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Acquisition

19 May 2006 07:00

Urals Energy Public Company Limited19 May 2006 Antimonopoly Approval of the Dulisma Acquisition Purchase of Oil & Gas Assets in Komi Republic from Lukoil Urals Energy ("Urals Energy"or the "Group" or the "Company"), a leadingindependent exploration and production company with operations in Russia whichwas admitted to trading on AIM in August 2005, announces: • Receipt of the approval by the Russian Federal Antimonopoly Service for thepreviously announced acquisition of OOO Dulisma ("Dulisma") and OOO LenskayaTransportnaya Kompanaya ("LTK"), and • The acquisition of oil assets located in the Komi Republic from affiliates ofOAO Lukoil with Russian State reserves of 25 million barrels of oil for $1.5million in cash FAS approval of the Dulisma and LTK Acquisitions Urals Energy announces that is has received formal approval from the RussianFederal Antimonopoly Service for the acquisitions of Dulisma and LTK, which wereannounced on 18 April 2006. This approval is an important step towards thecompletion of these transactions. Acquisition of oil and gas assets in the Komi Republic from OAO Lukoil Urals Energy also announces that it has acquired the rights to purchase OOO "Voivozhneft", OOO "Nizhnyomrynskaya Neft" and OOO "Verkhneomrynskaya Neft", eacha Russian limited liability company, from OOO Lukoil-Komi and OAO Komineft,subsidiaries of OAO Lukoil. The acquisition is for $1.5 million in cash pluscertain working capital adjustments and is expected to be completed in June2006. The closing is subject to approval by the Russian Federal AntimonopolyService and other customary conditions. Each of the companies to be acquired owns subsoil licences located near theCompany's existing producing properties in the Komi Republic. The licences tobe acquired have been in production for over 20 years. According to the RussianState reserves body, the main Licence being acquired is credited withapproximately 25 million barrels of C1-C2 reserves. The licence is currentlyproducing approximately 350 bopd. On completion of the acquisition, UralsEnergy intends to re-evaluate the reserves, identify areas for furtherdevelopment and prepare and institute a rehabilitation and productionenhancement program. Based on the Company's experience, the re-evaluation ofthe reserves by the Group's outside reserve evaluation firm, DeGolyer andMacNaughton, normally results in a lower quantity of reportable recoverablereserves than is recorded by the Russian State reserves body. The Group intends to pay for the acquisition out of its existing cash reserves. The acquisition fits Urals Energy's acquisition criteria of acquiring producingand non-producing assets in complementary areas of Russia and the CIS withdevelopment and exploration potential at attractive prices. William R. Thomas, Chief Executive Officer, commented: "The approval of our Dulisma and LTK acquisitions by the Russian authorities isa welcome step in integrating these important assets into our portfolio. Theadded benefit of the acquisition of the additional assets from Lukoil is asignificant low cost bolt-on for the Group, giving us assets near to ourexisting producing properties in Komi. This also evidences our ability to workwith Lukoil, one of the major oil companies in Russia, on its portfoliorationalisation program. We are confident this acquisition will also contributeto our continued growth." Background to Urals Energy Urals Energy is an independent exploration and production (E&P) company with itsprincipal assets and operations in Sakhalin Island, Timan Pechora (includingareas in the Nenets Autonomous Okrug and Komi Republic) and the Republic ofUdmurtia, Russia. The Company was admitted to trading on AIM in August 2005. The Group is focused on the integration of its five recently acquiredsubsidiaries and the