Operational Update
June 03 2008 - 2:01AM
UK Regulatory
RNS Number : 7965V
Urals Energy Public Company Limited
03 June 2008
Urals Energy Public Company Limited
Reserves Increases and Operational Update
Urals Energy ("Urals Energy", the "Company" or the "Group") (LSE: UEN) a leading independent exploration and production company with
operations in Russia today announces the latest estimates published by DeGolyer and MacNaughton (D&M) for its total proven, probable and
possible petroleum reserves as at 31 December 2007 and the value of these reserves. The Company also provides an update on operations.
Reserves Upgrade and Acquisition of 35.3% of Taas Yuriakh
* Upgrades driven by the acquisition of Taas Yuriakh and upward revisions to Dulisma reserves estimates, result in a 104% increase
in total Group 2P reserves on a BOE basis to 1183 MMbbls BOE (Q1- 2007: 579MMbbls BOE).
* 117% year on year increase in 2P liquids reserves to 560MMbbls (oil plus condensate) net to Urals (Q1-2007: 258 MMbbls). Of this
302MMbbl increase, the Taas Yuriakh acquisition contributes 253 MMbbls (net to Urals Energy) according to D&M, with the remaining increase
resulting from an upward revision of the oil and condensate reserves in the Dulisma field, together with reserves adjustments in Urals'
legacy assets.
* The sale of Urals' Komi properties in April 2008 resulted in a decrease in the Group's total reserves of 16.6MMbbls according to
D&M. The Nizny Omrinskoye and Voyvozh fields' reserves that were part of the sale were not included in the D&M report, and therefore this
reserves reduction does not account for these fields.
* 100% and 78% increase in Dulisma free gas and condensate 2P reserves to 3.8 TCF and 82MMbbls respectively (Q1-2007: 1.9TCF and
46MMbbls). On a BOE basis this equates to 642MMbbls BOE for the free gas reserves only in Dulisma.
* As of March 23, 2008 the Russian State reserves Committee has adjusted the total Taas Yuriakh C1+C2 recoverable oil reserves in a
State Reserves Balance upwards to 900MMbbls (317MMbbls net to Urals) from 414MMbbls, including the southern Kurungsky extension of the
Sredne Botuobinskoye (SRB) field.
* License rights to overlying gas have been confirmed for Taas Yuriakh as of May 27, 2008. According to the Russian State Balance,
the C1+C2 gas reserves total 6.3 Tcf (2.2 TCF net to Urals, or 366 MMbbls BOE). These reserves have not been included in the D&M report as
of December 31, 2007.
* 137% year on year increase in the PV10 of the Group's 2P reserves to US$3,248 million (Q1-2007: US$1,368 million).
* The full report by DeGolyer and MacNaughton is available on the Company's website in the Investor Relations section at the
following address: http://www.uralsenergy.com/ir_presentations.htm
Financial Highlights
* A 14 % increase in total revenues for the year to 31 December 2007 to US$194.1 million ($169.6 million in 2006)
* Strengthened financial position following US$128 million equity capital raising and US$130 million Dulisma project finance loan
granted by Sberbank. The loan facility will be increased by US$140 million in June 2008.
* Proceeds from sale of Komi properties of US$93MM as of April 23, 2008.
* Of the US$600 million Taas project finance loan facility granted by Sberbank in 2007 the first tranche of US$60 million has been
disbursed and used for field infrastructure development, sidetracks drilling, 2D & 3D seismic acquisition and engineering services.
Operational Highlights:
* Ongoing consolidation of legacy assets remaining after sale of certain Komi properties, with a view to completing these divestures
by year-end 2008.
* Production from remaining assets stabilised at 5,500 bopd. This excludes production by Taas Yuriakh.
* Dulisma plus Taas Yuriakh combined 2P forecast average production of 58,000 bopd for 2012 and 85,000 bopd for 2015 net to Urals
Energy according to D&M.
* Dulisma capex funding $50.6 million in 2007, total capex paid to date in 2008 $56.8 million, and the full capex budget for 2008 is
US$159.2 million.
* Dulisma 2008 drilling underway and with 2nd 225 ton mobile drilling rig onsite and set to spud by June 10, 2008.
* Dulisma well � 105 pilot hole provided a Drill Stem Test result above expectations and the horizontal side track for this well is
nearing completion.
* Dulisma Central Processing Facility and Pipeline construction commenced and on schedule for completion end 2008, Central Transfer
Facility (to ESPO) currently being tendered for construction with completion and start up planned for end Q1 2009. To date 22 kilometres of
the pipeline have been constructed.
* 10th horizontal sidetrack drilled in Taas Yuriakh, in-field roads and pads undergoing construction.
* Required designs for the first phase drilling program and infrastructure for SRB and the connection pipeline are being finalized
for State approval this summer.
* Major 2D & 3D seismic acquisition program completed over the SRB Taas Yuriakh field during the winter 2007/08 with processing
underway and interpretation to be ready in Q3 / Q4 2008.
Leonid Dyachenko, Chief Executive, commented:
"We are pleased to report a significant increase in our reserve base, driven both by acquisition and by upgrades to existing assets.
This further strengthens our position as one of the leading Russian independent E&P companies. Importantly, the rise in the estimated
valuation highlights the success of our acquisitions strategy and the attractiveness of the East Siberian oil fields.
Operationally, we are making good progress on all our key developments. Work on both Dulisma and SRB fields is gaining momentum and we
are on track to deliver to our stated targets."
3 June 2008
Enquiries:
Pelham PR
Gavin Davis +44(0)20 7743 6677 / +44(0)7910 104 660
Evgeniy Chuikov +44(0)20 3008 5506 / +44(0)7894 608 606
Elena Dobson +44(0)20 3178 4418 / +44(0)7932 524 760
This information is provided by RNS
The company news service from the London Stock Exchange
END
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