Urals Energy has agreed to acquire a 35.3% interest in OOO Taas-Yuriakh Neftegazodobycha ("Taas") and has been granted an option to increase such interest to 39.5% in January 2009.

Taas is a privately-held Russian exploration and production company with oil development operations in East Siberia with licences to develop two adjacent blocks of the Srednebotuobinskoye oil, gas and condensate field in the region (the "SRB field"). The SRB field is essentially undeveloped. Taas holds (1) an oil production licence for the central block of the SRB field (the "Central Block"); and (2) a licence for geological prospecting, exploration and production of hydrocarbons in the adjacent Kurungsky allotment in East Siberia (the "Southern Block"). As part of the Acquisition, OOO Urals Energy, the Company's operating subsidiary in Russia, will become the operator for the development of the SRB field.

Urals Energy also has secured a committed, non-recourse US$500 million facility for the Acquisition (the "Acquisition Loan") and has secured, on behalf of Taas, an additional committed, non-recourse US$600 million facility for the development of the SRB field (the "Development Loan"), both from the Savings Bank of the Russian Federation ("Sberbank"), one of the largest banks in Central and Eastern Europe.

Unless otherwise explicitly stated, the financial and operating information, reserves estimates and production forecasts of the Company contained in this press release assume