.2022 for a 4-year term starting with 30.04.2022.
Through the Decision of the Board of Directors no. 1 from 02.05.2022, Yedil Utekov was elected
as the Chairman of the Board of Directors starting on 30.04.2022.
Through the Decision of the Board of Administration no. 1 from 02.05.2022 starting from
30.04.2022 Georgian Stefan Florea was appointed General Manager and Roxana Luiza Moise
was appointed Financial Manager, for a mandate equal to that of the administrators who
appointed them.
On 20.03.2023, Mr. Yedil Utekov resigned from the mandates of President and member of the
Board of Directors and member of the Audit Committee starting on 01.05.2023 (last day of
mandate being 30.04.2023).
In the General Meeting of Shareholders dated 26.04.2023, Mr. Batyrzhan Tergeussizov was
elected a member of the Company's Board of Directors for a term that begins on 01.05.2023 and
expires on 30.04.2026 (the date of the expiration of the mandate of the other members of the
Board of Administration).
Through the Decision of the Board of Administration no. 1 of 02.05.2023, Mr. Batyrzhan
Tergeussizov was elected President of the Board of Directors starting from 01.05.2023.
Thus, as of the end of 2023, the composition of the Board of Directors is as follows:
Batyrzhan Tergeussizov – the Chairman of the Board of Directors
Georgian Stefan Florea – Member / General Manager
Olga Turcanu – Member
Vasile Gabriel Manole – Member
Eugeniu – Moby Henke – Member
4.1. Presentation of the list of company administrators and the following information for
each administrator:
a) CV (name, surname, age, qualification, professional experience, position and length of
service;
• Yedil Utekov - Kazakh citizen, born in 1976
Chairman of the Board of Directors for the period 30.04.2022 - 30.04.2023.
Term of office: 30.04.2022 – 30.04.2023.
Yedil Utekov graduated from the Faculty of Chemical Engineering of Natural Resources and
Hydrocarbons from the Astrakhan State Technical University in Russia and started his career in
the oil and gas industry in 2001 as a process operator at the Akasaraisky Gas Processing Plant
from Russia, following that between September 2001 and June 2002 he became an operator for
ROMPETROL WELL SERVICES S.A.
ANNUAL REPORT OF THE BOARD OF DIRECTORS for the 2023 financial year
Page 17 of 34
ZAO Intergaz Central Asia, Kazakhstan. Later, starting from June 2002, his career growth started
from the position of engineer at the Atyrau Refinery and went to Manager for Ecology, Health and
Safety Technology. Between April 2005 and April 2010, he worked at Agip KCO, in Atyrau,
Kazakhstan, the last position he held within this company was that of Group Coordinator for
Technical Control and Inspection, between August 2008 and April 2010.
He has solid professional experience in the oil and gas industry, holding management positions
in various fields, working in various companies such as: Atyrau Refinery, Agip KCO and
KazMunayGas.
• Batyrzhan Tergeussizov - Kazakh citizen, born in 1984
Chairman of the Board of Directors for the period 01.05.2023 - 31.12.2023.
Term of office: starting with 01.05.2023 until 30.04.2026.
Mr. Batyrzhan Tergeussizov has graduated from Almaty University of Power Engineering and
Telecommunication, Electrical Engineering faculty and holds a master’s degree in Business
Administration (MBA) from Maastricht School of Management / Almaty Management University.
Before joining the Group, Mr. Tergeussizov held the position of General Manager of Linde Gas
Kazakhstan TOO for more than seven years and had successfully managed the entity’s business
activities in Kazakhstan and Central Asia. Before this position, Mr. Batyrzhan Tergeussizov had
several management roles within Siemens TOO, such as Country Division Lead - Energy Service
Division, Business Unit Lead - Services for Oil & Gas and Industrial Application, and Head of
Service Group.
• Georgian Stefan Florea- Romanian citizen, born in 1982
Member of the Board of Directors during the period 30.04.2022 – 31.12.2023
Term of office: 4 years starting on 30.04.2022
He graduated from the Ploiesti University of Oil and Gas. Mr. Florea holds a Master's degree in
reservoir engineering obtained at the Ploiesti University of Petroleum and Gas.
