Exploration Well Drilling

7 December 2015

Volga Gas plc

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

EXPLORATION WELL DRILLING

Volga Gas plc, the oil and gas exploration and production group operating in the Volga Region of Russia, is pleased to announce that it is currently drilling an exploration well in its 100% owned Karpenskiy Licence Area in the Saratov Region of southern Russia.

The well is being drilled on the Yuzhno Mironovskaya prospect on a structure that is expected to be prospective for oil. Based on internal estimates, the target structure is considered to have the potential to contain up to 3 million tonnes (approximately 22 million barrels) of recoverable oil. As of 4 December 2015, the well had reached a total vertical depth of approximately 700 metres, with the main exploration targets at a depth of up to 1,000 metres, being zones in the Cretaceous post salt Albian and Aptian formations which are productive in the Company's nearby Uzen oilfield. Core samples are planned to be taken when the well has reached potential reservoir. Drilling operations are expected to be completed within two weeks.

Should this well result in an oil discovery, Management believes it is capable of being developed rapidly and producing oil within a short timeframe and in a similar manner to that currently used at the Company's producing Uzen oil field.

Results will be announced once drilling, coring and logging operations are complete.

Andrey Zozulya, Chief Executive of Volga Gas, commented:

"This exploration well is part of a strategy to build on the Company's potential oil resources and to diversify the sources of revenue and cash flow. While there is no current certainty of success, the cost of the drilling is modest and is funded from the Company's operating cash flow.

"Management's priority is, within the constraints of the existing environment, to maximise the potential of the Group's assets and to seek further opportunities to add shareholder value."

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Editors' notes:

Volga Gas is an independent oil and gas exploration and production company operating in the Volga region of Russia. The company has 100% interests in its four licence areas.

The information contained in this announcement has been reviewed and verified by Mr. Andrey Zozulya, Director and 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.