1 Mar 2011 08:00
1 March 2011
VOLGA GAS PLC
Update re: Trans Nafta legal process
Volga Gas Plc ("Volga Gas" or the "Company"), the oil and gas exploration and production group operating in the Volga Region of European Russia, is pleased to announce that, at a hearing in the Moscow Court of Cassation, the original judgment awarded by the Moscow Arbitration Court on 23 August 2010 in connection with the legal action brought by Volga Gas' wholly-owned subsidiary, OOO Gaznefteservice ("GNS") against OOO Gazneftedobycha ("GND"), a subsidiary of ZAO Trans Nafta, has been upheld.
The legal proceedings were undertaken by GNS against GND in May 2010 to recover from GND a sum of RUR 600 million (approximately US$ 20 million) plus interest accrued since November 2008.
On 24 August 2010, Volga Gas announced that the Moscow Arbitration Court had ordered GND to pay RUR 640 million (approximately US$ 22 million) to Volga Gas. The sum of RUR 600 million, which Volga Gas is seeking to recover, was originally paid by GNS to GND as a prepayment for the acquisition of a 75% interest in a gas processing unit which was intended to process gas and condensate from GNS's Vostochny Makarovskoye field. This judgement was revised in the Court of Appellation on 22 November 2010 and today's hearing in the Court of Cassation upheld the original judgement given in August 2010.
Mikhail Ivanov, Chief Executive of Volga Gas commented:
"I am pleased to be able to update our shareholders with this positive result. Based on the facts presented to the court, we have won the third stage of the legal dispute and the court's decision is immediately enforceable.
"We are currently working towards final resolution of the legal, financial and commercial differences between Trans Nafta and Volga Gas to enable the Vostochny Makarovskoye gas-condensate field to commence production in the near future."
For additional information please contact:
Volga Gas plc | |
Mikhail Ivanov, Chief Executive Officer | +7 (495) 721 1233 |
Tony Alves, Chief Financial Officer | +44 (0) 20 8622 4451 |
Oriel Securities | |
Michael Shaw Gareth Price | +44 (0)20 7710 7600 |
Financial Dynamics | |
Billy Clegg | +44 (0)20 7831 3113 |
Ed Westropp | |
Alex Beagley |
Editors' notes:
Volga Gas is an independent oil and gas exploration and production company operating in the Volga region of European Russia. The company has 100% interests in its four licence areas.
The information contained in this announcement has been reviewed and verified by Mr. Mikhail Ivanov, Director and Chief Executive Officer of Volga Gas plc, for the purposes of the Guidance Note for Mining, Oil and Gas companies issued by the London Stock Exchange in March 2006. Mr. Mikhail Ivanov holds a M.S. Degree in Geophysics from Novosibirsk State University. He also has an MBA degree from Kellogg School of Management (Northwestern University). He is a member of the Society of Petroleum Engineers.
Ends