Georgian Stefan Florea has been with Rompetrol Well Services since 2007, successfully fulfilling
his duties in such roles as - initially at the operational level, holding the positions of petroleum
engineer DST division, field engineer at the cementing division, petroleum engineer technical
department, representative of Rompetrol Well Services & Rompetrol SA in Kurdistan, Sales
Coordinator and up to management level, Deputy General Manager of Rompetrol Well Services
since March 2018.
Olga Turcanu - Romanian citizen, born in 1979
Member of the Board of Directors between 30.04.2022 - 31.12.2023.
Term of office: 4 years starting on 30.04.2022.
Olga Turcanu studied international economic relations and economic law at the Academy of
Economic Sciences of Moldova having the bachelor and master levels. In 2013, Olga Turcanu
was accepted as a Member of the Association of Chartered Certified Accountants (ACCA), and
starting from 2018 she has the status of an Fellow ACCA.
She gained professional experience in tax consultancy, financial audit in the oil and gas industry,
economic analysis, budgeting, business planning, taxation, investment project analysis, corporate
finance.
She worked in various companies such as: PriceWaterhouseCoopers, Mechel Trade House,
Bluehouse Capital Group, Rominserv.
• Vasile Gabriel Manole - Romanian citizen, born in 1980
Member of the Board of Directors between 30.04.2022 – 31.12.2023.
Term of office: 4 years starting on 30.04.2022.
ROMPETROL WELL SERVICES S.A.
ANNUAL REPORT OF THE BOARD OF DIRECTORS for the 2023 financial year
Page 18 of 34
Mr. Vasile Gabriel Manole graduated from the Faculty of Economic Sciences, Transilvania
University Brasov, majoring in Finance, Banks, Insurance. He also holds a diploma of in-depth
postgraduate studies - strategies and financial accounting techniques - at Transilvania University
Brasov.
He joined the KMG International Group in 2005, occupying managerial positions in the financial
area in several entities within the KMG International Group, including the position of economic
director of Rompetrol Rafinare SA between November 2010 - May 2013 and 2016 - 2018.
Vasile Gabriel Manole holds the position of Financial Manager of Rominserv SRL and his main
duties are the representation of the company and the financial management of the company. Also,
Vasile Gabriel Manole holds the position of the Chairman of the Investment Initiation committee
within the Kazakh-Romanian Energy Investment Fund, an entity within the KMG International
Group.
• Eugeniu – Moby Henke - Romanian citizen, born in 1973;
Member of the Board of Directors in the period 30.04.2022- 31.12.2023.
Term of office: 4 years starting on 30.04.2022.
He is a lawyer, a graduate of the Faculty of Law of the University of Bucharest (1992-1996) and
has a Master’s degree in Administrative Sciences (1997-1999) from the National School of
Political and Administrative Studies in Bucharest.
He has professional experience in the following fields:
- consultancy for public and private companies (organizations), government agencies and
individuals;
- development and elaboration of corporate systems, legal analysis of transactions, projects;
- protection of clients' rights in the general courts of jurisdiction at all levels
- elaboration, negotiation and legal support in the execution of contracts, agreements and other
legal documents;
- experience as Director of the legal department of the KMG International Group, in the teams for
a series of projects (commercial, legislative, etc.);
b) any agreement, understanding or family relationship between the respective Administrator and
another person due to which the respective person was appointed as Administrator;
To the knowledge of the administrators, there was no agreement, understanding or family
connection between the administrators of the Company and another person due to which they
were appointed administrators.
c) the Administrator's participation in the Company's capital;
According to the Register of shareholders of the company, consolidated on 31.12.2023, issued
by the Central Depository, none of the Administrators participates in the share capital of the
Company.
d) the list of people affiliated with the company.
None of the members of the Company's Board of Directors is affiliated with Rompetrol Well
Services S.A. in the sense of ASF Regulation no. 5/2018.
ROMPETROL WELL SERVICES S.A.
