30 March 2017
Urals Energy PCL ("Urals Energy" or the "Company")
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:
Oil production in the first quarter of 2017 has been averaging approximately 1,110 bbls/day, compared with an average of approximately 1,050 bbls/day in the last quarter of 2016, representing an increase of 5.7%, due to the benefits of well work overs. Further work overs are planned on the well stock acquired via the acquisition of Artic Oil in September of last year.
A first tanker shipment is scheduled for late June 2017, with a second in October 2017. Pre-export finance is being negotiated to cover pre-export taxes and duties. The total volume of commercial crude produced on Kolguev Island that is currently held in stock tanks is approximately 235,000 barrels.
The Company is at the final stage of negotiation in respect of a rig leasing contract with Jereh Group, a Chinese company, to be deployed to drill our first well at South Dagi. As mobilisation and transit will not be completed until June or July 2017, the Board has decided to use the Group's drilling team, who will be responsible for the South Dagi well, to drill one well with our own rig at Petrosakh, with the option of a second. This represents a change in the timing of Board's drilling plan for Sakhalin.
Production at Petrosakh continues to average approximately 1,135 bbl/day, all of which is processed into products at our own refinery and sold on the Island. Local product prices have remained strong.
The planned well for RK-Oil will be spudded shortly, which represents a delay in the Board's original plan. This delay has predominantly been due to the early melting of nearby ice roads. However, all equipment is in place and final preparations are being made. A further announcement in respect of this well will be made in due course.
Competent Person's Report
The Company is engaging Blackwatch Petroleum Services to prepare a Competent Person's Report on its portfolio of licences. It is expected that this will be completed in June 2017.
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