Gaz de France: First Quarter 2008: Sales Figures Increased by 15 %

During the first quarter of 2008, Gaz de France Group (Paris:GAZ) achieved sales of EUR 10,376 million, an increase of 15 % compared to the first quarter of 2007.

The climate context was markedly less unfavourable than during the 1st quarter 2007. Under average climate conditions, the sales rose by 10 %. Similarly, market conditions have been buoyant. The regulated tariffs for public distribution of natural gas in France increased by on average EUR 0,173 c/kWh as of 1st January 2008.

Internationally, Group sales reached EUR 3,966 million, up by 19% compared to the first quarter 2007. This represents 38% of Gaz de France's sales against 37% for the same period in 2007.

In the first quarter, Gaz de France continued its development with most notably the acquisition of the Europe's largest combined-cycle gas turbine plant in Teesside, Great Britain, which it carried out jointly with Suez.

Gaz de France confirms its financial objective(1) for 2008, namely an EBITDA of EUR 6.1 billion, in line with the objective set for the period 2005-2008 of an average annual increase of 10%. This objective assumes that the sales tariffs for natural gas in France fully reflect the corresponding supply costs. It is also on the understanding of an average climate for 2008 and excludes any significant change in oil products prices.
Quarterly sales per segment

Million euros Q1 2008 Q1 2007
restated(2) Change %
Energy supply & Services
Exploration - Production 622 407 + 53 %
Energy Purchase & Sales 7,972 6,949 + 15 %
Services 530 530 + 0 %
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Infrastructures
Transmission & Storage 632 576 + 9.7 %
Distribution France 1,047 1,006 + 4.1 %
Transmission Distribution International 1,799 1,657 + 8.6 %
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Others & unallocated -2,226 - 2,072
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GROUP TOTAL 10,376 9,053 + 15 %
Under average climate conditions + 10 %
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Analysis of the sales figures at end March 2008

Energy supply & Services

-- Exploration-Production: substantial increase in sales owing to increased production and a favourable pricing environment

Sales for the Exploration-Production segment rose to EUR 622 million against EUR 407 million for the same period in 2007, an increase of 53% (45% on a like-for-like basis(3)).

This development arises from increased production of hydrocarbons begun at the end of 2007 with the commissioning of new fields in Norway (mainly Snovhit), in the United Kingdom and the Netherlands.

Accordingly, the total production of hydrocarbons is up by 26% (24% on a like-for-like basis) to 13.2 Mboe over the first quarter 2008 against 10.5 Mboe (including Efog(2)) over the same period in 2007.

This change also benefits from a favourable pricing environment in business activity:
-- the average price of Brent in EUR /bl is up by 46% compared
to the first quarter of 2007;

-- the average price of natural gas in EUR /MWh on the NBP
(United Kingdom) has doubled over the same period.

In terms of exploration, 5 new wells have been drilled during the first quarter of 2008, 3 of which have been successful.

As announced, Group consolidated production for 2008 should be close to 50 Mboe.

-- Energy Purchase & Sales: an increase of 15% in sales to EUR 7,972 million

The business activity of the Energy Purchase & Sales segment was in line, over the first quarter 2008, with an environment characterised by:
-- less unfavourable climate conditions than in the first
quarter of 2007 (-6.6 TWh in the 1st quarter 2008 against
-14 TWh in the 1st quarter 2007);

-- the EUR 0,173 c/kWh average increase in the regulated sales
tariffs to natural gas as off 1st January 2008;

-- market conditions enabling profit to be drawn from the
supply portfolio.

Sales for the Energy Purchase & Sales segment are EUR 7,972 million against EUR 6,949 million, up by 15% (10% under average climate conditions).

-- Natural gas sales

The sales of gas from the Energy Purchase & Sales segment stand at 224 TWh, an increase of 16 TWh compared to the 1st quarter 2007. They are up by 9 TWh under average climate conditions.

Sales to individual customers in France represented 58 TWh against 52 TWh in the first quarter of 2007. They are stable under average climate conditions and excluding the impact of the leap-year.

Since 1st July 2007, 257,000 customers have subscribed to the gas market offers of the Group with an acceleration during the 1st quarter 2008 when 180,000 new contracts were signed.

Sales to business customers and major accounts in France reached 95 TWh at the end of March 2008, an increase of 2 TWh compared to the 1st quarter 2007. Excluding climate effect, these sales are down by 1 TWh compared to 2007 mainly on business customers.

This decrease is more than compensated for by the pursuit of commercial development outside France. In Europe, sales are up by 4 TWh to 37 TWh(4).

