POLSKIE GÓRNICTWO NAFTOWE I GAZOWNICTWO SA (2/2018) Information on the result of tests for impairment of a part of PGNiG SA's assets

The Management Board of Polskie Górnictwo Naftowe i Gazownictwo SA ("PGNiG") informs that the effect of write-downs created as a result of tests for impairment of assets at PGNiG S.A. and writing down expenses for the period's expense will reduce PGNiG SA's operating result. and consolidated operating results of the PGNiG Group in the fourth quarter of 2017 by approximately PLN 776 million. The above amount includes: i) impairment of property, plant and equipment related to hydrocarbon production at PGNiG SA - PLN 87 million (Search segment i) (ii) write-down of fixed assets under construction for the exploration and evaluation of mineral resources - PLN 89 million (Exploration and Production segment), iii) the costs of the period of outlays for seismics and drilling, which are qualified as negative - PLN 246 million (Exploration and Production segment), iv) write-down of fixed assets related to electricity generation in the power unit in Wierzchowice - PLN 364 million (Trade and Storage segment), v ) dissolution of the value of fixed assets related to other activities + PLN 10 million (segment Other business). Impairment write-downs are the result of a cyclical evaluation of the value of recovery of assets, where: - Write-downs on assets in the Exploration and Production Segment result from the analysis of future cash flows. The key impact on the write-downs were: assessment of prospects for exploration projects, changes in projected production volumes, assumed costs of hydrocarbon extraction and current product price paths. - Write-offs on fixed assets in the Trade and Storage segment result from a change in the business model power block in Wierzchowice, which began to work to a greater extent for commercial needs than to meet the needs of its own underground gas warehouse, ie a similar mode of operation for the peak power plant. In the conducted analysis of the power block, the company did not take into account potential financial effects related to the regulations on the power market introduced. The value presented above is an estimate, has not yet been audited by an auditor and may change. Analysis of the remaining assets of the Company and its subsidiaries is still ongoing. The final test result and the value of the write-downwill be presented in the consolidated financial statements for 2017

Source: company website, investor relations, current and periodic reports.

Company information
Company name:Polskie Górnictwo Naftowe i Gazownictwo SA
Adress: ul. Marcina Kasprzaka 25 01-224 Warszawa
Phone:+48 22 5894555

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