Urals Energy, a leading independent exploration and production company with operations in Russia, provides an update on the development of the Company’s Dulisma field, East Siberia.

Highlights

• Successfully completed appraisal of well #105 with higher than expected flow results

• Second new drilling rig delivered to the field on schedule

• Completed preparatory work for the Central Processing Facility and began tie-in pipeline construction

• On track to commence exporting to the East Siberia to Pacific Ocean pipeline ("ESPO") by Q2 2009

Drilling Operations

As part of the ongoing field development plan, the Company has completed the drill stem test of the vertical pilot hole of appraisal well #105. Following positive flow results, well logging is being conducted to thoroughly appraise the reservoir prior to drilling the planned horizontal well. Final completion of well #105 and hook up to production is expected by the beginning of June. Until such time as the Dulisma field is hooked up to ESPO, production from the field will be evacuated by a temporary pipeline and trucks.

Rig Delivery and Field Construction

Earlier this month, Urals took delivery of its second newly built rig from China. This was done on schedule and now allows the Company to begin production drilling with 2 rigs for the remainder of the year. A further two rigs are planned to be mobilized for next winter.

Significant progress has also been made with construction of the field facilities. Preparatory work for the Central Processing Facilities has been completed and piling for key equipment and buildings is now underway. Right of Way clearance and preparation for the pipeline connection to Transneft’s ESPO system is approximately half complete and all the required linepipe has been stockpiled at each end (Dulisma field and Nadezhdinsk ESPO tie-in point), as well as at an interim station at the river Tunguska. At present, 14 km of line has been welded from the Dulisma end and double jointing operations have commenced at Nadezhdinsk.

Overall, the Company has spent about $32 million of its own money to finance Dulisma development in 2008 to date. Following the announcement of well #105’s drill stem test, the remaining $140 million tranche of the Sberbank Dulisma development loan will now become available for drawdown, in several installments against an agreed schedule for development of the field.

Design work on the remaining facilities, including the Central Transfer Facility at the ESPO connection, is being finalized and tendering for construction will take place in May with mobilization planned for early Q3 when weather conditions are more suitable.

The Company remains on track to begin exporting oil in early Q2 2009 into the ESPO system which reportedly is now being partially filled from Taishet and is planned to receive line fill from the Talakan field later this year.