Acquisition

RNS Number:2333D
Urals Energy Public Company Limited
19 May 2006

               Antimonopoly Approval of the Dulisma Acquisition
            Purchase of Oil & Gas Assets in Komi Republic from Lukoil


Urals Energy ("Urals Energy"or the "Group" or the "Company"), a leading
independent exploration and production company with operations in Russia which
was admitted to trading on AIM in August 2005, announces:

* Receipt of the approval by the Russian Federal Antimonopoly Service for the
previously announced acquisition of OOO Dulisma ("Dulisma") and OOO Lenskaya
Transportnaya Kompanaya ("LTK"), and

* The acquisition of oil assets located in the Komi Republic from affiliates of
OAO Lukoil with Russian State reserves of 25 million barrels of oil for $1.5
million in cash

FAS approval of the Dulisma and LTK Acquisitions

Urals Energy announces that is has received formal approval from the Russian
Federal Antimonopoly Service for the acquisitions of Dulisma and LTK, which were
announced on 18 April 2006.  This approval is an important step towards the
completion of these transactions.

Acquisition of oil and gas assets in the Komi Republic from OAO Lukoil

Urals Energy also announces that it has acquired the rights to purchase OOO "
Voivozhneft", OOO "Nizhnyomrynskaya Neft" and OOO "Verkhneomrynskaya Neft", each
a Russian limited liability company, from OOO Lukoil-Komi and OAO Komineft,
subsidiaries of OAO Lukoil.  The acquisition is for $1.5 million in cash plus
certain working capital adjustments and is expected to be completed in June
2006.  The closing is subject to approval by the Russian Federal Antimonopoly
Service and other customary conditions.

Each of the companies to be acquired owns subsoil licences located near the
Company's existing producing properties in the Komi Republic.  The licences to
be acquired have been in production for over 20 years.  According to the Russian
State reserves body, the main Licence being acquired is credited with
approximately 25 million barrels of C1-C2 reserves.  The licence is currently
producing approximately 350 bopd.  On completion of the acquisition, Urals
Energy intends to re-evaluate the reserves, identify areas for further
development and prepare and institute a rehabilitation and production
enhancement program.  Based on the Company's experience, the re-evaluation of
the reserves by the Group's outside reserve evaluation firm, DeGolyer and
MacNaughton, normally results in a lower quantity of reportable recoverable
reserves than is recorded by the Russian State reserves body.

The Group intends to pay for the acquisition out of its existing cash reserves.

The acquisition fits Urals Energy's acquisition criteria of acquiring producing
and non-producing assets in complementary areas of Russia and the CIS with
development and exploration potential at attractive prices.

William R. Thomas, Chief Executive Officer, commented:

"The approval of our Dulisma and LTK acquisitions by the Russian authorities is
a welcome step in integrating  these important assets into our portfolio.  The
added benefit of the acquisition of the additional assets from Lukoil is a
significant low cost bolt-on for the Group, giving us assets near to our
existing producing properties in Komi.  This also evidences our ability to work
with Lukoil, one of the major oil companies in Russia, on its portfolio
rationalisation program.  We are confident this acquisition will also contribute
to our continued growth."

Background to Urals Energy

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 was admitted to trading on AIM in August 2005.

The Group 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 Group's six existing E&P subsidiaries have Proved and Probable reserves of
116 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 Group's two largest subsidiaries by production, Petrosakh and Arcticneft,
own and operate refining assets with a total refining capacity of 5,300 BOPD,
which provide the Group 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.

According to a preliminary 12 April 2006 estimate by the Company's independent
engineering consultants, DeGolyer and MacNaughton ("D&M"), the recently
announced acquisition of the Dulisma Field will increase Urals Energy reserves
by approximately 109 million barrels of proved and probable oil reserves,
approximately 87 million barrels of possible oil and condensate reserves and 1.9
trillion cubic feet of possible gas reserves as at 31 March 2006, according to a
report from DeGolyer and MacNaughton, the Company's engineering consultants.

19 May 2006

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



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