AIM listed Urals Energy, a leading independent exploration and production company with operations in Russia, announces the completion of its $148 million acquisition of 100% of the Dulisminskoye oil, condensate and gas field together with 100% of the LTK transportation and treating facilities, both located in southern East Siberia.

The acquisition was announced on 18 April 2006, with the subsequent closing of a $209 million private placement to finance the acquisition completed on 2 June 2006.

This acquisition significantly increases both reserves and production and creates a new core area for the Company in the prolific East Siberian oil basin. DeGolyer and MacNaughton estimate the Dulisminskoye Field contains:
 

• net 2P (proved plus probable) reserve additions of 109.4 million barrels of oil and condensate and;
• net 3P (proved, probable and possible) reserve additions of 196.3 million barrels of oil and condensate and 1.7 trillion cubic feet of gas

Oil production is projected to peak in 2011 when the field is expected to produce at an average annual rate of approximately 29,000 BOPD.

William R. Thomas, Chief Executive Officer, commented:
“Completion of this acquisition and the success of our capital raising are yet further examples of the progress Urals Energy is making this year. We are on track to reach our production target of 13,000 bopd by the end of 2006 and 19,000 bopd by end of next year – an 80% increase in our initial 2007 production target stated at the time of the IPO in August 2005.”