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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Urals EN. | LSE:UEN | London | Ordinary Share | CY0107130912 | ORD USD0.126 (DI) |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 35.00 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
RNS Number:1218U Urals Energy Public Company Limited 15 November 2005 FOR IMMEDIATE RELEASE: 15 November 2005 Urals Energy Public Company Limited Completion of the US$70 million OOO Dinyu Acquisition, Provision of $100 million Revolving Loan Facility & Exploration Drilling Update Urals Energy Public Company Limited ("Urals Energy" or the "Company") today announces the successful completion of its acquisition of OOO Dinyu, the provision of $100 million revolving loan facility and an exploration drilling update. Urals Energy is a leading independent exploration and production company with operations in Russia. Urals Energy shares were admitted to trading on the London Alternative Investment Market in August 2005, when it placed shares resulting in a total fund raising of $131.1 million. Completion of US$70 million acquisition of OOO Dinyu Further to the Company's announcement on 3 November of the proposed acquisition of assets in the Komi Region of Russia, Urals Energy today announces that it has closed the US$70m acquisition of OOO Dinyu. This follows completion of all due diligence and approval from FAS (Russian Federal Antimonopoly Service). The Company acquired ownership of OOO Dinyu and its assets from Lonsdacks Investments Limited. Following completion, the acquisition gives the Company immediate incremental production of approximately 2,900 bopd, bringing total Company production to c.8,700 bopd, an increase of 50%. The acquisition was satisfied through a cash consideration of US$62 million funded through a combination of existing cash resources and debt, following completion of a new senior debt facility referred to below. As part of the transaction, Urals Energy also assumed US$8 million in debt. As well as incremental production, the acquisition gives Urals Energy extensive exploration acreage covering 960 square kilometres in the Komi region and complements the Company's existing asset base and operating experience in the area. OOO Dinyu operates two licences, the Dinyu-Savinbor Field (100% ownership) and the South Michau Field (65% ownership) with combined proved reserves of approximately 12 million barrels and probable reserves of approximately 10 million barrels, for total 2P additions of at least 22 million barrels. Urals Energy is actively negotiating the terms to acquire the remaining 35% of South Michau not owned by Dinyu. Current production from the two licences is c.2,900 bopd. A recently acquired 3D seismic survey indicates five exploration prospects that are analogous to the existing producing structure. While the South Michau Field is still to be developed, Dinyu-Savinbor is estimated to add 80% of the total 2P additions of 22 million barrels to the group bringing total management-estimated Company 2P reserves to 111 million barrels. The Company will implement an aggressive appraisal and development programme at Dinyu with the objective of increasing current Dinyu production from 2,900 bopd to c.4,500 bopd by the end of 2006. This would correspondingly increase Urals Energy's total oil production to approximately 10,300 bopd by the end of 2006. Approximately 35% of the acquired assets' current production is exported with the 65% balance being sold to the domestic market. The producing fields are connected by a pipeline to Transneft. Oil quality is light with a gravity of 36o API. This acquisition gives Urals Energy c.3,600 bopd of production in the Komi region and the opportunity to reduce unit costs through economies of scale. The Komi region represents a core business region for the Company which it will further develop through a combination of organic growth and acquisitions. Closing of US$100 million loan facility with BNP Paribas. The Company also announces that it has closed a five year minimum US$100 million reserve-based revolving loan facility with the potential to increase to US$150 million. The facility is provided by BNP Paribas with whom Urals Energy has a long standing relationship. This facility provided a proportion of the funding required to close the OOO Dinyu acquisition and gives Urals Energy the financial flexibility to continue its strategy of growing organically and through acquisition. Exploration Update - Petrosakh Urals Energy also announces the commencement of drilling the first exploration well to test the Pogranichny license offshore Sakhalin Island. The East Okruzhnoye No. 1 well spudded on November 1 and is now drilling and has reached a depth of 550 metres. This well is ahead of schedule and is expected to reach the target formation, the Pileng horizon, by the end of the year. The Pogranichny license area is held by the Company's 97%-owned subsidiary, ZAO Petrosakh ("Petrosakh"). If the well encounters an oil bearing zone, extensive testing will be conducted to determine commerciality. Petrosakh is already producing 2,800 bopd from other wells in the Okruzhnoye field with a 14 well development drilling programme targeted at increasing production to c. 5,800 bopd. DeGolyer and MacNaughton estimates this prospect to contain unrisked potential resources of approximately 50 million barrels. Once the East Okruzhnoye No. 1 well is complete, the East Okruzhnoye No. 2 well will be drilled and is expected to spud in January. Both these wells are being drilled with a BU-1600, a Russian rig, which has been improved through the addition of extra equipment enabling Petrosakh to complete the drilling of these wells ahead of time and under budget. On 1 November 2005, the Sakhalin Department of the Federal Services on Natural Reserves completed an audit of Petrosakh's compliance with the terms of the Pogranichny exploration license. The audit confirms that Petrosakh is in full compliance with the license terms. Once the two exploration wells have been drilled, Petrosakh will have fulfilled its work obligations under the terms of the existing exploration license. The Company is therefore confident of extending the term of the exploration licence and, in the event of a commercial discovery, converting to a production licence. Urals Energy had intended to commence drilling in the first quarter of 2006 on the Vitnitskaya prospect from a well site approximately 40 kilometres south of the Okruzhnoye field using the Deutag T-2000 rig. However, due to delays resulting from damage recently incurred by the barge hired to transport the rig, it will not be possible to move the rig from the mainland to Sakhalin Island and complete drilling prior to the start of the Spring thaw and potentially stranding the rig for a prolonged period and incurring significant additional cost. This delay, and consequent negotiations that are in progress regarding the Deutag rig, may require the Company to adjust its 2005 consolidated income statement for previously capitalised costs associated with the procurement and mobilisation of the rig. However, the Board is confident that it can secure a cost effective solution that will result in the Vitnitskaya Prospect being drilled within or under budget. For example, the Company is evaluating the use of a local Russian rig to drill the Vitnitskaya Prospect and would as a result not expect to incur any material incremental cash costs as a result of these developments. The Board is also confident that any delay in drilling the Vitnitskaya prospect will have no impact on either Petrosakh's license obligations being fully met or the merit of Petrosakh's application to extend the license term and, in the event of a discovery, conversion to a production license. A further update will be provided when appropriate. William R. Thomas, Chief Executive Officer, commented: "Urals Energy remains focused on fast, profitable growth through strategic acquisitions, success with the drill bit and production. The acquisition of OOO Dinyu is an example of this focus as it provides Urals Energy with immediate production increases and real exploration potential while also complementing our existing assets in the Komi region. We are also pleased that our exploration programme is overall ahead of schedule, despite the delaying of the T-2000 rig, and we are confident of further success on the Pogranichny Block." 15 November 2005 Pelham PR James Henderson 020 7743 6673 / 0777 4444 163 Gavin Davis 020 7743 6677 / 079 101 046 60 About the Company: 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 listed on AIM in August 2005. The Company 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 Company's five E&P subsidiaries have Proved and Probable reserves of 89.7 million barrels of oil equivalent (MMBOE) and produced approximately 5,600 barrels of oil per day (BOPD) during the first six months of 2005. The Company's two largest subsidiaries by reserves and production, Petrosakh and Arcticneft, own and operate refining assets with a total refining capacity of 5,300 BOPD, which provide the Company 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. This information is provided by RNS The company news service from the London Stock Exchange END MSCPKQKDFBDDADD
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