Secondary Recommendation

Urals Energy - New Russian oil e&p firm with good growth prospects

September 2005

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

Urals Energy, an oil exploration & production company with assets in Russia, is an intriguing new issue which was introduced to AIM by heavyweight broker Morgan Stanley at 240p a share. Market cap. at the placing price is £198m. The placing raised US$104m (£58m), of which US$43m will be used to pay off debts and deferred acquisition payments, with the balance used to fund the ongoing development and exploration program. Since it was founded in November 2003, Urals Energy has been quickly built up by the acquisition of five subsidiaries and it now owns 90m barrels of proven and probable reserves, while average production, on a pro forma basis, is currently 5,600 barrels of oil per day (bopd). Urals Energy’s ...

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With small companies there is an above average degree of risk compared to buying blue chips. Please be aware that we have not assessed the suitability of any of these investments for you. The newsletter simply states a personal view and diarises the editor’s investment decisions. Please speak to your stockbroker or other qualified individual to ascertain whether any of these companies mentioned would form useful additions to your own portfolios. Past performance is no indication of future success.

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