Urals Energy Makes Management Appointments

William S. Hayes has been appointed Senior Vice President and General Counsel. Mr Hayes will act as chief legal officer of the Company and is responsible for all Group legal activities.

Mr. Hayes has over 25 years experience as an international energy lawyer with Andrews & Kurth, British Gas, Vanco Energy Company and Cardinal Resources plc. He is a graduate of the University of Texas at Austin (B.J.) and St. Mary's University School of Law (J.D.).

Maxim V. Bezriadin has been appointed Vice President and Business Unit Manager, East Siberia where he will be responsible for Urals Energy's activities in East Siberia. This is a new core area for Urals Energy and includes the important Dulisminskoye oil, gas and condensate field.

Mr. Bezriadin, a native of Irkutsk, was most recently Chief Executive of OJSC Verkhnochonskneftegaz, a company jointly owned by Rosneft and TNK-BP. Mr. Bezriadin previously worked for British Petroleum in Russia. He is a graduate of the University of Maryland (B.S. Business), Irkutsk State University (M.S. International Economics) and Ural State Economic University (Ph.D. in Economics).

Stephen D. Kirton has been appointed Vice President, Technical Services. Mr. Kirton is responsible for managing Urals Energy's subsurface technical analysis including geology, geophysics, reservoir engineering and reserves reporting. He will also be responsible for license compliance.

Mr. Kirton has over 25 years experience as both a geologist and production engineer and has specialized in Russian and FSU oil exploration and production since 1991. He has served with Gulf Canada, KomiArctic Oil, Harvest Natural Resources and Lundin Petroleum. He is a graduate of the University of Waterloo (B.S. Earth Science).

Commencement of Initial Fracture Stimulation Program

Urals also has commenced fracture stimulation operations at its producing subsidiary OAO Petrosakh on Sakhalin Island. An initial four-well stimulation program has begun on the Okruzhnoye field.

During 2006, Urals Energy acquired and refurbished a Canadian-built fracture stimulation fleet consisting of three pumping units and blender. Urals Energy plans to fracture stimulate a total of nine wells at Petrosakh, and then move the equipment to the Komi Republic later this year, where it will continue fracture stimulating an additional five fields.

Initial Closing of Debt Financing

In addition, Urals said that its $130 million project development loan for OOO Dulisma closed last Friday. The loan was arranged by Goldman Sachs and funded by Standard Bank.

A first tranche funding of $50 million has been received, and the remaining $80 million is expected to be funded in approximately three weeks after approval by Urals Energy's senior bank syndicate.

As previously announced, the $130 million gross financing proceeds will be used to reimburse Urals Energy for planned development costs incurred at Dulisma since the field's acquisition in June 2006, the defeasance of cash interest payments for the first two years of the facility, and the remainder, for future capital and operating costs of Dulisma in order to develop the Dulisminskoye field to its projected peak production level of 30,000 BOPD by 2011.

The receipt of this first tranche and the expected timing on the remaining funding allows Urals Energy to work to the accelerated development timetable for Transneft's East Siberia Pacific Ocean pipeline, now under construction.

William R. Thomas, CEO, Commented:

"The closing of the Dulisma project loan is a key milestone in the development of this important field and with the appointment today of three key personal, including Maxim Bezriadin, who will be responsible for this field and other operations in Eastern Siberia, we are well prepared to meet all our targets on this project.

"Our planned fracture stimulation program at Petrosakh has now commenced and we hope to report on progress as we work to increase production on this field.

"We continue to put the building blocks in place and as we grow we recognize the importance of adding to our management ranks. As such, we are pleased to have executives who have solid experience operating in Russia join our team."