Completion of Placement

26 May 2006 15:15

Urals Energy Public Company Limited26 May 2006 URALS ENERGY PUBLIC COMPANY LIMITED NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO THE UNITED STATES,CANADA, AUSTRALIA, JAPAN, CYPRUS OR RUSSIA COMPLETION OF $190 MILLION PRIVATE PLACEMENT Further to the announcement made on 16 May 2006, Urals Energy Public CompanyLimited ("Urals Energy" or the "Company") (LSE: UEN), a leading independentexploration and production company with operations in Russia, is pleased toannounce the successful private placement of a total of 28,262,706 new shares ata price of 360 pence per share (the "Placing Shares"), raising $190 million. The proceeds of the placement will be used to fund the balance of theconsideration for the pending acquisition of OOO Dulisma and OOO LenskayaTransportnaya Kompanaiya ("Dulisma"), which is due to complete in June 2006; todischarge the Company's obligations to Morgan Stanley & Co. InternationalLimited, associated with the financing of the initial $50 million payment forDulisma; and for funding the Company's capital expenditure program and otherworking capital needs. The Placing Shares will be issued credited as full paid and will rank pari passuin all respects with the Company's existing shares, including the right toreceive all dividends and other distributions declared, made or paid after thedate of issue. The placement of shares is conditional upon, inter alia, admission of thePlacing Shares to trading on the Alternative Investment Market of the LondonStock Exchange ("Admission") and upon an increase of the Company's authorizedshare capital to CY£ 625,000 and authorization to disapply pre-emption rights inrelation to 57,000,000 shares at the Annual General Meeting of the Company to beheld on 1 June 2006. It is expected that Admission will become effective andthat dealings in the Placing Shares will commence on 2 June 2006. William R. Thomas, Chief Executive Officer, commented: "Our ability to achieve an oversubscribed placement in very difficult marketconditions is a clear recognition by the market of the Group's superiorperformance since our IPO and the transformational nature of the Dulismaacquisition. The continuing support of our core institutional shareholders andthe addition of new investors in the placement confirms our strategy of growththrough acquisition and the drillbit. The proceeds of the fundraising willallow us to exploit fully the significant potential of the Dulisma field, whichwill be a key driver of growth for the group going forward." Morgan Stanley acted as lead manager in connection with the private placement. 26 May 2006 Pelham PRJames Henderson/ Gavin Davis - +44 (0) 20 7743 6673 This announcement has been issued by and is the sole responsibility of UralsEnergy Public Company Limited. This announcement is for information purposes only and does not constitute anoffer or invitation to acquire or dispose of any securities or investment advicein any jurisdiction. This announcement does not constitute an offer to sell orissue or the solicitation of an offer to buy or acquire any securities in thecapital of Urals Energy Public Company Limited in the United States or in anyjurisdiction in which such an offer or solicitation is unlawful and should notbe relied upon in connection with any decision to acquire the Placing Shares orany other securities in the capital of Urals Energy Public Company Limited.Morgan Stanley Securities Limited ("Morgan Stanley"), which is authorized andregulated by the Financial Services Authority, is acting exclusively for UralsEnergy Public Company Limited in connection with the private placement andno-one else and will not be responsible to anyone other than Urals Energy PublicCompany Limited for providing advice in relation to the private placement or anyother matter referred to in this announcement. The Placing Shares have not been and will not be registered under the U.S.Securities Act of 1933 as amended (the "Securities Act") and, subject to certainexceptions, may not be offered or sold in the United States (as such term isdefined in Regulation S under the Securities Act). Accordingly, the PlacingShares are being offered and sold only in "offshore transactions" as defined andin accordance with Regulation S under the Securities Act. Notes: 1. Steve Buscher, the Company's Chief Financial Officer, has indirectly subscribed for 89,000 new shares pursuant to the placement. 2. In accordance with AIM reporting requirements, Urals Energy announces the proforma profit impact of the acquisition of Dulisma on its financial results for the year ended 31 December 2005. The results highlights for Urals Energy announced on 18 April 2006 were asfollows: • Gross revenues increased to $92.9 million (2004: $8.2 million)• Adjusted EBITDA of $16.9 million• Operating profit of $11.3 million (2004: loss of $3.7 million)• Post tax profit of $7.1 million (2004: loss of $3.6 million) Based on IFRS accounting standards the pro-forma impact of the Dulismaacquisition on the 2005 year end results would be: • Increase in gross revenues of $2,749,000• Decrease in EBITDA of -$1,430,000 3. In connection with the private placement, Morgan Stanley, as stabilising manager, or any of its agents, may (but will be under no obligation to), to the extent permitted by applicable law, over-allot and effect other transactions with a view to supporting the market price of the shares of the Company at a level higher than that which might otherwise prevail in the open market. Morgan Stanley is not required to enter into such transactions and such transactions may be effected on any stock market, over-the-counter market or otherwise. Such stabilising measures, if commenced, may be discontinued at any time. Save as required by law or regulation, neither Morgan Stanley nor any of its agents intends to disclose the extent of any over-allotments and/or stabilisation transactions under the private placement. In connection with the private placement, Morgan Stanley, as stabilisingmanager, has entered into over-allotment arrangements with the Company, pursuantto which Morgan Stanley, or any of its agents, may subscribe, or procuresubscribers for, additional shares of the Company up to a maximum of 10 percent. of the total number of shares comprised in the private placement at theplacing price. The over-allotment arrangements are exercisable in whole or inpart, upon notice by Morgan Stanley, at any time during the period commencing onthe date of announcement of the placing price and ending on the 30th day afterthe date of allotment of the shares comprised in the Placement. Any shares madeavailable pursuant to the over-allotment arrangements will rank pari passu withall other ordinary shares of the Company and will form a single class for allpurposes with the other ordinary shares. This information is provided by RNS The company news service from the London Stock Exchange