Urals Energy Public Company Limited Operational update (3059A)
10 September 2018 - 11:11PM
UK Regulatory
TIDMUEN
RNS Number : 3059A
Urals Energy Public Company Limited
10 September 2018
10 September 2018
Urals Energy Public Company Limited
("Urals Energy", the "Company" or the "Group")
Operational update
The Board of Urals Energy (AIM:UEN), the independent exploration
and production company with operations in Russia, provides the
following operational update.
Drilling at South Dagi
The Company is pleased to announce that the drilling of the
Group's planned exploration well (Well 1) at the South Dagi field
on Sakhalin Island has reached the target depth of 2,207 meters.
The casing of Well 1 has been completed and the next stage of the
well's development is the testing of the discovered object layers.
Nine object layers have been discovered in accordance with core
samples and logging data (from depths between 965 meters to 2,092
meters). The Board anticipates that the full testing of Well 1 will
be completed in the next two months and the Company will provide
more detailed updates as this process is progressed.
In line with the Company's strategy for the development of the
South Dagi licence area, as announced on 19 June 2018, following
the completion of Well 1, the Company's drilling rig will be moved
for the drilling of Well 2, which is an exploration well.
Tanker shipment and pre-export short term loan finance
arrangement
The Board anticipates that the second 2018 tanker loading for
Articneft will be in November 2018. At present, the Board expects
that up to 20,000 tons of special light crude oil (up to 158,000
barrels) will be shipped from Kolguev Island.
Ahead of the anticipated November 2018 tanker shipment, the
Company has entered into a pre-export short term loan finance
arrangement with Petraco Oil Company Limited ("Petraco"), under
which Petraco has advanced the sum of US$5.0 million to the Company
(the "Loan").
The key terms of the Loan are that:
-- it is repayable immediately following the loading of the
tanker shipment, scheduled for November 2018;
-- interest is chargeable at a margin of 5% over two months US$
LIBOR up to the date of the bill of lading of the tanker, after
which it reduces to 2% over US$ LIBOR; and
-- it is secured by way of a pledge by Urals Energy over the
shares that Urals Energy holds in JSC Articneft.
The proceeds of the Loan will be used by the Company for general
working capital financing.
Partnership strategy
Discussions continue with potential partners and contractors for
the next stage of exploration drilling at Komi and for the further
development of the Group's reserves on Kolguev Island.
Interim results
The Company intends to announce its interim results for the half
year ended 30 June 2018 in the last week of September 2018. These
interim results will not include a revenue contribution from the
most recent tanker shipment from Kolguev Island, which occurred in
in July 2018 after the interim accounting reference date, with the
proceeds from this shipment being received by the Company in August
2018.
Kholmsk seaport
On 6 August 2018, the Company announced that it had acquired a
23% voting interest in the Kholmsk commercial seaport, which is
situated on the Western side of Sakhalin Island. In conjunction
with support from other shareholders in the seaport the Company has
secured the election of five of the Company's representatives as
directors to the seaport's board (out of a total board of seven
directors).
The Company intends to work with its partners, which include the
local government and other stakeholders, to enhance the management
and administration of the seaport. The seaport has bunkering
facilities to supply fuel oil to local fishing fleets and ferries,
which are the main users of the seaport. The Group's refinery at
Petrosakh on Sakhalin Island refines all of the Company's crude oil
production on the island, including producing fuel oil, and the
Board believes that the investment in the seaport will allow the
Group to market its fuel oil directly to clients of the seaport and
therefore enhance the margins of its bunker fuel sales operations
at Kholmsk. The Board also believes that the investment in the
seaport will provide the Group with greater strategic flexibility
in terms of storage capacity relating to both the importation and
exportation of products from Sakhalin Island.
Mr Vasily Nikoluk, Urals Energy's Chief Geologist, a graduate of
the Ivano Frankivsk University and the former head of the geology
department at Gazpromneft, 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.
- Ends -
For further information, please contact:
Urals Energy Public Company Limited
Andrew Shrager, Chairman Tel: +7 495 795 0300
Leonid Dyachenko, Chief Executive
Officer
Sergey Uzornikov, Chief Financial www.uralsenergy.com
Officer
Allenby Capital Limited
Nominated Adviser and Broker
Nick Naylor / Alex Brearley Tel: +44 (0) 20 3328
5656
www.allenbycapital.com
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Authority to act as a Primary Information Provider in the United
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of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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