ANNUAL REPORT OF THE BOARD OF DIRECTORS for the 2023 financial year
Page 19 of 34
4.2. Presentation of the list of members of the company's executive management.
For each, the presentation of the following information:
a) the term for which the person is part of the Executive Management;
During 2023, the management of the Company was delegated to the following Managers:
Role Name and surname Period
General Manager FLOREA GEORGIAN STEFAN 01.01.2023 - 31.12.2023
Financial Manager MOISE LUIZA ROXANA 01.01.2023 - 31.12.2023
b) any agreement, understanding or family relationship between that person and another person
due to which that person was appointed as a member of the Executive Management;
We are not aware of any cases of agreements, agreements or family ties between the members
of the executive management and other persons due to which they were appointed to the position.
c) the respective person's participation in the capital of the commercial company.
According to the Register of shareholders of the company, consolidated on 31.12.2023, issued
by the Central Depository, no member of the Executive Management participates in the share
capital of the Company.
4.3. For all persons presented in 4.1. and 4.2. specify any disputes or administrative
procedures in which they have been involved, in the last 5 years, related to their activity at
the issuer, as well as those regarding the capacity of the respective person to fulfill their
duties within the issuer.
None of the people in the management of the Company has been involved in litigation or
administrative procedures in the last 5 years.
5. The financial-accounting situation
Presentation of an analysis of the current economic-financial situation compared to the last 3
years, with reference at least to:
a) balance sheet elements: assets that represent at least 10% of total assets; cash and others
liquid assets; reinvested profits; total current assets; total current liabilities;
Starting with the year ended on December 31, 2012, the individual financial statements of the
Company were drawn up in accordance with the provisions of the Order of the Minister of Public
Finance no. 1286/2012 for the approval of the accounting regulations in accordance with the
International Financial Reporting Standards applicable to companies whose securities are
admitted to trading on a regulated market, Order of the Minister of Public Finance no. 2844/2016
with all subsequent amendments and additions.
For the purpose of preparing these financial statements, in accordance with Romanian legislative
requirements, the functional currency of the company is considered to be the Romanian leu
(RON).
ROMPETROL WELL SERVICES S.A.
ANNUAL REPORT OF THE BOARD OF DIRECTORS for the 2023 financial year
Page 20 of 34
Summary of the patrimonial elements:
- RON
202
1
202
2
202
3
Total Assets, out of which:
153
.
439
.
577
123.254.400
125.397.777
Fixed assets
39
.
255
.
033
51.247.292
49.138.507
Current assets 114.184.544
72.007.108
76.259.270
Total Liabilities, out of which:
153
.
439
.
577
123.254.400
125.397.777
Share capital, out of which: 28.557.446
28.557.446
28.557.446
Paid
-
up subscribed capital
27
.
819
.
090
27.819.090
27.819.090
Legal reserves 5.563.818
5.563.818
5.563.818
Other equity
10
3.068.569
56.
728
.
487
55.515.450
Current result 1.629.634
2.449.517
11.767.863
Debts due under one year
12
.
531
.
044
19.095.17
2
15.722.168
Debts due above one year
2.089.065
10.859.960
8.271.032
b) profit and loss account
Summary of income and expenditure elements:
-
RON
202
1
202
2
202
3
Total income, out of which:
48
.
700
.
607
57.879.281
77.369.727
Operational income 45.961.136
53.228.897
73.487.511
Financial income
2
.
739
.
471
4.650.384
3.882.216
Total expenditure
46
.
926
.
418
55.001.95
4
63.514.880
Operational expenditures, out of which:
46.227.637
53.825.975
62.682.833
-
expendable supply
11
.
406
.
887
15.250.181
19.654.780
- staff expenses 16.573.739
19.427.316
21.212.561
-
assets depreciation expenses
3
.
996
.
830
4.895.557
5.921.961
- other expenses 14.250.811
14.252.922
15.893.531
Financial
expenses
698
.
781
1.175.979
832.047
Gross result
-
profit
1
.
774
.
18
8
2.877.32
8
13.854.847
Current and deferred profit tax
144
.
554
427
.
811
2.086.984
Net result
-
profit
1
.
629
.
63
4
2.
449
.