Short-term sales and other sales (including LNG) increased by 5 TWh to reach 35 TWh.

-- Electricity sales

Sales of electricity for the segment reached 5.8 TWh over the 1st quarter 2008, up by 1.4 TWh compared to 2007.

Since 1st July 2007, the Group has won over around 150,000 new individual electricity customers with more than 100,000 new contracts signed during the 1st quarter 2008.

The development of the Group during the 1st quarter 2008 in terms of electricity production continued with:
-- the acquisition of the Teesside power station in Great
Britain (total installed capacity of 1,875 MW)

-- the acquisition of the wind farm company Nass & Wind
Technologie with 34 MW of installed capacity and a
portfolio of projects of 1,500 MW.

-- Services: sales up by 6% on a like-for-like basis

Sales in the Services segment rose to EUR 530 million at the end of March 2008, stable compared to the 1st quarter 2007.

On a like-for-like basis, segment sales are up by 6%. This evolution can be explained by the dynamism of the business activity in France, the United Kingdom and the Benelux countries.

At the end of the 1st quarter 2008, Gaz de France entered into exclusive negotiations with the Italian company A2A for the disposal of the Cofathec Coriance group.

Infrastructures

-- Transmission-Storage: 9.7% increase in revenue

The turnover of the Transmission-Storage segment is EUR 632 million for the 1st quarter of 2008 versus EUR 576 million for the same period in 2007, representing an increase of 9.7%. This increase results from the increase in subscriptions, the evolution of storage prices and the success of storage capacity auction sales.

Sales have continued to develop for these activities with the following:
-- the sale of transport capacities for the link between the
North and South of France, effective from the beginning of
2009, which will contribute to the reduction in the number
of balancing zones;

-- the integrated sale of transport capacities between the
Southern GRTgaz zone and the TIGF zone, for the period
beginning the 1st April 2009;

-- storage capacity auction for a total of 7 TWh versus 5.7
TWh in 2007 (including capacities which can be returned);

-- update on the third party storage access offer with a price
increase of 2.8% as of 1st April 2008.

Finally, following an accident in February 2008 at the worksite of the Fos Cavaou terminal, the operational start-up of the new terminal is expected in the first half of 2009.

-- Distribution: an activity level which is affected by the return to better climatic conditions

The turnover of the Distribution France segment amounts to EUR 1,047 million for the first quarter of 2008 versus EUR 1,006 million for the same period in 2007. This 4.1% increase is essentially a result of the return to better climatic conditions.

There is a growth in the volume of gas shipping of 8.7 TWh, 7.5 TWh of which is due to the climate, the rest is mainly associated with the fact that it is a leap year.

In the first quarter, the French Energy Regulatory Commission (Commission de Régulation de l'Energie, or CRE) proposed a new distribution tariff (ATRD 3). This new tariff should be in force from the 1st July 2008.

CRE proposal includes a tariff increase of +5.6% on the 1st July 2008, as well as a mechanism for taking volume risks and energy prices into account, productivity and service quality incentives. Regulated asset base remuneration rate should decrease from 7.25% to 6.75% (pre-tax real rate). This new tariff will be valid over a 4-year period.

-- Transmission Distribution International: continuing the increase in sales

The turnover of the Transmission Distribution International segment is at EUR 1,799 million for the first quarter of 2008, which is an increase of 8.6% in relation to the same period in 2007 (EUR 1,657 million).

This evolution is affected by the depreciation of the pound sterling, as well as changes in accounting methods: global integration of commercialisation activities in Italy since the 1st October 2007 (equity method for the 1st quarter 2007) and in the opposite, equity method for Gasag as of 1st quarter 2008 and for SPE, since end 2007 (proportional integration in the past).

Outside of these two effects, there is a 7.8% increase in turnover due to the following:
-- the increase in the price of gas on the British market;

-- price increases over the period, notably in Romania and
Hungary;

-- a colder climate than in the first quarter of 2007 (-2
TWh in the 1st quarter 2008 versus -4 TWh in the 1st
quarter 2007).
Financial Calendar

Shareholders meeting: 19th May 2008
Dividend payout: 27th May 2008
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Group profile:

The Gaz de France group is a major Energy player in Europe. European leader in the distribution of natural gas, Gaz de France employs almost 50,000 collaborators and in 2007, reached a turnover of 27 billion Euros. The Group has a portfolio of around 14 million clients, approximately 11 million of which are in France. Listed on the Paris Stock Exchange, Gaz de France is part of the CAC 40 and the Dow Jones Stoxx 600 indices.

