Payment to Petraco, arbitration and survey update

Urals Energy Public Company Limited

("Urals Energy" or the "Company")

7 December 2012

Payment to Petraco, arbitration update and survey update

Urals Energy is pleased to announce that it has paid the final loan principal amount of US$7,315,886.00 to Petraco Oil Company Limited ("Petraco"). The payment was made immediately after the receipt of funds for the November shipment of the tanker from Arcticneft, further details of which were announced on 7 November 2012, in accordance with the terms of the restructuring agreement entered into with Petraco in April 2010 (i.e. within 30 days of the Bill of Lading). The only sums that remain outstanding to Petraco relate to interest and are approximately US$3.0m. This remaining interest payment is to be made before the end of 2013.

Arbitration update

Urals Energy is also pleased to announce that the arbitrator in the ongoing arbitration against Vyatcheslav Rovneiko has issued a fourth Partial Final Award on the issue of interest, which determines that the amount due by Mr Rovneiko to Urals Energy as at 22 November 2012 is US$6,259,367.97 (inclusive of interest). The arbitrator has ordered that Mr Rovneiko pay that sum to Urals Energy together with penalty interest, which accrues at the rate of US$2,319.09 per day until repayment has been made in full. The Company has formally demanded payment from Mr Rovneiko and is committed to use all appropriate means to collect the outstanding amounts.

Survey update

The Company has entered into a contract to carry out a passive seismic study for the identification of potential hydrocarbon pools with Geodynamics Worldwide Srl, which applies a patented technology for the detection and determination of resonance energies generated uniquely by hydrocarbons. The technology will be initially utilized at Kolguyev Island, Arcticneft, with the aim of increasing the efficiency of drilling via detailed interpretation of hydrocarbons within a specific area. The results are expected to be finalised by Summer 2013.

Commenting on today's release, CEO Alexei Maximov said:

"We are extremely happy with the results of the last two months: the successful shipment and sale of the tanker to Petraco, and subsequent payment of the last portion of the debt amount. We thank Petraco for its ongoing support and look forward to future cooperation.

We are also satisfied with the results of the arbitration against our former director, Vyatcheslav Rovneiko, which has confirmed the Company's legal rights and vindicated our position that this sum must be repaid to the Company.

With these two final legacy issues behind us, the Company is well-equipped for a new evolutionary turn based on a strong balance sheet, cleared reputation, and focus on increasing operational efficiency in 2013 and beyond. The passive seismic study is the first part of this."

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