PRODUCTION REPORT FOR SEPTEMBER 2017

4 October 2017

Volga Gas plc

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

PRODUCTION REPORT FOR SEPTEMBER 2017

Volga Gas plc, the oil and gas exploration and production group operating in the Volga Region of Russia, is pleased to announce its average production volumes for September 2017.

In September 2017, average gas processing capacity utilisation increased by 23% compared to August 2017 while test production continued using the new Redox gas sweetening process. During September 2017, the Dobrinskoye gas plant performed well, achieving a peak gas production level of 19.2 mmcfd, exclusively using the Redox based gas sweetening process.

In the coming months, implementation of the new process will continue with gradual increases in production. During this period it is expected that the average daily production of gas and condensate would be in the region of 3,600 boepd resulting in Group production of approximately 4,300 boe per day, excluding additional potential production from the Uzen well #101 and incremental volumes from the LPG project which is under construction. 

The average production in September 2017 was 3,409 barrels of oil equivalent per day (24% higher than August 2017).

Average production comprised:

Production data is based on preliminary monthly production reports prepared for the purposes of submissions to tax authorities for Mineral Extraction Tax purposes. The gas production number for August 2017 has been revised upwards from 9.0 mmcf/d, as stated in the Production Statement issued on 4 September 2017, to 9.3 mmcf/d, in line with the final official submissions. Oil and condensate volumes are unchanged. The total production number for August 2017 is consequently revised from 2,698 to 2,757 boepd.

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 metres (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. 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