Operational and corporate update
February 19 2010 - 7:03AM
UK Regulatory
TIDMUEN
RNS Number : 4097H
Urals Energy Public Company Limited
19 February 2010
19 February, 2010
Urals Energy Public Company Limited
('Urals Energy' or the 'Company')
Operational and corporate update
Urals Energy, the AIM listed independent exploration and production company with
operations in Russia, today provides an operational and corporate update.
Operations
Production from Urals' two producing fields, Arcticneft and Petrosakh, is
currently 645 barrels of oil per day ('bopd') and 1,420 bopd respectively.
Workover is currently underway on well 47 at Petrosakh, which is anticipated to
increase current production by up to 140 bopd, at a total cost of approximately
US$50,000. In addition, another two well rod pumps were acquired and are
awaiting installation following the swabbing of well 47. Subject to available
financing or internal cash flow generation, a total of ten workover wells are
being planned by the Company for 2010 at Petrosakh. These workover wells are
being undertaken primarily to mitigate production decline and the Company
expects to see a moderate short-term increase in production.
The Company is also expecting to spud the first of three side track wells at
Petrosakh in May 2010, with an anticipated initial flow rate of up to 300 bopd.
Following changes in Russian legislation regarding offshore exploration, only
State companies with more than three years experience of off-shore development
can operate off-shore blocks. Consequently, the Company did not sign the
farm-out agreement for the exploration of the off-shore Petrosakh licence. All
3P reserves at Petrosakh were impaired in the Company's financial statements in
2008.
Financing
Currently, Petrosakh refines and sells 100% of its production on the domestic
Russian market. Proceeds from such sales are currently anticipated to be
sufficient for Urals' short-term liquidity requirements. However the Company
believes that additional financing will be required before the first export
delivery from Arcticneftand the Board is currently reviewing options in this
regard.
The Company has also started the process of looking at financing options for its
2010 development programme. The total requirement for the year ranges from US$10
to US$15 million, depending on the extent of the work programme, its success and
other factors.
Negotiations with Petraco
Discussions relating to the restructuring of the Company's export financing with
Petraco remain a key priority and the Company continues to progress its
discussions with Petraco.
Petraco have indicated to the Company that they may seek a pledge over some of
the Company's assets as part of a restructuring arrangement. At this time the
Directors believe that the granting of such a pledge may require the approval of
the Company's shareholders and this would result in an Extraordinary General
Meeting being convened to seek such shareholder approval. A further
announcement will be made in due course.
The foregoing announcement contains certain forward-looking statements
concerning future circumstances and results. Such statements are based on
current plans, estimates, projections and expectations, which are based on
certain assumptions that the Company believes are reasonable at this time. No
representation or warranties are given as to the achievement of the matters set
forth in such statements and no reliance should be placed thereon.
Enquiries:
+----------------------------------+--------------------------------+
| | |
| Allenby Capital Limited | +44 (0)20 3328 5656 |
+----------------------------------+--------------------------------+
| Nick Naylor | |
| Jamie Boyd | |
+----------------------------------+--------------------------------+
| | |
+----------------------------------+--------------------------------+
| Pelham Bell Pottinger | +44 (0)20 7337 1500 |
+----------------------------------+--------------------------------+
| Mark Antelme | |
+----------------------------------+--------------------------------+
| Evgeniy Chuikov | |
+----------------------------------+--------------------------------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
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