517
11.767.863
Summary of the achievement of budget indicators:
- RON
Achieved –
previous year
202
3
Budget
provisions
Achieved
Total income,
out
of which:
57,879,281
67,416,065
77.369.727
Operational income 53,228,897
64,358,549
73.487.511
Financial income
4,650,384
3,057,516
3.882.216
Total expenditure, out of which:
55,001,954
57,218,065
63.514.880
Operational expenditures 53,825,975
56,900,828
62.682.833
Financial expenditures
1,175,979
317,237
832.047
Gross profit
2,877,32
8
10,198,001
13.854.847
Current and deferred
profit tax
427
,
811
1,369,196
2.086.984
Net profit
2,
449
,
517
8,828,805
11.767.863
ROMPETROL WELL SERVICES S.A.
ANNUAL REPORT OF THE BOARD OF DIRECTORS for the 2023 financial year
Page 21 of 34
c) cash flow: all the changes in the level of cash in the framework of the basic activity, investments
and financial activity, the level of cash at the beginning and at the end of the period.
Treasury cash flow situation, synthesis - indirect method
- RON
202
1
202
2
202
3
Net result before taxation and extraordinary items
1.774.189 2.877.328 13.854.847
Operational profit before changes in working capital
2.987.443 3.350.624 15.707.518
Net cash from operational activities
3.951.124 37.284.325 7.642.050
Net cash from investing activities
27.765.571 9.524.158 (1.554.398)
Net cash from financing activities
(31.640.781) (46.543.997) (5.930.827)
Net variation in cash and cash equivalents
74.975 263.829 157.075
Unrealized exchange rate differences
1.139 657 (251)
Cash and cash equivalents at the beginning of the financial year
151.117 227.231 491.717
Cash and cash equivalents at the end of the financial year
227.231 491.717 648.542
In 2023, both the performance of contracts with customers and suppliers was managed in
conditions of financial balance, as well as the provision of all liquidity for the full and timely
payment of salary rights, budget debts and dividends. All investment projects were financed from
own sources, except for the two twin pump cementing units, that were acquired through a finance
lease. In addition to the cash highlighted at the end of the financial year, the availability from the
main account, from the cash-pooling system, in the amount of 50,730,823 RON, can be used
without restrictions.
Name of the indicator
20
2
1
202
2
202
3
Current liquidity indicator 9,11
3,77
4,85
The speed of rotation of debits
-
customers
1
20
102
86
The speed of rotation of fixed assets
1,
14
1,03
1,48
The indicator of the degree of indebtedness 0.4%
12.1%
8.7%
The debt level indicator includes only the effect of lease contracts.
6. Corporate Governance
ROMPETROL WELL SERVICES S.A. is a company listed on the Bucharest Stock Exchange -
main segment, Standard share category, under the symbol << PTR >>, since 18.06.1998,
according to the decision of the Quota Registration Commission no. 133/26 March 1998.
The company complies with the current legislation applicable to companies and the capital
market: Law no. 31 /1990 of commercial companies - with subsequent amendments, Law no.
82/1991 of accounting - with subsequent amendments, Law no. 297 /2004 on the capital market
- with subsequent amendments, Law no. 24/2017 regarding issuers of financial instruments and
market operations, FSA Regulation no. 5/2018 regarding issuers of financial instruments and
market operations.
ROMPETROL WELL SERVICES S.A.
ANNUAL REPORT OF THE BOARD OF DIRECTORS for the 2023 financial year
Page 22 of 34
The Company's management adopted voluntarily, self-imposed part of the provisions of the
Corporate Governance Code of the Bucharest Stock Exchange (CGC-BVB).
The Corporate Governance Code of the Bucharest Stock Exchange is a set of principles and
recommendations for companies whose shares are admitted to trading on the regulated market
in order to create an internationally attractive capital market in Romania, based on the best
practices, of transparency and trust. The Code encourages companies to build a strong
relationship with their shareholders and other stakeholders, to communicate effectively and
transparently and to be open to all potential investors.
The objective of the Corporate Governance Code of the Bucharest Stock Exchange is to increase
trust in listed companies by promoting improved corporate governance standards in these
companies.
Good corporate governance is a powerful tool for strengthening market competitiveness.
The central elements of this Code are investors' access to information and the protection of
shareholders' rights. Each listed company must follow the provisions of the Code. The role of
good governance is to facilitate effective entrepreneurial leadership, which can ensure the long-
term success of the company.
Details of compliance Rompetrol Well Services S.A. with the new Corporate Governance Code is
presented in Annex no. 1.
In accordance with the Articles of Association, <