TIDMUEN

RNS Number : 4114V

Urals Energy Public Company Limited

28 October 2014

 
 Press Release   28 October 2014

Urals Energy PCL

("Urals Energy" or the "Company")

Completion of tanker loading

Update on Petraco loan

Urals Energy PCL (AIM:UEN), the independent exploration and production company with operations in Russia, is pleased to announce that the planned annual tanker shipment for export from Arcticneft on Kolguyev Island has been completed successfully. The tanker left Kolguyev Island on 23 October 2014 with 26,093 tons of crude (an equivalent of 207,940 barrels).

The sharp fall in Brent oil prices in October 2014 and the continuing depreciation of the Russian Rouble have resulted in lower netback for export sales of oil from Russia. The average Brent price in the second half of October 2014 (the period of Arcticneft shipment) reached its lowest level for the year at US$86 per bbl (second half of October 2013: US$107 per bbl.).

Whilst marketing and transportation expenses were in line with last year, the Company's export netback has also been affected by export duty being set by reference to oil prices in September 2014.

The combined effect of these factors has been an approximate 30% decrease in the netback received by the Company on its export sales.

Petrosakh is only selling in the domestic oil market for which netback prices for oil products have been stable during the first nine months of the current year. The Company expects a seasonal increase of the product prices in the Sakhalin market for the remainder of the year. The Board believes that this will secure the Company's operating cash flows at a level sufficient to maintain operating and investment activity in 2014.

As announced on 6 June 2014, the Company entered into a secured short-term loan agreement with Petraco Oil Company Limited ("Petraco"). The re-payment date for the US$3.9 million received from Petraco under this agreement, as well as for prepayment received from Petraco for export duty settlement in the amount of US$9.8 million, is linked to the shipment of this tanker. This indebtedness is anticipated to be settled before the end of 2014 at which point Petraco's collateral over Arcticneft will be released and the Company will be entirely debt free.

- Ends -

For further information, please contact:

 
 Urals Energy Public Company Limited 
 Alexei Maximov, Chief Executive       Tel: +7 495 795 0300 
  Officer 
 Sergey Uzornikov, Chief Financial      www.uralsenergy.com 
  Officer 
 
 
 Allenby Capital Limited 
  Nominated Adviser and Broker 
 Nick Naylor                       Tel: +44 (0) 20 3328 
                                                   5656 
 Alex Price                      www.allenbycapital.com

Media enquiries:

 
 Abchurch 
 Henry Harrison-Topham / 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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