17 November 2016
Urals Energy PCL ("Urals Energy" or the "Company")
The board of Urals Energy PCL (AIM: UEN), the independent exploration and production company with operations in Russia, is pleased to provide the following update on its plans for operations in 2017:
At RK-Oil, we have completed preparations to re-enter the existing well and this should commence in Q1 2017. At the same time, we are conducting a tender for a contractor to drill a new well, which will commence once approval has been given by the State Authorities, currently expected to be received in late Q2 2017 or early Q3 2017.
Average daily production at Petrosakh continues at 1,250 bbls/day. We have decided to shut in Well 109. The well continued to flow high pressure water, with modest oil production, despite attempts to slow the water flow. As there is a risk that the water might freeze in surface pipe systems, we believe that it is necessary to shut the well in. In the Spring of 2017 we will reopen the well and utilise the well as a water injector to maintain pressure in the area. We have decided to defer drilling at Petrosakh itself and concentrate on our workover programme and additional measures to maintain production levels. At the recently acquired South Dagi licence area, which is managed by Petrosakh, we are preparing plans for an exploratory well in Q3 2017 or Q4 2017. Geological studies are in hand, including a micro seismic survey, and on the basis of a development plan we will seek approvals from the State Authorities.
Production at Articneft is being maintained at 1,096 bbls/day, and we plan to make two cargo deliveries from our sea terminal in May/June 2017 and September/October 2017. We are reviewing the well data from the recently acquired Artic Oil and will be preparing a new development plan. We expect to conduct 3 or 4 well workovers at Articneft during 2017.
Competent Person's Report
In view of our acquisitions during 2016, we plan to commission a new Competent Person's Report during 2017. We propose to do so once our new development plans, as mentioned above, are completed.
Andrew Shrager, Chairman, commented: "We are able to commit to these drilling operations across our portfolio due to our continued production efficiency and positive cash generation at current oil prices and FX rates. The one factor which may cause us to slow the rate of drilling is possible changes in the taxation of oil and gas companies operating in Russia for 2017, for which we have to wait for information until next month or early next year."
For further information, please contact:
Urals Energy Public Company Limited
Andrew Shrager, Chairman
Leonid Dyachenko, Interim 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