20 July 2017
Urals Energy PCL ("Urals Energy" or the "Company")
Dissemination of a Regulatory Announcement that contains inside information according to REGULATION (EU) No 596/2014 (MAR).
The Board of Urals Energy (AIM:UEN), the independent exploration and production company with operations in Russia, is pleased to provide the following operational update:
The Company has received payment from Petraco Oil Company Limited following its recent tanker shipment. As announced on 21 June 2017, the loan provided by Petraco Oil Company Limited, including accrued interest, has now been settled in full.
The Company is planning to make a second tanker shipment in late October of this year.
Following the announcement on 23 May 2017, drilling has penetrated 190 metres of pilling. The bottom of the drill hole reached the pilling rock formation at a depth of 1,787 metres. At the moment the logging of well 130 is proceeding. The Company's plan is to test the reservoir over the next few weeks and complete well 130 over the following weeks. The Company has drilled well 130 with caution to ensure that the problems that the Company had previously encountered during the drilling of well 109 are avoided. A further announcement will be made in due course in respect of any liquids or gases recovered from well 130.
The Company has contracted to lease a modern rig for its South Dagi licence area and expects that mobilisation to the field will be completed by the end of September 2017. In parallel the Company's team will make preparations to spud the well.
As announced on 23 May 2017, our contractor, Vis-Mos Llc, had made slow progress in drilling the first well at RK Oil. Subsequent progress has been similarly slow, with what would appear to be a poorly managed team. The Company has decided to terminate the drilling contract with Vis-Mos Llc and seek compensation for the Company's costs. The contract was on a turnkey basis, but some mobilisation costs were incurred by the Company. The Company is in the process of seeking an independent supervisor and new contractor to continue the drilling.
As disclosed at the time of the acquisition of RK Oil in November 2015, the Russian State registered possible recoverable resources (D1) are estimated at 25 million barrels of recoverable oil. This represents a substantial opportunity in terms of potential production, requiring the drilling of up to six exploration wells. The Company is therefore reviewing a number of options for the way forward for RK Oil's development. These include tendering a contract for a new single well or preferably a multi-well operation with a new contractor, or entering into a risk sharing partnership with a major oil services company to jointly develop the field.
As announced on 30 March 2017, the Company has engaged Blackwatch Petroleum Services to carry out an update of our reserves. Work will commence shortly and a report is expected in later this year.
Dr Svyatoslav Bilibin, (Dr.Sci.Tech. and Corresponding Member of the Russian Academy of Natural Sciences), an independent adviser to Urals Energy, who meets the criteria of a qualified person under the AIM Guidance Note for Mining, Oil and Gas Companies, has reviewed and approved the technical information contained within this announcement. The resources figures contained within this announcement have not been reviewed in accordance with the AIM Guidance Note for Mining, Oil and Gas Companies and, as referenced above, the Company plans to have a review of the Company's assets, in accordance with an appropriate Standard in an updated Competent Person's Report, which the Board has commissioned in for publication in 2017.
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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