Significant increase in first half results thanks to international contribution.
Full-year and medium-term targets revised upward.

In billions of euros

Excellent half-year performance, built on:

Strength of the Group business model and sound infrastructure businesses: all of the Group's businesses contributed to the growth.

Sharp rise in the results of the Exploration-Production business, due to growth in production and hydrocarbon price increases.

Very good performance in trading and sales activities resulting in particular from the Group's supply portfolio optimisation, and growth in natural gas volumes sold in France and Europe. 

The Group has revised its targets upward:

For 2006: EBITDA > 20% growth or over €5 billion

Net income, Group share > €2.2 billion

For 2005-2008: EBITDA + 10% per year on average (compared to the 4 to 7% previously forecasted)

At the publication of the half-year results, Jean-François Cirelli, Gaz de France Chairman & Chief Executive Officer, stated:

“Gaz de France achieved an excellent first half thanks to a dynamic development strategy, sound infrastructure businesses and the quality of the contribution by its employees.  Its performance, to which all businesses contributed, is to be attributed to the tight management of the infrastructure businesses, the sharp growth of Exploration-Production which posted a record-high increase in income during the first half, and the very good performance of our trading and sales activities.

Gaz de France continues to profitably develop its international business which now represents close to  40% of sales.

Gaz de France's progressing economic and financial performance, in 2006, reflects the robustness of the Group and its business model confirms our growth ambitions.

These results have led us to significantly raise our outlook for FY 2006 and over the medium term (2005-2008).

Gaz de France is today a solid Group with a strong brand, valued by its clients and employees, and which is confident in its capacity to successfully continue its development. I am convinced that our merger project with Suez is an excellent opportunity for Gaz de France and all its stakeholders, employees, clients, shareholders, and will allow us to accelerate our growth and development .”

EBITDA Analysis

EBITDA by segment

Energy Supply & Services

Exploration-Production: sharp rise in income due to hydrocarbon prices and increase in production

In the Exploration & Production segment, EBITDA in first half 2006 improved by nearly 91% to 635 million euros, as compared to 333 million euros in first half 2005.  This reflects mainly the increase in hydrocarbon sales prices (+266 million euros) and volumes produced (+48 million euros).

Consolidated production came out at 20.6 Mbep in first half 2006, as compared to 18.4 Mbep in first half 2005.  The Group confirms its target of returning, in 2006, to the consolidated production levels posted in 2004, on a comparable basis.

Development CAPEX (excluding Exploration) amounted to 206 million euros in first half 2006, as compared to 199 million euros in first half 2005.

Purchase-Sale of Energy: sharp increase in EBITDA, despite a limited rise in Public Distribution rates

EBITDA in the Purchase-Sale of Energy segment reached 641 million euros in first half 2006, an increase of 46% over First Half 2005.

This positive development results from our optimisation and arbitrage activities, includint the use of own storage capacity, in an environment impacted by highly-volatile prices, and the growth we achieved in natural gas volumes sold.

Public distribution rates remained stable in the first half and rose by 5.8% as at 1 May 2006. However, the increase in prices did not allow the Group to pass on all of its cost increases (negative impact of 331 million euros in first half 2006).

Gas sales for the Purchase-Sale of Energy segment amounted to 367 TWh in first half 2006, an increase of 4.9% compared to First Half 2005.

Natural gas sales to corporate and residential clients improved by 3.6%, due in particular to colder weather in France in first half 2006.

Sales to the major industrial and commercial clients, declined by 6 TWh, to 54 TWh in France, while improving by 10 TWh to 63 TWh outside France.  That growth came mainly from Italy and Germany.  Lastly,

LNG sales improved sharply over the course of the six months.

In France, electricity sales in the Purchase-Sale of Energy segment reached 2.7 TWh in First Half 2006, as compared to 1.8 TWh in first half 2005.  The number of electricity plants reached approximately 92 000 as at end-June 2006.  In the United Kingdom, electricity sales amounted to
5.9 TWh, receding by nearly 12% compared to the same period in 2005, due to greater selectiveness in our contract policy.

Services: Profitable Growth Continues

EBITDA in the Services segment comes to 96 million euros in first half 2006, rising by 15 million euros compared to first half 2005, an increase of 19%.

This improvement is primarily as a result of the full-year effect of the combined cycle plant's commissioning (DK6).

Infrastructures

Transmission-Storage France: steadily improving results

Gross operating margin comes to 647 million euros in First Half 2006, compared to 643 million euros in first half 2005, up 2.1%.

Excluding the impact of the one-time capital gains recorded in first half 2005 (capital gains from the sale of the buffer gas from Izaute storage to Total, for 11 million euros), the increase would be 3.9%.

Distribution France: positive trends continue

EBITDA in the Distribution France segment stands at 896 million euros in first half 2006, as compared to 875 million euros in first half 2005, an increase of 2.4%.

Transmission Distribution International: business and results are improving, due to external growth and improving margins

EBITDA in the Transmission Distribution International segment was 355 million euros in first half 2006, as compared to 165 million euros in First Half 2005, an increase of 115%.

The trend can be attributed in particular to the consolidation of Distrigaz Sud's operations in Romania with those of SPE in Belgium (+ 78 million euros), and the improvement in operating margins across our businesses.