The objectives given above are based upon data, hypotheses and estimates which are deemed reasonable by Gaz de France. This data, hypotheses and estimates may evolve or be modified because of uncertainties due primarily to the economic, financial, competitive, regulatory and climatic environment. Furthermore, the occurrence of certain risks described in chapter 4 of the reference document filed by the French Financial Markets Authority under the number R.07-046, dated first April 2007 (hereinafter referred to as the "Reference Document") could have an impact on the Group's activities and its capacity to achieve its objectives. Moreover, the attainment of objectives depends upon the success of the strategy presented in paragraph 6.1.2 of the Reference Document. Therefore, Gaz de France does not commit to or guarantee the attainment of objectives and does not undertake to publish or issue possible corrections or updates of such elements, with the exception of what is required by relevant law and regulations.

(1) This objective shall not be assimilated as a prevision due to the pending merger project with Suez which should be completed at the end of 1st half 2008. Group's scope will indeed be considerably modified in comparison with the prevailing one at the time of the objectives' definition for 2005-2008.

(2) Reclassifications between segments due to the implementation of the new organisation, see Appendix 1

(3) Sales for the 1st quarter 2008 integrate production from the Efog (which has been the subject of proportional integration since 1st February 2007), from Enerci (non-consolidated at the time of publication of the sales figures for the 1st quarter 2007) and from Alam El Shawish (acquired end of 2007).

(4) After reclassification in the International Transmission Distribution segment of GDF ESS, sales for Europe in the 1st quarter 2007 reached 33 TWh (35 TWh published).

Appendix 1

As part of the continuation of reclassification in the Group's new organisation, impacts (non significant) on the turnover in 2007 four quarters are summarised below.
Impacts on the 2007 first quarter


Q1 2007 Effects of already Effects of new
Million Euros Published published reclassification
reclassification
----------------------------------------------------------------------
Energy supply & Services
Exploration - Production 407 0 -
Energy Purchase & Sales 6,928 + 29 - 8
Services 610 - 80 -
----------------------------------------------------------------------
Infrastructures
Transmission Storage 537 + 31 + 8
Distribution France 1,005 + 1 -
Transmission
Distribution
International 1,140 + 517 -
----------------------------------------------------------------------
Eliminations & others - 1,574 - 498 -
GROUP TOTAL 9,053
----------------------------------------------------------------------


Million Euros Q1 2007 Q1 2008 Change %
Restated
----------------------------------------------------------------------
Energy supply & Services
Exploration - Production 407 622 + 53 %
Energy Purchase & Sales 6,949 7,972 + 15 %
Services 530 530 + 0 %
----------------------------------------------------------------------
Infrastructures
Transmission Storage 576 632 + 9,7 %
Distribution France 1,006 1,047 + 4,1 %
Transmission Distribution International 1,657 1,799 + 8,6 %
----------------------------------------------------------------------
Eliminations & others - 2,072 - 2,226
GROUP TOTAL 9,053 10,376 + 15 %
----------------------------------------------------------------------
Impacts on other 2007 quarters


Q2 New Q2 2007
Million Euros 2007 Reclassi- Re-
fication processed
----------------------------------------------------------------------
Energy supply & Services
Exploration - Production 377 377
Energy Purchase & Sales 3,302 - 3 3,299
Services 378 378
----------------------------------------------------------------------
Infrastructures
Transmission Storage 610 + 3 613
Distribution France 536 536
Transmission Distribution International 914 914
----------------------------------------------------------------------
Eliminations & others -1,392 -1,392
----------------------------------------------------------------------
GROUP TOTAL 4,725 4,725
----------------------------------------------------------------------


Q3 New Q3 2007
Million Euros 2007 Reclassi- Restated
fication
----------------------------------------------------------------------
Energy supply & Services
Exploration - Production 388 388
Energy Purchase & Sales 2,892 - 3 2,889
Services 368 368
----------------------------------------------------------------------
Infrastructures
Transmission Storage 622 + 3 625
Distribution France 462 462
Transmission Distribution International 901 901
----------------------------------------------------------------------
Eliminations & others -1,281 -1,281
----------------------------------------------------------------------
GROUP TOTAL 4,352 4,352
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Q4 New Q4 2007
Million Euros 2007 Reclassi- Re-
fication processed
----------------------------------------------------------------------
Energy supply & Services
Exploration - Production 545 545
Energy Purchase & Sales 6,890 - 9 6,881
Services 531 531
----------------------------------------------------------------------
Infrastructures
Transmission Storage 693 + 9 702
Distribution France 1,073 1,073
Transmission Distribution International 1,730 1,730
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Eliminations & others -2,165 -2,165
----------------------------------------------------------------------
GROUP TOTAL 9,297 9,297
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