Independent Project Report

4 May 2006 18:03

Urals Energy Public Company Limited04 May 2006 For Immediate Release Urals Energy Public Company Limited Announcement of Independent Project Report for Dulisminskoye Oil, Condensate and Gas Field As previously announced on 18 April 2006, Urals Energy Public Company Limited ("Urals Energy" or "the Group") has signed a definitive Sales and PurchaseAgreement for the $148 million acquisition of the Dulisminskoye field togetherwith the LTK transportation and treating facilities, all located in the Irkutskregion of Eastern Siberia. The acquisition is expected to close in June 2006. Urals Energy announces today that the report for the recently acquiredDulisminskoye oil, condensate and gas field prepared by DeGolyer and MacNaughton("D&M"), the Group's independent reservoir engineers, is now available todownload via the Group's website: www.uralsenergy.com. The conclusions of the comprehensive report are consistent with D&M'spreliminary estimates as released by the Group at the time of the announcement:net 2P (proved plus probable) reserve additions of 109.4 million barrels of oiland condensate and net 3P (proved, probable and possible) reserve additions of196.3 million barrels of oil and condensate and 1.7 trillion cubic feet of gas.Oil production is projected to peak in 2011 when the field is expected toproduce at an average annual rate of approximately 29,000 BOPD. The reportconclusions are summarized as follows: Proven Probable PossibleOil 35,836 70,597 10,246Condensate 984 2,012 76,581Sales Gas 0 0 1,682,265 (Oil and Condensate expressed in thousands of barrels; Sales Gas expressed inmillions of cubic feet) The report also incorporates the Group's projected phase one and phase twodevelopment and capital expenditure plans, which total approximately $395million over 14 years, including the full cost of a stand-alone $115 million,30,000 BOPD pipeline to connect to Transneft's planned East Siberian PacificOcean pipeline. The report shows a maximum investment cash-out amount ofapproximately $50 million over the first four years, at which point the projectis projected to turn cash flow positive. The projected PV10 of the investmentover the 25 year life of the forecast equals $410 million. Further information on the Group's funding requirements and financing plansrelating to the acquisition, as well as further information on Dulisma, will beprovided in due course. 4 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