Update on strategy and posting of corporate presentation on the Company's website

06 March 2017

Urals Energy PCL ("Urals Energy" or the "Company")
Update on strategy and posting of corporate presentation on the Company's website

The board of Urals Energy PCL (AIM: UEN), the independent exploration and production company with operations in Russia, today provides an update on its strategy for the first half of 2017. In addition the Company has today posted its corporate presentation on its website.

Update on strategy

The Company continues to prepare development plans for approval by the Russian Federal Authorities for its operations on Kolguyev Island, its two companies in Komi (being BVN Oil and RK-Oil) and for the South Dagi licence area on Sakhalin Island. These development plans, once approved, will involve a considerable step up in the Company's drilling programme. Summaries of planned operations for this year in each of the Company's areas of operation are set out below:

Kolguyev Island

a) Undertake an assessment of the well stock efficiency of the recently acquired Artic Oil Company ("ANK").

b) Re-entry of two idle wells with potential additional production of 80 bbl/day.

c) Installation of eight jack pumps and implementation of a workover program to maintain stable production levels.

d) Modelling and assessment of fracking potential for production rates.

e) Undertake two export shipments, likely in June 2017 and October 2017, together with a marine terminal upgrade.

Sakhalin Island

a) Develop and implement a workover programme to maintain a production rate of 1,240 bbl/day from the existing wells.

b) Drill one step-out well and perform two well work-overs at the South Dagi field in the second half of the year, which is expected to lead to an additional incremental production of 290 bbl/day.

c) Upgrade of refinery equipment to increase refinery yield and facilitate production of new products (e.g. gasoline 95 and bitumen) and increase the product yield.

d) Obtain a marine terminal license to permit the sale of bunker fuel, which would be a new, higher margin, use of the refinery's heavy residual product.

Komi

a) Undertake seismic re-interpretation of the two oil fields to evaluate possible license area extensions.

b) Undertake re-interpretation of available geological and geophysical data for BVN Oil.

c) Drill one well and perform one work-over of the existing well for RK-Oil, accompanied by field infrastructure development.

The Board continues to investigate potential partnerships to finance and share risk in the execution of these development plans, but this will take time.

Further announcements in respect of the above matters will be made in due course.

Corporate presentation

The Company's corporate presentation, which contains further details of the Company's development plans and strategy, is available to view at the 'presentations' section of the investor relations area of the Company's website, www.uralsenergy.com

The Company's corporate presentation contains a summary of an independent valuation benchmarking study commissioned by the Company. Among other things, the results of this study indicate that during the period from the fourth quarter of 2015 to the fourth quarter of 2016, Urals Energy's increases in production and 2P reserves were better than that at comparable quoted Former Soviet Union ("FSU") peers. At the end of the fourth quarter 2016 the Company continued to trade at a discount (in terms of reserves and production) to its quoted FSU peers, and had the lowest valuation for its 2P reserves amongst its quoted FSU peers. The valuation of the reserves of quoted FSU companies remain at a significant discount to all AIM quoted oil and gas companies.

 

For further information, please contact:

Urals Energy Public Company Limited
Andrew Shrager, Chairman
Leonid Dyachenko, Chief Executive Officer
Sergey Uzornikov, Chief Financial Officer
Tel: +7 495 795 0300, www.uralsenergy.com

Allenby Capital Limited, Nominated Adviser and Broker
Nick Naylor / Alex Brearley
Tel: +44 (0) 20 3328 5656, www.allenbycapital.com

 

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