| 17/06/2010 |
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Urals Energy Public Company Limited (“Urals Energy”, or the “Company”)
Annual Report and Accounts
Urals Energy (LSE: UEN), an independent exploration and production company with operations in Russia, today announces its audited financial results for the year ended 31st December 2009.
Strategy- Following the divestiture of Dulisma and Taas Yuriakh and the restructure of the Petraco debt after the year end, Urals is now well positioned to recommence development programmes at its two producing fields, Arcticneft and Petrosakh.
- Short-term strategy to investigate opportunities to increase profitability of the Company and to develop a programme to increase production.
- The Company continues to look at potential transactions if they can bring synergy and additional value to the Company.
Operational
- As a result of the divestiture of the Dulisma asset in August 2009 and the Chepetskoye asset (“CNGDU”) in February 2009, average 2009 production decreased to 4,409 BOPD (6,285 bopd in 2008).
- Production from Arcticneft and Petrosakh decreased to 876 thousand barrels in 2009 from 1,126 thousand barrels in 2008.
- Current daily levels of production at Arcticneft increased in 2010 to 725 BOPD from an average of 641 BOPD in 2009.
- Current daily levels of production at Petrosakh decreased in 2010 to 1,577 BOPD from an average of 1,760 BOPD in 2009 and stabilized at this level.
- In June 2010 the first of three sidetrack wells was spudded at Petrosakh.
Financial
- Significant reduction of net debt from $658.2 as at 31 December 2008 to give net cash of $4.5 million1 as at 31 December 2009.
- In 2009 the Company sold Dulisma and Taas Yuriakh for the full discharge of $630 million of debt owed to Sberbank.
- The Company also terminated a Put option agreement with Limenitis Holdings (an affiliate of the Ashmore Funds).
- Gross Revenues, excluding crude oil purchased for resale, decreased by $85 million to $65 million, largely due to the divestiture of the Dulisma in August 2009 and decrease of crude oil resale activity at the end of 2008.
- An operating loss of $138 million was recorded, largely due to the impairment losses recognized with respect to Dulisma’s production assets of $122 million.
- Extensive cost reduction programme introduced during 2009 has resulted in a decrease in Selling, General and Administrative expenses.
Corporate
- Completed significant corporate transactions:
- Divestiture of Dulisma and Taas Yuriakh for full discharge of $630 million of debt.
- Divestiture of Chepetskoye NGDU.
- Significant Board and Senior Management changes including appointment of Alexei Maximov as Chief Executive Officer and a Director and appointment of Grigory Kazakov as Chief Financial Officer.
Outlook
- Focused on early production increase from existing wells.
- Complete geological studies in 2010 to develop a drilling program.
- Assess potential growth opportunities to maximize synergies with current asset portfolio.
1Calculated as short-term debt plus payables to Finfund less cash in bank, less loan receivable from Taas and less Loans issued to related parties as at 31 December 2009 taking into account of the conversion of $2.0 million of Petraco debt subsequent to year-end
Alexei Maximov, Chief Executive, commented:
“As we look back on 2009, I am pleased to report the significant progress we have made in restructuring our debts and streamlining the entire business. Following the divestiture of several of our assets, we were able to return to trading on AIM and build a healthier balance sheet following Petraco’s refinancing.
Having stabilized the business, we have also moved quickly to restart operations across our remaining licenses and importantly increase our production.”
 Click here to download a PDF file of the full Annual Report and Accounts.
Enquiries:
Allenby Capital Limited
Nominated Advisor and Broker +44 (0)20 3328 5656
Nick Naylor
Alex Price
Pelham Bell Pottinger +44 (0)20 7861 3232
Mark Antelme
Evgeniy Chuikov
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