Urals Energy Prices Private Placement

Urals Energy reports the successful private placement of a total of 32,857,000 new ordinary shares of the Company at a price per share of GBP1.90, raising GBP62.4million (US$128.5million¹), before expenses.

The proceeds of the Placing will be used by the Company for potential capital expenditure requirements, including participation in future complementary license auctions, repayment of short-term loans and for general corporate and working capital purposes.

The Placement Shares will be issued credited as fully paid ranking pari passu in all respects with the Company's existing ordinary shares, including the right to receive all dividends and other distributions declared, made or paid after the date of issue.

The Placing is conditional upon, inter alia, (i) completion of the acquisition of a 32.3% interest in OOO Taas-Yuriakh Neftegazodobycha ("Taas") referred to in the Company's announcement dated 28 November 2007; (ii) admission of the Placement Shares to trading on the Alternative Investment Market of the London Stock Exchange; and (iii) the approval by shareholders at an Extraordinary General Meeting of the Company to be held on December 17, 2007 of an increase of the Company's authorized share capital to 300,000,000 shares and disapplication of pre-emption rights in relation to the Placement Shares. The Company continues to expect the Acquisition to close no later than December 18, 2007.

Application for Admission has been made and it is expected that Admission will become effective and that dealings in the Placement Shares will commence on December 18, 2007.

Certain current shareholders of the Company and the sellers in the Acquisition (with respect to the shares to be issued to them pursuant to the Acquisition) have undertaken not to dispose of ordinary shares in the Company for a period of 180 days following completion of the placement of the Placement Shares, subject to customary exceptions.

Morgan Stanley Securities Limited acted as lead manager in connection with the private placement.