20 February 2019

Urals Energy Public Company Limited

("Urals Energy", the "Company" or the "Group")

Update re extraordinary general meeting

Urals Energy announces the following details of the extraordinary general meeting scheduled for 11am Cypriot time, 9am GMT, on the 22nd February 2019 (the "EGM") at the registered office of the Company at Glafkos Tower, Office 501, 5th floor, 3 Menandrou street, Nicosia, CY-1066, Cyprus.

The EGM is to be chaired by Marina Foradari in her role as an "alternate director". The Board of Directors (the "Board") do not intend to travel to the EGM due to the current working capital position of the Company, as they believe it is in the best interests of the shareholders to reduce any and all unnecessary costs at this moment in time. The EGM will be attended by representatives of Computershare Investor Services PLC, the Company's transfer agent and registrars, who will act as independent scrutineers.

As per 'Appendix 1: Information regarding voting at the EGM' of the Company's circular posted to shareholders on the 31 December 2018 (the "Circular"), the voting at the EGM will be conducted by poll and not a show of hands. The result of the EGM will be announced, via the RNS, after the meeting has closed and after the independent scrutineers have completed their count.

The requisitioner, Adler Impex SA ("Adler"), has recently requested that the Company make available to its shareholders a circular which it has prepared in connection with the EGM.  This circular will be available shortly on the Company's web site. The Board takes no responsibility for the contents of Adler's circular.

Having reviewed Adler's circular, the Board make the following comments.

·     Far from it being the case that the Board has not been active in mergers & acquisitions, the Company has acquired three private companies in recent years and won a new licence on Sakhalin Island, increasing reserves and resources substantially. In 2018, the Board engaged a financial adviser to assist in the search for partners to speed development of the Company's reserves, but this exercise has had to be postponed as the working capital problems of the Group emerged due to the actions of Mr Kononov, many of which were not authorized by the Board.  Details of Mr Kononov's unapproved actions were included in the Circular and in the Company's announcements since the Autumn of last year.

·     Other potential acquisitions have been considered over recent years but have not been seen as favourable to our shareholders, and Mr Kononov has been party to those decisions. Whether the climate and conditions will change to be more favourable for such deals, remains to be seen, but at present the appetite to support Russian investment amongst investors generally has been negative.

·     It would appear that the directors being proposed to join the board by Adler are prepared to leave Mr Kononov in his position as president of JSC Petrosakh, notwithstanding the evidence set out in the Company's recent announcements.   

·     Finally, Adler's circular makes no reference to how Adler or the proposed directors proposed to address the Company's significant working capital deficit, details of which the Board have previously announced. 

The Board continues to recommend shareholders to vote against ALL the resolutions proposed by Adler Impex Sa at the EGM on 22nd February.

- Ends -

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