exploitation of their assets. In addition, it is activelyseeking to continue to grow and diversify its reserve and production portfoliothrough exploration activities and the acquisition of additional E&P companiesor assets by taking advantage of the ongoing rationalisation of E&P assets inRussia. The Group's six existing E&P subsidiaries have Proved and Probable reserves of116 million barrels of oil equivalent (MMBOE) and produced approximately 6,237barrels of oil per day (BOPD) during the second six months of 2005. The Group's two largest subsidiaries by production, Petrosakh and Arcticneft,own and operate refining assets with a total refining capacity of 5,300 BOPD,which provide the Group with the ability to maximise the value of the oilproduced by choosing between the sale of oil or of refined products depending onmarket conditions, tax considerations and other factors. According to a preliminary 12 April 2006 estimate by the Company's independentengineering consultants, DeGolyer and MacNaughton ("D&M"), the recentlyannounced acquisition of the Dulisma Field will increase Urals Energy reservesby approximately 109 million barrels of proved and probable oil reserves,approximately 87 million barrels of possible oil and condensate reserves and 1.9trillion cubic feet of possible gas reserves as at 31 March 2006, according to areport from DeGolyer and MacNaughton, the Company's engineering consultants. 19 May 2006 Pelham PRJames Henderson 020 7743 6673Gavin Davis 020 7743 6677 This information is provided by RNS The company news service from the London Stock Exchange
Date   Source Headline
5th Dec 20078:36 amRNSStabilisation Notice
5th Dec 20077:01 amRNSPricing of Private Placement
28th Nov 20077:01 amRNSMajor Acquisition
15th Nov 20077:02 amRNSSberbank Financing Agreement
3rd Oct 20079:04 amRNSTransneft tie-in approval
28th Sep 200710:13 amRNSInterim Results - Replacement
28th Sep 20077:06 amRNSInterim Results
24th Sep 20071:11 pmRNSRe: Ministry Statement
20th Aug 20077:02 amRNSAIM Rule 26
15th Aug 20077:01 amRNSOperational Update
31st Jul 20073:00 pmRNSHoldings in Company
9th Jul 20079:49 amRNSResult of AGM
5th Jul 20076:00 pmRNSDirectorate Change
15th Jun 20071:56 pmRNSGazprom Agreement
15th Jun 20077:00 amRNSAnnual Report and Accounts
15th May 20071:24 pmRNSResponse to Media Speculation
8th May 200712:55 pmRNSHoldings in Company
1st May 20077:03 amRNSDirector Shareholding
30th Apr 20077:23 amRNSDirectors Information
30th Apr 20077:04 amRNSPreliminary Results
26th Apr 20075:39 pmRNSNotice of Results
21st Mar 20077:02 amRNSNotice of Results
12th Mar 20077:02 amRNSCompletion of Financing
12th Feb 20077:02 amRNSOperational Update
9th Feb 20074:07 pmRNSDirector/PDMR Shareholding
9th Feb 20071:53 pmRNSAdditional Listing
26th Jan 200710:26 amRNSAward of Restricted Stock
24th Jan 200710:09 amRNSDirector/PDMR Shareholding
23rd Jan 20077:01 amRNSFinancing Announcement
23rd Jan 20077:01 amRNSOperational Update
18th Dec 20067:01 amRNSAdjustment to Interim Results
14th Nov 20067:04 amRNSDulisma EPSO Pipeline Access
5th Oct 20067:00 amRNSAcquisition
3rd Oct 20066:10 pmRNSDirector/PDMR Shareholding
27th Sep 20067:03 amRNSBoard Changes
6th Sep 20067:02 amRNSInterim Results
20th Jun 20067:30 amRNSAnnual Report and Accounts
12th Jun 20067:02 amRNSCompletion of Acquisition
6th Jun 20069:54 amRNSHolding(s) in Company
2nd Jun 20068:50 amRNSAGM Statement
30th May 20064:40 pmRNSHolding(s) in Company
30th May 20064:39 pmRNSFurther Placing Information
26th May 20063:31 pmRNSStabilisation Notice - Urals
26th May 20063:15 pmRNSCompletion of Placement
19th May 20067:00 amRNSAcquisition
16th May 20064:41 pmRNSOperational Update
8th May 20067:01 amRNSNotice of AGM
4th May 20066:03 pmRNSIndependent Project Report
24th Apr 200612:16 pmRNSD&M Independent Report
18th Apr 20067:02 amRNSPreliminary Results

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