Other Financial Indicators

As at 30 June 2006, the cost of net financial debt stood at 74 million euros, declining by 49 million euros as compared to 30 June 2005, due mainly to an improvement in cash and cash-equivalent income.

Other income and financial expenses amounted to a charge of 74 million euros as at 30 June 2006, down by 27 million euros as compared to 30 June 2005, due in particular to a drop in reserve accretion charge.

Tax expenses as at 30 June 2006 amounted to 793 million euros, as compared to 586 million euros as at 30 June 2005.  The variation is due mainly to the improvement in income before taxes between the two half-years.  The actual rate is 32.9%, compared to 34.7% in First Half 2005. 

Operating cash flow before taxes and excluding the change in working capital requirements amounted to 3 429 million euros as at 30 June 2006, rising by 34.7%.

Working Capital Requirements declined by 630 million euros in first half 2006, the change reflecting primarily the seasonal effect in the business.

Total investments amounted to 1,338 million euros as at 30 June 2006, comparable to that of first half 2005 (1,354 million euros).  Capital expenditure accounted for 912 million euros, rising by
106 million euros compared to first half 2005.

Net debt for the Group, as at 30 June 2006, following dividend pay-out, amounted to 1,283 million euros, or 8% of equity, compared to 2,993 million euros as at end-2005, a decrease of 1,710 million euros.

Forward-Looking Statement

"The objectives summarised herein are based on data, assumptions and estimates deemed reasonable by Gaz de France.  The said data, assumptions and estimates may evolve or be changed as a result of uncertainties due primarily to the economic, financial, competitive, regulatory or climatic environment.  In addition, the materialisation of certain risks set out in paragraph 4.17 of the Basic Form filed with the French Financial Markets Authority under Number I.05-037, dated 1 April 2005 (hereinafter referred to as the “Basic Form”) could have an impact on the Group's operations and its ability to achieve its objectives.  In addition, the attainment of those objectives is dependent on the success of the sales strategy set out in Paragraph 4.2 of the Basic Form.  Gaz de France thereby does not wish to make any commitments or guarantees on the attainment of the objectives and does not undertake to publish or issue possible corrections or updates of such factors”. 

Important Information

This communication does not constitute an offer to purchase or exchange or the solicitation of an offer to sell or exchange any securities of SUEZ or an offer to sell or exchange or the solicitation of an offer to buy or exchange any securities of Gaz de France, nor shall there be any sale or exchange of securities in any jurisdiction (including the United States, Germany, Italy and Japan) in which such offer, solicitation or sale or exchange would be unlawful prior to the registration or qualification under the laws of such jurisdiction. The distribution of this communication may, in some countries, be restricted by law or regulation. Accordingly, persons who come into

possession of this document should inform themselves of and observe these restrictions. To the fullest extent permitted by applicable law, Gaz de France and SUEZ disclaim any responsibility or liability for the violation of such restrictions by any person.

The Gaz de France ordinary shares to be issued in connection with the proposed business combination to holders of SUEZ ordinary shares (including SUEZ ordinary shares represented by SUEZ American Depositary Shares) may not be offered or sold in the United States except pursuant to an effective registration statement under the United States Securities Act of 1933, as amended, or pursuant to a valid exemption from registration.

In connection with the proposed business combination, the required information document will be filed with the Autorité des marchés financiers (“AMF”) and, to the extent Gaz de France is required or otherwise decides to register the Gaz de France ordinary shares to be issued in connection with the business combination in the United States, Gaz de France may file with the United States Securities and Exchange Commission (“SEC”), a registration statement on Form F-4, which will include a prospectus. Investors are strongly advised to read the information document filed with the AMF, the registration statement and the prospectus, if and when available, and any other relevant documents filed with the SEC and/or the AMF, as well as any amendments and supplements to those documents, because they will contain important information. If and when filed, investors may obtain free copies of the registration statement, the prospectus as well as other relevant documents filed with the SEC, at the SEC's website at www.sec.gov and will receive information at an appropriate time on how to obtain these transaction-related documents for free from Gaz de France or its duly designated agent. Investors and holders of SUEZ securities may obtain free copies of documents filed with the AMF at the AMF's website at www.amf-france.org or directly from Gaz de France on its website at: www.gazdefrance.com or directly from SUEZ on its website at: www.suez.com, as the case may be.

Press Contact:

Jérôme Chambin - Tel: +33 1 47 54 24 35

E-mail : jerome.chambin@gazdefrance.com

Investor Relations Contact:

Brigitte Roeser Herlin – Tel: +33 1 47 54 79 04

E-mail : GDF-IR-TEAM@gazdefrance.com

Group Profile

Gaz de France Group is a major energy player in Europe.  As the leading natural gas distributor in Europe, Gaz de France employs over 53 000 employees and earned 22.4 billion euros in sales in 2005 and 1.7 billion euros in Net Income Group share.  The Group holds a portfolio of 13.8 million clients, 11.1 million of which are in France.  Listed on the Paris Stock Exchange in July 2005, Gaz de France entered the CAC 40 and Dow Jones Stoxx 600 as early as September 2005.

Appendices

Consolidated Income Statement

Consolidated Cash Flow Statement

Sales by Segment

EBITDA by Segment

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