EXPLORATION DRILLING UPDATE

6 October 2020

Volga Gas plc

("Volga Gas", the "Company" or the "Group")

EXPLORATION DRILLING UPDATE

POTENTIALLY SIGNIFICANT OIL DISCOVERY

Volga Gas plc, the oil and gas exploration and production group operating in the Volga Region of Russia, is pleased to announce a potentially significant discovery of a new oil field in its ongoing exploration drilling programme.

As announced on 14 August 2020 and in the Interim Report released on 30 September 2020, the Group is undertaking a programme of drilling six slim hole exploration wells within its Karpenskiy Licence Area in structures separate from its existing oil reserves in the Uzen field.

As announced in the Interim Report, a well in the North Uzen structure established the presence of oil in a Triassic aged sandstone formation. This will be subject to flow testing after undertaking a fracture stimulation operation which management considers necessary as the oil pay is inferred to be of low permeability.

More significantly, drilling on the Novo Kurilovskiy prospect reached a depth of approximately1,200 metres. While the initial target interval, the cretaceous Aptian formation at a depth of 900-1,000 metres, had no shows of hydrocarbons, in the deeper Jurassic interval between 1,144 and1,218 metres a total of 60 metres of oil bearing pay was identified with cores taken during drilling. Since the potential pay thickness is in excess of the calculated depth of the structural closure from seismic mapping, this indicates a potential stratigraphic element to the prospect, with implications of significant upside in terms of gross oil in place.

The commercial significance of this discovery will depend on the characteristics of the reservoir which are still unknown.

The immediate plan is to complete drilling down to Permian salt layer, open-hole logging and casing, which could take 10-14 days. On completion of the drilling phase, a workover rig will be moved onto location to proceed with cased hole logging, perforations and testing. This could take additional 10-20 days, depending on the number of intervals selected for testing.

Prior to drilling, management had assessed unrisked potential recoverable oil in the Novo Kurilovskiy prospect at approximately 8 million barrels of prospective resources. The thickness of the pay logged to date and the possibility of a stratigraphic element to the prospect suggests that this could be a significantly larger size. However, commercial viability of the discovery depends on cased hole testing and it will require additional wells and new seismic will be necessary to give a level of confidence to calculate reserves in accordance with SPE standards.

Further announcements will be made as results become available. The 2020 exploration drilling programme on the other four exploration targets in Karpenskiy Licence Area continues in addition to the appraisal and evaluation of the prospects already drilled.

Cautionary note regarding resource estimate

The potential indicative management resource estimates described in this release are conceptual in nature and are based on mapping and interpretation of seismic data carried out by the Group's in house geological and technical departments. There has been no independent determination of a resource to SPE standards and the Company cautions that there is a risk further exploration will not result in the delineation of a resource or reserve. The data should therefore not be relied upon until the Company can confirm such estimate to a Standard.

Market Abuse Regulation (MAR) Disclosure

Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement.

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Notes

The information contained in this announcement has been reviewed and verified by Mr. Andrey Zozulya, Chief Executive Officer of Volga Gas plc, for the purposes of the Guidance Note for Mining, Oil and Gas companies issued by the London Stock Exchange in June 2009. Mr. Andrey Zozulya holds a degree in Geophysics and Engineering from the Groznensky Oil & Gas Institute and is a member of the Society of Petroleum Engineers.

The Company records production in metric tonnes (for oil and condensate) and in cubic meters (for gas). Conversions from metric to standard oil field units are used for illustrative purposes only and are based on the Company's estimate of the applicable ratios. The ratios used are 7.833 barrels per tonne for oil and 8.75 barrels per tonne for condensate and 11.735 barrels per tonne for LPG. Gas volumes are translated using 35.3 cubic feet per cubic meter and 6,000 cubic feet per barrel of oil equivalent.

Glossary

bpd Barrels per day

boepd Barrels of oil equivalent per day

mmcfd Millions of standard cubic feet per day