23rd Apr 2015 07:41
LONDON (Alliance News) - Urals Energy PLC shares rose on Thursday morning after it released a statement ahead of the company's extraordinary general meeting claiming the company is currently undervalued.
Urals shares were trading up 25% to 3.45 pence per share on Thursday morning.
The company is holding an extraordinary general meeting in Cyprus on Thursday in order to seek shareholder approval for the company's financial statements for the year ended December 31, 2013, which could not be presented for approval at the annual general meeting of the company held in March.
Ahead of the meeting, the company said: "The board of Urals Energy believes that the company's current share price range does not fairly represent the value of the company."
The company believes it warrants a higher value after resolving litigation issues in Russia earlier this month. A court in Moscow rejected a second appeal by Komineftegeofizika OAO and revoked the suspension of enforcement procedures that had been in place against Ural's assets. Komineftegeofizika had filed a second appeal after losing a case in January over a USD500,000 loan payment owed to Urals.
In addition, the company said it has largely been compensated for the recent fall in oil price by the reduction in the rouble exchange rate, adding "the company is able to trade normally in the Russian economy".
Urals said the workover on the Articneft project has been successful and is proceeding on schedule, highlighting it has a "significant programme" to develop the asset. At the Petrosakh project, the company has resolved problems with the refinery whilst deviating the well 112, but said it will need to "proceed slowly to reduce the risk of further technical issues".
The company reiterated it expects to make its annual shipment from Articneft in August 2015, which would be two months ahead of schedule compared to last year, resulting in lower risk concerning the weather, something that has hampered operations in the past.
Urals is debt free, and said it continues to consider a number of potential acquisition opportunities.
"The board still believes that opportunities for suitable acquisitions will emerge in Russia, given the current market conditions; and the board remains confident that Urals Energy can continue to manage its business successfully and expand the company as opportunities allow," it said in a statement.
On Monday, the company denied online speculation that it had been approached about a possible takeover, calling it "unfounded".
Urals Energy said it will publish its 2014 results in May.
By Joshua Warner; [email protected]; @JoshAlliance
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