Urals Energy Public Company Limited Shareholder update (5474V)
April 18 2016 - 9:32AM
UK Regulatory
TIDMUEN
RNS Number : 5474V
Urals Energy Public Company Limited
18 April 2016
Press Release 18 April 2016
Urals Energy PCL
("Urals Energy", the "Company" or the "Group")
Shareholder update
Urals Energy PCL (AIM:UEN), the independent exploration and
production company with operations in Russia, is pleased to
announce the following update for its shareholders. In this update
the Board has sought to clarify a number of issues raised by
shareholders over the last few months.
Listing on AIM
The Board is aware that a number of companies with Russian
assets have recently proposed to cancel the listings of their
shares on markets such as AIM. Reasons given by these companies
have included: i) the large disparity between the current stock
market valuation of such companies compared with the value of their
assets on a traded Net Present Value basis; ii) the effect of this
valuation disparity on the ability of these companies to raise
addition equity and/or debt; and iii) the costs of maintaining a
listing.
The Board believes that the low valuations of listed companies
with Russian assets is a market phase that listed companies need to
live through. Russia is still the largest oil producer in the world
and has much scope for adding reserves and production. Our cash
operational costs in Russia are low (see below), and the importance
of the oil industry to Russia has been demonstrated by the
significant offset of recent oil price weakness by the exchange
rate for the Russian Rouble. Urals Energy is in the position of not
having a highly leveraged balance sheet which needs to be
refinanced in the short term.
The Company's financial position allows the Board to follow its
strategy of selective acquisitions in these difficult circumstances
and the Board believes that maintaining a share trading facility on
AIM is key to the Company executing its strategy. The Board has
recently taken steps to reduce the costs of the Company's listing
on AIM.
Cost savings
The Company's average cash cost per barrel at the well head (net
of taxes) has been US$8.40 per barrel over the nine months to
December 2015, compared with US$14.5 per barrel for the same period
in 2014. Some of these production cost reductions have been offset
recently by some Russian Rouble inflation and movements in exchange
rates. During the final months of 2015, the Russian Rouble
recovered some of its heavy falls against the US Dollar from
earlier in 2015. Other cost reductions have been achieved by: i)
delaying the start of new wells; and ii) reducing general
administration costs, including as noted above the costs of
maintaining the listing of the Company's shares on AIM.
Komineftegeofizika ("KNGF") update
As announced on 19 November 2015, the consideration the Company
paid for the acquisition of BVN Oil Limited ("BVN") included debt
owed by BVN to KNGF being offset against amounts owed by KNGF to
the Company as a result of the 2014 arbitration award. Following a
cash payment to Urals Energy, KNGF has fulfilled its obligations to
Urals Energy.
Update on Well 109
On 15 March 2016 Urals Energy announced an update on Well 109. A
workover is in hand on this well with the aim of slowing the
production of highly pressured water.
- Ends -
For further information, please contact:
Urals Energy Public Company
Limited
Andrew Shrager, Chairman Tel: +7 495 795 0300
Leonid Dyachenko, Interim Chief www.uralsenergy.com
Executive Officer
Allenby Capital Limited
Nominated Adviser and Broker
Nick Naylor / Alex Brearley / Liz Kirchner Tel: +44 (0) 20 3328 5656
www.allenbycapital.com
Media enquiries:
Abchurch
Philip Dennis / 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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