UEN Urals EN.

RNS Number:9523U
Urals Energy Public Company Limited
01 December 2005


1 December 2005

                      Urals Energy Public Company Limited

                               Operational Update


Urals Energy is a leading independent exploration and production company with
operations in Russia.  The Company listed its shares on the London Alternative
Investment Market in August 2005, raising $131.1 million. On 15 November 2005
Urals Energy announced the completion of the US$70 million acquisition of OOO
Dinyu in the Komi region of Russia.

Urals Energy Public Company Limited ("Urals Energy" or the "Company") today
announces an operational update:

  * Encouraging drilling to date of the East Okruzhnoye No.1 well, with the
    well now reaching a measured depth of 1,725 metres and on track to reach the
    target formation measured depth of 1,854 metres within two weeks
  * Record production of 8,900 bopd, an increase of 60% within the last two
    months, driven both by acquisition and organically through development
    drilling at Petrosakh
  * Petrosakh development drilling has added c.1,000 bopd
  * Following successful execution of Company strategy to date, initial IPO
    production estimates of reaching 10,500 bopd by the end of 2007 have
    increased to estimated production of 14,000 bopd by end of 2007
  * Acquisition of remaining 35% share of South Michau field not owned by
    Urals at a cost of $200,000. giving Urals 100% ownership of the field
  * Application  for a five year extension for the Pogranichny Exploration
    License has been submitted
  * Completion of two successful workover wells in the Okruzhnoye Field at
    Sakhalin Island

William R. Thomas, Chief Executive Officer, commented:

"We are delighted with the significant progress we have made on production to
date. This growth has been driven both organically and by acquisition. With
aggressive development drilling planned for 2006 we are confident of meeting our
revised production targets.

Our strategy of building a material exploration and production business through
exploitation and acquisition is on track."

                                                                 1 December 2005


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




Exploration Programme

The East Okruzhnoye No.1 well spudded on November 1 and is testing the East
fault block of the East Okruzhnoye prospect in the Pogranichny license area
offshore Sakhalin Island.  The well is drilling to plan and has now reached a
measured depth of 1,725 metres.  This well is ahead of schedule and is currently
expected to reach the target formation, the Pileng horizon, measured depth of
1,854 metres, within the next two weeks.  Depending on results, the Pileng
horizon will be cored in four intervals of five meters each, and then open hole
logs will be run and production casing set.  In the event a productive Pileng
horizon is encountered, the completion and initial testing program is
anticipated to last several weeks from setting casing.

DeGolyer and MacNaughton estimates this east fault block of the East Okruzhnoye
prospect to contain unrisked potential resources of approximately 25 million
barrels.

On 28 November 2005, Urals Energy submitted an application to the Sakhalin
Department of the Federal Services for a five year extension of the Pogranichny
Exploration License currently held by ZAO Petrosakh. The Company intends to
reprocess 355 kilometres of 3D seismic and drill a further three exploration
wells within the license period. A successful application would give Urals
Energy the flexibility to convert its licence to a production licence in the
event of successful exploration results over the next five years.


Production

Following successful development drilling at Petrosakh, which has boosted
production by a further 1,000 bopd, and the recent completion of the OOO Dinyu
acquisition, total  production has risen to a record 8,900 bopd.  This compares
with 5,582 bopd at the time of the Company's interim results on 23 September
2005, which represents an increase of 60% within the last two months.

At the time of the Company's listing in August 2005, the Company announced the
intention to grow production to c.10,500 bopd by the end of 2007.  Successful
execution of the Group's strategy has resulted in current production increasing
to a level close to the Group's initial IPO target. The Company has reviewed its
forward production estimates and is currently targeting total Company production
of 14,000 bopd by the end of 2007. This growth will be principally driven by
Urals Energy's  planned development drilling programme at Petrosakh, Dinyu,
Arcticneft and Chepetskoye.


Development Drilling

Urals Energy announced on 21 October 2005 a 14 well development drilling
programme at its Russian subsidiary Petrosakh in the Okruzhnoye Field at
Sakhalin Island targeted at increasing production to c. 5,800 bopd.  Two
successful development wells, which tested at a stabilised rate of approximately
360 bopd and 660 bopd respectively, and a further two workover wells have been
successfully completed.

Drilling of a further 12 development wells on this field is scheduled to
commence in the second quarter of 2006.


OOO Dinyu

Following completion of the acquisition of OOO Dinyu which gave Urals Energy two
licences, the Dinyu-Savinbor Field (100% ownership) and the South Michau Field
(65% ownership), Urals Energy has subsequently acquired the remaining 35% of the
South Michau Field not owned by Dinyu.  The agreed price for this remaining
ownership interest in South Michau is $200,000; giving Urals Energy 100%
ownership of the Field on attractive terms.  Total control of this license
allows Urals shareholders to benefit from the full upside that may result from
the Company's planned aggressive appraisal and development programme on the
South Michau Field.


                      This information is provided by RNS
            The company news service from the London Stock Exchange
END

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