Urals Energy Public Company Limited Acquisition of RK-Oil Limited and BVN Oil Limited (3051G)
November 19 2015 - 6:00AM
UK Regulatory
TIDMUEN
RNS Number : 3051G
Urals Energy Public Company Limited
19 November 2015
Press Release 19 November 2015
Urals Energy PCL
("Urals Energy" or the "Company")
Acquisition of RK-Oil Limited and BVN Oil Limited
Urals Energy PCL (AIM:UEN), the independent exploration and
production company with operations in Russia, is pleased to
announce the acquisition of the entire issued share capital of two
private Russian companies, RK-Oil Limited ("RK") and BVN Oil
Limited ("BVN"), from Mr Ilya Glebov. These companies were formed
in 2014 in order to participate in public auctions for oil
exploration and production licenses in Russia's Komi region.
Following these auctions both RK and BVN hold licenses in the Komi
region.
Andrew Shrager, Chairman commented: "The Board is delighted with
the acquisition of both RK and BVN. These acquisitions fit into our
strategy of acquiring licenses for exploration selectively at times
of low oil prices and undertaking initial exploration, but waiting
until conditions improve before further developing such assets.
They will add to the Company's potential pipeline through the
ability to develop a further total area of over 947 sq km in the
Komi region, an area where the Urals Energy team have considerable
expertise. These are the first steps in rebuilding the asset base
of Urals Energy."
BVN holds an exploration license for the Babayevsky area which
is valid until 2018. The license covers a total area of 502 sq km
and is located 12 km from the nearest oil terminal. One exploratory
well was drilled in 2015, leading to a commercial discovery with a
tested flow rate of 60 barrels of oil per day over a period of 18
hours from within deposits of the Devonian period. The license
presently has indicated oil reserves of 2.02 million tons C1 and C2
(equivalent to 14.9 million barrels) and possible recoverable
resources (D1) of 1.256 million tonnes, (equivalent to 9.29 million
barrels), both of which have been approved by the State Reserves
Committee. The formal procedures for the execution of the Protocol
of the State Reserves Committee to effect the transfers of the
license are currently under way. Over the coming months, the
Company will undertake further studies and prepare a development
plan as part of its application for a 25 year development license.
Apart from the exploration license BVN holds no other assets.
RK holds an exploration and production license for the Ordymsky
area, which is valid until 2040. The license covers a total area of
445 sq km, and is located 7 km from the nearest oil terminal. The
license was held by LUKOil from 1995 until it was relinquished in
2000. LUKOil drilled one exploratory well which flowed, but no
further studies were undertaken. RK has State registered possible
recoverable resources (D1) of 3.385 million tonnes (equivalent to
25.05 million barrels). Apart from the exploration and production
license RK holds no other assets.
These reserves and resource figures stated above have not been
reviewed in accordance with the AIM Guidance Note for Mining, Oil
and Gas Companies and the Company plans to get a review of these
new licenses undertaken, in addition to the recent extension of the
license area at Arcticneft and the Company's other assets, in
accordance with an appropriate Standard in an updated Competent
Person's report to be undertaken next year.
Dr Svyatoslav Bilibin, (Dr.Sci.Tech. and Corresponding Member of
the Russian Academy of Natural Sciences), an independent adviser to
Urals Energy, who meets the criteria of a qualified person under
the AIM Guidance Note for Mining, Oil and Gas Companies, has
reviewed and approved the technical information contained within
this announcement.
The two license areas are some 100 km apart, so will be managed
together. The Board believes that it will be possible for
facilities to be shared, once a full development plan is
undertaken.
The total consideration for the acquisitions is US$ 5.275
million, of which US$ 2.7 million is to be settled in cash and US$
2.525 million is to be satisfied by the assumption of debt and
other liabilities. The acquisitions are being funded out of Urals
Energy's cash resources and the new working capital facility from
Sberbank, details of which were announced on 30 June 2015.
In the case of BVN, there is a debt of Russian Rubles 19 million
(approximately US$ 290,000) owed to Komineftegeofizika ("KNGF").
This is to be offset against the money owed to Urals Energy by KNGF
as a result of the arbitration from last year. KNGF has paid a
balancing amount to Urals Energy in cash and has therefore now
fulfilled its obligations to Urals Energy in full.
Neither RK nor BVN have traded and as a result have generated no
revenues. The unaudited net losses of both companies for the period
from 1 January 2015 to 15 November 2015 totalled approximately US$
23,500. The unaudited net assets of both companies as at 15
November 2015 were approximately US$ 287,000. The estimated actual
expenditures to date by RK and BVN on acquiring the licenses,
undertaking studies and drilling the well have totalled US$ 3.2
million.
These acquisitions bring Urals Energy back to the Komi region
where its team has considerable experience. Urals Energy has been
providing geological assistance to RK and BVN over the last year,
thus giving the Urals Energy Board the confidence to make these
acquisitions.
- Ends -
For further information, please contact:
Urals Energy Public Company
Limited
Andrew Shrager, Chairman Tel: +7 495 795
0300
Leonid Dyachenko, Interim www.uralsenergy.com
Chief Executive Officer
Allenby Capital Limited
Nominated Adviser and Broker
Nick Naylor / Alex Brearley Tel: +44 (0) 20
3328 5656
www.allenbycapital.com
Media enquiries:
Abchurch
Philip Denis / Quincy Allan Tel: +44 (0) 20
7398 7710
quincy.allan@abchurch-group.com www.abchurch-group.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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