Acquisition

5 Oct 2006 07:00

Urals Energy Public Company Limited05 October 2006 Urals Energy Public Company Limited Completion of Acquisition of Three Companies from Lukoil Summary: • Completion of a bolt-on acquisition from LUKoil • Principal licence, acquired for US$1.5 million in cash, is credited with approximately 25 million barrels of C1-C2 reserves and is currently in production • DeGolyer and MacNaughton to re-evaluate reserves and company to institute production enhancement programme • Eighth acquisition Urals Energy ("Urals" or the "Company") (LSE:UEN), a leading independentexploration and production company with operations in Russia and currentproduction of 10,100 bopd, announces the completion of its third principalacquisition since its IPO of three assets, OOO Voivozhneft, OOO NizhneomrynskayaNeft and OOO Verkhneomrynshaya Neft, from LUKoil, all located in the KomiRepublic, west of the Urals mountains. The primary producing asset, OOO Nizhnyomrynskaya Neft, is a Russian limitedliability company, acquired for US$1.5 million in cash and is located close tothe Company's existing producing properties in the region. OOO Nizhnyomrynskaya Neft owns a subsoil licence which has been in productionfor over 20 years. According to the Russian State reserves body, the licence ofthis asset is credited with approximately 25 million barrels of C1-C2 reserves.The licence is currently producing approximately 350 bopd. Reserves andproduction of OOO Voivozhneft and OOO Verkhneomrynskaya Neft are notsignificant. As planned, the Company will now initiate a basic program of workovers toreplace pumps and re-start production from several older wells, as well asemploy DeGolyer and MacNaughton to re-evaluate the reserves. Based on theCompany's experience, the re-evaluation of the reserves normally results in alower quantity of reportable recoverable reserves than is recorded by theRussian State reserves body. William R. Thomas, Chief Executive Officer, commented: "This is another example of our ability to make strategic acquisitions atattractive prices and we continue to make progress in our quest to build UralsEnergy into a major independent player in Russia and the CIS. Our strategy ofacquiring producing and non-producing assets near existing fields withdevelopment and exploration potential will enable the company to continue thefast track growth achieved to date." 5 October 2006 EnquiriesPelham PRJames Henderson 020 7743 6673Gavin Davis 020 7743 6677 This information is provided by RNS The company news service from the London Stock Exchange