Petraco Payment Restructure and Operational Update

3 August 2011

Urals Energy Public Company Limited

("Urals Energy" or the "Company")

Petraco Payment Restructure, Drilling Update and Current Production

Urals Energy, the independent exploration and production company with operations in Russia, today announces that Petraco Oil Company Limited ("Petraco") has agreed to restructure the terms of the debt repayment agreement with Petraco, details of which were originally announced on 12 April 2010 (the "Agreement").

Petraco Payment Restructure

Petraco has agreed with Urals Energy to link the repayment of the $4 million tranche, due on 31 July 2011, to a shipment of the tanker from Arcticneft scheduled for late October 2011. The remaining repayment dates are unaltered and are as follows:

This amendment will enable Urals to maximise the efficiency of its next oil shipment by increasing its oil storage, and thereby ensuring that the tanker delivery is as full to capacity as possible.

Drilling Update

Drilling at well #51 has taken slightly longer than originally anticipated: the actual drilling has progressed according to schedule and has reached a depth of 1,650 metres. Before running the production string, the drilling crew started elaboration of the borehole. While working through the borehole at the depth of 1,460, intensive shedding of breeds was discovered and, as such, the crew has installed two cement plugs at the depth of 1,485 to 1,470 meters and 1,470 to 1,450 meters. Subsequently, whilst working through these cement plugs at the depth of 1,471 meters, circulation seized and the drill became stuck. Currently the crew is working to free the drill and recommence drilling through the cement plug and elaborating through the well to run the production string.

Based on current progress, the management anticipates that flow rates will be known over the coming weeks and further announcements will be made at the appropriate time.

Drilling of well #41 will commence once well #51 has been completed.

Current Production

Current production at both Petrosakh and Articneft is 1,437 BOPD and 711 BOPD respectively.

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