TIDMUEN
RNS Number : 7167B
Urals Energy Public Company Limited
20 April 2012
Urals Energy Public Company Limited
("Urals Energy" or the "Company")
Petrosakh: Well # 41,operational update and
notification of results
Urals Energy, the Russian focused oil & gas exploration and
production company, is pleased to announce that development
drilling operations at Petrosakh, located on the east coast of
Sakhalin Island, have recommenced with the drilling of Well # 41
and an operational update.
Highlights
-- Drilling of Well#41 recommenced
-- Management team strengthened at Petrosakh
-- Articneft in preparation for the next planned tanker
shipment, tentatively scheduled for October 2012
-- Full Year results to be announced by the end of May 2012
Operational update
On 30 September 2011 when the Company announced its half-year
results to 30 June 2011, the Board stated that its immediate focus,
as part of the Company's recovery strategy, was the continued
strengthening of its balance sheet and making further progress on
the repayment of its outstanding debts.
To this end, considerable senior management time was devoted
with much success, culminating in the assignment of the long
standing loans to Taas-Yuriakh Neftegazodobycha to Nagelfar Trade
and Invest Ltd for which the Company received US$26.0m. This
enabled the Company to settle its long-standing dispute with
Finfund and Yakut Energy Limited in exchange for the payment of
US$4.4m by Urals to Finfund, reduce the debt to Petraco Oil Company
Limited to approximately US$9.9m, and cover certain other
long-standing obligations, as well as fund its ongoing
operations.
The Board believes that as a result of this transaction the
Company entered 2012 in a much stronger position than it has been
for many years.
Legacy issues
The Board is pleased to report that it has reached a general
understanding with Petraco regarding the process of releasing some
of their security of the Company's assets (in accordance with the
existing loan restructuring agreement), which is anticipated to
take place over the coming months. Further announcements will be
made at the relevant time.
Regarding the loan dispute with Mr. Rovneiko, management has
made every effort possible to distance itself from him, and despite
management time continuing to be diverted in relation to dealing
with his various unsubstantiated claims, progress is being made and
a decision of the London Court of Arbitration is expected before
the end of June 2012.
A satisfactory resolution of the past issues is important and
the Board is committed to shifting the Company's focus to
operations and growth opportunities.
Petrosakh
The Board has evaluated the reasons for the historical
operational problems at Petrosakh with wells #35 and #51. As a
result of this assessment personnel changes have been implemented
both at the corporate and Petrosakh level, including the
appointment of a new corporate Vice President of operations (who
presently performs the functions of PSK general manager) and a
drilling supervisor, both of whom are experienced professionals in
the sector.
In addition, Urals have increased the effectiveness of the
operations at Petrosakh and strengthened its vertical reporting
systems. As a result, the headcount at Petrosakh has been reduced
by more than 50 people and the remuneration of those remaining has
been changed so as to be more focused on results.
The Board expects that these measures will lead to the
successful finishing of the drilling of well #41 towards the end of
May 2012. After this, Urals will evaluate its future drilling
plans, including whether to finish well #51, as well as drilling
additional wells in the Southern part of the Okruzhnoye field.
Finally, the Board is currently evaluating the feasibility of
returning to export shipments from Petrosakh, particularly of
refined products, as well as shifting the emphasis to higher margin
products sold on the local market.
Arcticneft
The Company is currently developing a renewed drilling programme
for Arcticneft, which is presently producing at approximately 800
bbpd of crude, in preparation for the next planned shipment to
Petraco, tentatively scheduled for October 2012. According to
existing information, the State authorities have not yet made a
decision regarding the Tarkskoye deposit on Kolguyev Island, but
the situation is being monitored and the Company will consider
participating in the auction once it is announced.
In addition to the Company's existing operations, the Board
continues looking at new opportunities, be it in identifying ways
of utilising the upside potential in downstream and marketing
opportunities on the existing acreage, evaluating possible
acquisitions and joint venture targets with a view to expanding and
optimising the portfolio.
Notification of Results
The Company is planning to announce Full Year results for the
year ended 31 December 2011 towards the end of May 2012. At this
time the Company looks forward to providing further operational and
financial updates.
Commenting on today's announcement, Alexei Maximov, CEO
said:
"We have been working hard on dealing with our past failures at
Petrosakh and preparing the next phase of the development drilling
campaign. We hope that well #41 will signal another important step
in the rebuilding of Urals' fortunes as the Company focuses on
capturing the potential of its Petrosakh and Arcticneft assets,
having made considerable progress in drawing the line under the
various legacy issues.
The Board is committed to resolving the outstanding legacy
issues this year and to reporting to our shareholders a renewed and
dynamic growth strategy for 2013 and beyond. To this end we are
working to strengthen our team, as well as the Board, and I look
forward to updating shareholders as these matters progress."
Enquiries:
Urals Energy Public Company Limited +7 495 795 03 00
------------------------------------- ---------------------
Alexei Maximov
------------------------------------- ---------------------
Sergey Uzornikov
------------------------------------- ---------------------
Allenby Capital Limited +44 (0)20 3328 5656
------------------------------------- ---------------------
Nick Naylor
Alex Price
------------------------------------- ---------------------
Pelham Bell Pottinger +44 (0)20 7861 3232
------------------------------------- ---------------------
Mark Antelme
------------------------------------- ---------------------
Maria Blank
------------------------------------- ---------------------
This information is provided by RNS
The company news service from the London Stock Exchange
END
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