URALS ENERGY - Leading independent oil company in Russia - 500 Beiträge pro Seite

[Mr.Arbogast]

Urals Energy Public Company Limited 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 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.

[Mr.Arbogast]

Investment Strategy

Urals Energy views its unique strength in the Russian market to be its combination of Russian and Western management. The Company is able to source opportunities and negotiate their purchase using its Russian contacts and expertise. Underpinning this chain from identifying a prospect and acquiring it is a base of Western industry technical, financial and legal practice.

The Company actively reviews acquisition opportunities both for existing production companies and licenses. A dedicated business development team, in coordination with the technical staff, analyze prospective properties through an analysis of reserves and production attributes which are fed into traditional discounted cash flow models. Industry standard practices utilizing conservative crude and product price decks and required minimum discount “hurdle rates” which reflect both the Company’s cost of capital and the perceived risk of each case are utilized. Over the last two years, the Company has reviewed over 60 of such possible acquisitions.

The Company's key acquisition criteria are:

100% ownership, or as close to that level as possible, but in no event less then 75% plus one share.
Full management and operational control.
An absence of control or major influence by a locally dominant Russian major.
Existing production where possible.
Scope to increase existing production through enhanced development.
Ability to export more then the standard 35% Transneft allotment if possible.
Some unique means of accessing the downstream market through, for example, refining.
Once an acquisition opportunity is selected, the Company performs standard full-spectrum Western due diligence. On the technical level it includes in-house analysis of all data, as well as frequently the outsourcing of independent engineering and geologist assessment. Full legal and accounting due diligence is also performed, and often the further assistance of a transaction services group from one of the big four accounting firms will be used. Where necessary, the Company also often uses the services of a fixed-asset appraisal firm.

Following completion, the Company immediately restructures the acquired entity, shifting full management control to Urals Energy LLC by re-registering the Moscow management company as the new entity’s General Director. All signing authority, bank accounts and crude sales authority are immediately assumed by the Company.