Karpenskiy Licence Area: new supra salt prospect

29 April 2010

VOLGA GAS PLC

Karpenskiy Licence Area: new supra salt prospect

Volga Gas Plc ("Volga Gas" or the "Company"), the oil and gas exploration and production group operating in the Volga Region of European Russia, is pleased to announce that the State Committee for Resources has approved new C3 prospective resource estimates for a new supra-salt prospect in the Company's Karpenskiy Licence Area ("KLA"). The new resources add approximately 153 million barrels ("mmbbl") of recoverable oil and 204 billion cubic feet ("bcf") of recoverable gas to the Company's Russian C3 resources - in total approximately 187 million barrels of oil equivalent.

On 27 April 2010, the Company received notification that a well passport has been approved for a new exploration well, called Novaya, within the Yuzhny Mokrousovskoye prospect area in the Northern part of the KLA. The location is approximately 30 km due west of the Yuzhny Ershovskoye prospect on which the Company is operating the sub salt Grafovskaya #1 exploration well.

The C3 prospective resources in Novaya comprise four separate horizons of Cretaceous and Jurassic age which contain cumulatively unrisked resources of 21 million tonnes (153 mmbbl) of recoverable oil plus 1.7 billion cubic metres (59 bcf) of associated gas. These resources are within a depth of 1,000 metres.

At a deeper zone of approximately 2,000 metres depth, there is a further horizon with identified gas and condensate potential estimated to contain unrisked resources of 4.1 billion cubic metres (145 bcf).

Volga Gas has commenced the process of planning for an exploration well to test these potential resources although it is likely that the actual drilling operations are expected to form part of the 2011 work programme. An exploration well to test the full set of C3 resources announced today is estimated to cost approximately $2 million.

Mikhail Ivanov, Chief Executive of Volga Gas commented:

"We are delighted to have established a further meaningful exploration target within the KLA which can be tested at low cost. This additional prospectivity came to light as a result of new 3-D seismic data acquired during 2008 over the Yuzhny Mokrousovskoye area."

For additional information please contact:

Editors' notes:

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

The information contained in this announcement has been reviewed and verified by Mr. Mikhail Ivanov, 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 March 2006. Mr. Mikhail Ivanov holds a M.S. Degree in Geophysics from Novosibirsk State University. He also has an MBA degree from Kellogg School of Management (Northwestern University). He is a member of the Society of Petroleum Engineers.

Ends