28 February 2018
Urals Energy PCL ("Urals Energy" or the "Company")
The board ("Board") of Urals Energy PCL (AIM: UEN), the independent oil and gas exploration and production company with operations in Russia, is today providing an update for its shareholders.
The Board notes the general strength in oil prices seen over the last months and believes this may have led to renewed investor interest in oil producers generally, including oil and gas companies operating in Russia and the Former Soviet Union.
The Company's recent levels of oil production are in line with management's expectations. The Company continues to progress its various operational and drilling programmes and is working towards pursuing its strategic plans for 2018, as announced on 14 November 2017. In line with this, the Company continues to explore opportunities for partnerships to manage the development of certain of its assets.
Drilling at the Company's first well at the South Dagi field on Sakhalin Island continues in line with management's expectations, which took account of anticipated potentially difficult weather conditions in the first quarter that did indeed occur, limiting logistics and operations. As announced on 6 February 2017, it is anticipated that this well's target depth of 2,200 meters will be reached during the second quarter of 2018.
The Board expects that the next tanker shipment for export from Arcticneft on Kolguyev Island will likely be before the end of the second quarter of 2018.
The Company has previously made a number of announcements regarding the commissioning of Blackwatch Petroleum Services to prepare a Competent Person's Report on the Company's portfolio of licences. All of the Company's licences and operations are located in Russia, and therefore Russian State Registered reserves have represented the main official data set for a number of licences in the Company's portfolio. Russian State Registered reserves are not an acknowledged Standard for the reporting of reserves under the AIM Guidance Note for Mining, Oil and Gas Companies, although the Company has provided estimates, where available, of the broad equivalence of Russian State Registered reserves to the Society of Petroleum Engineers classification in its announcements. A stated main objective of the Competent Person's Report is a formal and independent appraisal of the Company's entire portfolio of licences under the international Society of Petroleum Engineers classification.
Blackwatch Petroleum Services' analysis of the Company's South Dagi licence was concluded in late 2017, and on 21 December 2017, the Company announced that Blackwatch Petroleum Services has estimated the mean total 2P reserves at South Dagi to be approximately 23.5 million barrels of oil across six reservoirs, when assessed under the International Society of Petroleum Engineers classification.
The Company is still working with Blackwatch Petroleum Services and has not yet received a draft of Blackwatch Petroleum Services' Competent Person's Report on the Company's entire portfolio of licences in the intended final basis of preparation. However, based on the draft underlying data that has been received from Blackwatch Petroleum Services to date, the Board currently believes that the main finding of the final Competent Person's Report will be an independent confirmation in line with the reserves information that the Company has already published to date, but prepared under the International Society of Petroleum Engineers classification.
Further announcements will be made as appropriate.
For further information, please contact:
Urals Energy Public Company Limited
Andrew Shrager, Chairman
Leonid Dyachenko, Chief Executive 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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