Acquisition of Gazprom Global Energy Solutions

Energy Assets Group plc

("Energy Assets" or the "Group")

Acquisition of Gazprom Global Energy Solutions Limited

Energy Assets, the largest independent provider of gas metering services to the UK Industrial and Commercial ("I&C") market1, is delighted to announce that it has reached agreement with Gazprom Marketing & Trading Ltd to acquire its wholly owned subsidiary, Gazprom Global Energy Solutions Limited ("GGES") for an enterprise value of £13.5m, which includes an initial cash consideration of £6.0m, potential cash earn-out payment of £3.0m (payable dependent upon the level of data logger installations carried out by Energy Assets) and existing GGES debt of £4.5m that is to be refinanced upon acquisition.

Based in Manchester, GGES is part of the Gazprom group, one of the world's largest energy companies, and provides fully integrated Metering, Automated Meter Reading ("AMR") and Siteworks services to gas suppliers and blue-chip clients across the I&C sector. GGES manages a portfolio of approximately c.27,000 data points across gas, water and electricity sectors. When combined with Energy Assets' existing portfolio of c.21,000 data loggers2, the resulting logger portfolio will be one of the most significant in the UK I&C market.

Completion of the GGES acquisition will significantly enhance each of the Energy Assets business divisions, providing additional scale and expertise to the Group whilst formalising the metering and technical services' relationship built with Gazprom Energy over time. The acquisition brings with it GGES's AMR technology for both gas and water applications, low power radio data collection technology and a range of products and IP. Gazprom will retain the rights to use the IP in the AMR technology in Russia, Germany and the FSU countries.

The acquisition of GGES also includes a Meter Asset Management (MAM) agreement that will see Energy Assets appointed as the primary Meter Asset Manager for Gazprom Energy's UK portfolio. Furthermore, the deal provides Energy Assets with an exclusivity period during which it will install new metering assets and undertake meter exchanges across Gazprom Energy's existing and new UK portfolio as it seeks delivery of its advanced metering strategy in line with the Department of Environment and Climate Change ("DECC") proposals and its customers' energy management needs.

Energy Assets currently manages a portfolio of c.53,000 meters2 in the I&C sector, and as such, completion of this metering programme has the potential to more than double the current Energy Assets portfolio. This will further cement the Group's position as the largest independent provider of metering services to the UK I&C market.

In addition to the metering agreement, the acquisition provides for Gazprom Energy and Energy Assets to work in partnership to provide both AMR and Siteworks through a separate, exclusive, AMR and Siteworks agreement.

Transaction consideration will be funded from the £11.7m of net proceeds raised from the Group's flotation on the London Stock Exchange in March this year, in line with the stated IPO strategy of pursuing attractive opportunities such as this large-scale meter installation programme.

For the year to 31 December 2011, GGES generated revenues of £5.1m and profit before tax of £0.2m, which is reported after the deduction of intra-group charges. The directors believe that combining the resources of both businesses will further enhance earnings expectations for financial year 2013/14 onwards.

At that date GGES had gross assets of £6.5m.

1 By number of meters owned and managed as at 30 June 2012 trading update.

2 As at 30 June 2012 trading update.

Phil Bellamy-Lee, Chief Executive of Energy Assets, commented:

"I am delighted to announce the acquisition of Gazprom Global Energy Solutions from Gazprom Marketing & Trading Ltd, one of the fastest growing energy companies in Europe. This transaction provides Energy Assets with a fantastic opportunity to continue the development of the long standing relationship between the two companies and is a significant step in the delivery of Energy Assets' strategy to increase meter asset management and ownership as set out at the time of the IPO.

These agreements provide the Group with the opportunity to continue our growth profile and further enhance our market position as the leading independent provider of metering services to UK I&C gas customers. In addition, it will double our data logger portfolio and deliver a siteworks service to a growing gas supplier base. GGES is a leading developer of AMR technology and the acquisition provides Energy Assets with a proven technology platform and a range of products with the potential to be deployed within the wider utilities markets.

We are therefore particularly pleased that Energy Assets will be a key partner with Gazprom Energy in delivering strong customer service to its customers and stakeholders. Energy Assets' proven, client focused, systemised approach has enabled Gazprom and Energy Assets to conclude this transaction, fully confident of delivery. We look forward to building on our long term relationship and delivering value to both businesses."

Vitaly Vasiliev, CEO of Gazprom Marketing & Trading Ltd commented:

"We have worked with Energy Assets for some years in a strategic partnership. Gazprom Energy is a customer-focussed business that prides itself in offering customers an excellent experience. We know from experience that Energy Assets offers our customers great service and will continue to do so. This deal offers those customers an ongoing commitment to excellence and allows both our businesses to concentrate on activities that are key to our core plans for growth."

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Notes to Editors:

About Energy Assets 

Energy Assets provides gas metering and related services in the I&C segment of the UK gas market and is the largest independent provider of I&C gas metering services in the UK (by number of meters owned and managed). The Group offers gas suppliers and end-user consumers of gas a broad spectrum of metering services, from the provision and management of new and replacement meters through its MAM Services division to the procurement and project management of related gas infrastructure works and the collection and provision of gas consumption data through the Group's Siteworks and AMR Services divisions.

As at 30 June 2012, Energy Assets' metering portfolio consisted of 68,0003 owned and managed meter assets, and more than 21,000 data loggers. Energy Assets bespoke, highly scalable and fully digitalised internal systems in place, which provide management with confidence that it can utilise its operating leverage to deliver a long term benefit to Group earnings as a result of the acquisition.

For further information, please visit: www.energyassets.co.uk

About Gazprom Energy

Gazprom Energy is the brand name for Gazprom Marketing & Trading Retail Limited which is a 100% owned subsidiary of London-based Gazprom Marketing & Trading Limited (GM&T). After entering the energy retail market in 2006, Gazprom Energy became the first Gazprom brand outside Russia to sell energy to end users. Since then the company has increased the volume of its gas sales in the UK by more than 500%. Gazprom Energy currently supplies over 11,000 business customers at 44,000 sites across Europe with flexible energy solutions that are designed to meet individual business needs. Customers include Heinz, David Lloyd Leisure Group, the University of Oxford and Chelsea Football Club. Gazprom Energy has an additional 65,000 residential customers in Germany and provides smart metering services to its customers across Europe. Gazprom Energy also offers carbon trading services for companies in the EU Emissions Trading Scheme and power purchase agreements to independent generators.

For further information, please visit: www.gazprom-energy.com

About Gazprom Marketing & Trading

Gazprom Marketing & Trading Limited (GM&T) is a UK-registered wholly-owned subsidiary of the Gazprom group, the world's largest gas company by asset base, accounting for 18% of the world's total natural gas reserves and for about 70% of natural gas reserves in Russia. GM&T is headquartered in London and was established in 1999 to manage Gazprom's marketing and trading activities in the liberalised markets of Europe.

Today, GM&T is responsible for the optimisation of Gazprom's energy commodity assets and downstream expansion through its marketing and trading network. With subsidiaries in Houston, Singapore, Paris, Berlin and Manchester, GM&T trades energy commodities including gas, power, oil and oil products, carbon, LNG and FX. GM&T has been trading financial oil products on a number of exchanges since 2006 and can now offer 24-hour coverage of the market between Singapore, London and Houston.

For further information, please visit: www.gazprom-mt.com

3 Meter portfolio is made up of c.53,000 Industrial and Commercial sized meters and c.15,000 Domestic sized meters.