UEN Urals EN.

RNS Number:1667Z
Urals Energy Public Company Limited
02 March 2006

FOR IMMEDIATE RELEASE:

2 March 2006


                      Urals Energy Public Company Limited

   Petrosakh Exploration Drilling and Operational Update and Corporate Update


Urals Energy Public Company Limited ("Urals Energy" or the "Company") today
announces an exploration drilling and operational update for its subsidiary ZAO
Petrosakh located on Sakhalin Island.

Urals Energy is a leading independent exploration and production company with
operations in Russia.  Urals Energy listed its shares on the London Alternative
Investment Market in August 2005, and since listing has developed its asset base
both organically and by acquisition growing production from 4,272 bopd to
c.9,000 bopd.

Exploration Drilling

The East Okruzhnoye No. 1 exploration well reached its total measured depth of
2,848 meters on 23 January 2006.  Logs have been run and interpreted and a
Vertical Seismic Profile (VSP) was shot.  Based on log results, casing was set
and cemented on 19 February 2006.  The logs indicate that two potential
oil-bearing formations were encountered in drilling, the Borsky formation
(2,402-2,466 meters MD) and the Pileng formation (2,696-2,807 meters MD).
Preparations are now underway to test at least five different intervals within
the Borsky and Pileng formations.  Testing operations are estimated to last
several weeks.

Following analysis of the well logs, it is not yet possible to determine
accurately oil saturation parameters and whether the formations encountered will
flow commercial volumes of oil.  Certain data indicates the reservoir(s) may be
tight due to low permeability, but this can only be determined by further
testing the identified intervals.

As previously announced, the Company was granted an extension of the
Pogranichnoye License on 26 January 2006.  This extension provides the Company
five additional years to properly evaluate the prospectivity of this license
area.  Results of the East Okruzhnoye No. 1 will help in planning future
exploration activity.

The Company will provide a further update when appropriate information is
available.

2006 Capital Budget Approved - Driving Increased Production

The Company announces that total projected capital expenditure of $40 million
for 2006 has been approved by the Board of Directors.  Capital investment in
2006 remains focused on increasing production through development drilling and
exploring the Company's high-impact prospects in Sakhalin Island and Timan
Pechora.

The company now has a year-end production target of approximately 12,000 BOPD
and is currently working towards total production of 14,000 BOPD by the end of
2007.  This exceeds the IPO production estimate of 10,500 BOPD by 12 months.

Annual General Meeting

Urals Energy will hold its 2006 Annual General Meeting in London on 25 May 2006.
Further details will be provided nearer the time.


William R.Thomas, Chief Executive Officer, commented:

"We have made good progress with our first exploration well offshore Sakhalin
Island, the East Okruzhnoye No. 1 and as such we have a better understanding of
the geology and formations in the area .  However, we need to test the well in
order to ascertain its commerciality.  The presence of oil-bearing reservoirs,
if confirmed, is encouraging for the other prospects located in our license
area. The data gathered from this well will be invaluable in determining our
future activities on the licence area"

2 March 2006

Pelham PR
James Henderson                                                  020 7743 6673
Gavin Davis                                                      020 7743 6677



About the Company:

Urals Energy is an independent exploration and production (E&P) company with its
principal assets and operations in Sakhalin Island, Timan Pechora (including
areas in the Nenets Autonomous Okrug and Komi Republic) and the Republic of
Udmurtia, Russia. The Company listed on AIM in August 2005.

The Company is focused on the integration of its five recently acquired
subsidiaries and the exploitation of their assets. In addition, it is actively
seeking to continue to grow and diversify its reserve and production portfolio
through exploration activities and the acquisition of additional E&P companies
or assets by taking advantage of the ongoing rationalisation of E&P assets in
Russia.

The Company's six E&P subsidiaries have Proved and Probable reserves of 118
million barrels of oil equivalent (MMBOE) and produced approximately 6,237
barrels of oil per day (BOPD) during the second six months of 2005.

The Company's two largest subsidiaries by reserves and production, Petrosakh and
Arcticneft, own and operate refining assets with a total refining capacity of
5,300 BOPD, which provide the Company with the ability to maximise the value of
the oil produced by choosing between the sale of oil or of refined products
depending on market conditions, tax considerations and other factors.




                      This information is provided by RNS
            The company news service from the London Stock Exchange
END

MSCKFLFBQXBFBBF

Urals Energy (LSE:UEN)
Historical Stock Chart
From Jun 2024 to Jul 2024

Urals Energy (LSE:UEN)
Historical Stock Chart
From Jul 2023 to Jul 2024