#1t URALS ENERGY Investor Presentation First Half 2006 Results#2Company Overview Page 2 URALS ENERGY#3Urals Energy Public Company Limited Shares outstanding: Free float: Share price (as of 1/9/06): Market capitalisation: Enterprise value: 2P Oil Reserves: 117.8 (1) 65.6 million (56% of total (2)) £4.525 ($8.61) $1,013.6 million (£532.9 million) $1,051.1 million 225 MMB bls Pro forma Voivozh acquisition: 250 MM Bbls (3) 2P Enterprise value: $4.65 per barrel Notes: 1. 2. 3. Fully-diluted basis 121.6 million shares outstanding. On un diluted basis. Voivozh according to Russian C1-C2 reserves classification. Page 3 URALS ENERGY#4Portfolio Diversification Through Acquisition URALS ENERGY BARENTS SEA MOSCOW 6 234 6 Arctic Circle RUSSIAN FEDERATION KAZAKHSTAN MONGOLIA CHINA 1 Arcticneft (100%) ■2P Reserves: 36MM Bbls ■1,052 avg 1H 2006 ▪2 Refineries 1,200BOPD 2 Dinyu (100%) ▪2P Reserves: 21M MB bls 2,678 BOPD avg 1H 2006 3 Voivozh (100%) C1-C2 Russian Reserves: 25 MM B bls 4 CNPSEI (100%) ▪2P Reserves: 9MM Bbls -790 BOPD avg 1H 2006 6 Chepetskoye NGDU (100%) ▪2P Reserves: 23MM Bbls ▪844 BOPD avg 1H 2006 Sakhalin Island 8 BERING SEA 5 PACIFIC OCEAN 5 Urals Nord (100%) ■5 exploration licences JAPAN ▪94MM Bbls potential gross unrisked resoucres 7 Dulisma (100%) ■2P Reserves: 109 MMB bls 1.7 TCF Possible gas reserves "614 BOPD avg 1H 2006 8 Petrosakh (97%) ▪2P Reserves: 28MMB bls -852MM Bbls potential gross unrisked resources 3,088 BOPD avg 1H 2006 "Refinery 4,100 BOPD Page 4#5First Half Results Highlights Page 5 URALS ENERGY#6Urals Energy - Production Growth 20,000 BOPD Production History 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 650 2,000 5,600 4,300 I IPO I I I I 8,700 13,000 10,000 URALS ENERGY 19,000 0- Jul-03 Nov-03 Mar-04 Jul-04 Nov-04 Mar-05 Jul-05 Nov-05 Mar-06 Jul-06 Nov-06 Mar-07 Jul-07 Nov-07 July 2003 650 BOPD - Chepetskoye Acquisition Oct. 2004 2,000 BOPD - CNPSEI Acquisition Dec. 2004 4,300 BOPD - Petrosakh Acquisition July 2005 5,600 BOPD - Arcticneft Acquisition Nov. 2005 8,700 BOPD - April 2006 Year-end Year-end 2007 Dinyu Acquisition 10,000 BOPD Dulis ma Acquisition 2006 19,000 BOPD 13,000 BOPD New Target Page 6#7Improving Netbacks Improving Prices and Netbacks Ave rage oil sales prices $/bbl Average realized netbacks $/bbl URALS ENERGY 90 90 60.00 79.43 79.7 54.28 75.57 76.10 80 68.75 66.56 69.02 46.78 47.01 50.00 45.28 70 42.55 42.16 40.29 60 56.33 51.51 52.21 49.85 38.59 40.00 33.06 50 40.51 40 37.45 27.02 30.00 34.63 33.74 30.62 26.80 30 19.94 20 10 0 Q1'05 Q2 '05 Q3 '05 Q4 '05 Q1'06 Q2 '06 31.07 26.29 31.08 29.34 25.95 28.34 26.42 20.00 22.60 24.64 22.91 18.66 16.57 10.00 14.05 11.37 Q1 '05 Q2 '05 Q3 '05 Q4 '05 Q1'06 Q2 '06 Products Export Domestic Page 7 Products Export Domestic Export Duty#81H 2006 Gross Revenues & Netback Analysis $17,511,186 Total Gross Revenues US$ 78.4MM $13,149,024 $68.42/bbl $30.52/bbl $65.58/bbl $47,763,440 $17,511,186 URALS ENERGY Total Netback Receipts US$54.83MM $8,655,832 $45.04/bbl $40.07/bbl $30.52/bbl $28,664,555 Crude Export Crude Domestic Products Domestic Crude Export Crude Domestic Products Domestic 1) Net back analysis does not include third party crude sales Page 8#91H 2006 Financial Results Summary Operational Highlights Average 1H 2006 Oil Production: 9,089 BOPD . Current: 10,100 BOPD Percent of 1H 2006 Crude Exports: 55.5% Average 1H 2006 Netback: $37.43/bbl Export crude: $40.07 •Domestic crude: $30.52 Domestic products: $45.04 Financial Highlights URALS ENERGY Summary 1H 2006 and 1H 2005 in US $ thousands 1H 2006 1H 2005 Production (six month average BOPD) Income Statement Net revenues 9,089 4,250 58,438 21,232 IFRS EBITDA 15,518 6,841 . Acquisition expenditures: $150.7 million. • Funding raised in 1H 2006: Operating result 4,777 3,363 $195.0 million in net equity proceeds $12.0 million in subordinated debt 3,790 (800) Net profit/(loss) Page 9#10Achievements in First Year After IPO BOPD $MM URALS ENERGY "Increase production to 10,500 BOPD by end-2007" 12,000 Production Growth: +79% 10,100 10,000 8,000 5,600 6,000 mmboe 150 50 250 200 "Grow reserves through acquisition & drill- bit" 2P Growth: +151% (1) 2005 RRR: 107% 226 4,000 100 90 2,000 50 0 Aug '05 0 Sep '06 Notes Aug '05 Sep '06 10 10 5 0 "Net profit positive" 1. 2P excluding Voivozh, reserve replacement ratio excluding acquisitions "Achieve $1 billion market cap by end-2007" 11.56 1,200 1,000 87.4% Return 800 -5 -3.66 FY 2004 30.6.06 LTM $MM 600 541 400 200 Page 10 1,014 0 IPO 1 Sep 2006#11Year on Year Results Improvement - - Revenues ($MM) 70 60 175% increase 50 40 N WA 30 $21.20 20 10 0 IH 2005 $58.40 1H2006 Netbacks ($ per barrel) 40 35 GNN WA 15 30 $27.81 25 20 10 $37.43 5 0 1H 2005 1H 2006 Growth In Scale $MM 20 20 15 EBITDA ($MM) 240% increase 10 $5.96 5 Improvement in Economics 0.1 0.05 URALS ENERGY $18.14 1H 2005 1H 2006 EPS $0.04 0 1H 2005 1H 2006 -$0.02 -0.05 Page 11#12Forward View U Page 12 URALS ENERGY#13D&M Projected Daily Average Oil Production Estimated Daily Production (Existing 2P Reserves) BOPD(1) 60,000 50,000 40,000 30,000 20,000 10,000 Export 42% API 35° - 38° Export 35-100% API-40° URALS ENERGY 2011 • Peak production = 3.9x 2006 production • 89% export ⚫72% direct to Asia Export 100% API 48° 50° Refining Cover 90% (2) Export 97% API 36° Refining Cover 100% (3) Export 42% API 26°-43° 0 Export 42% API 28°-35° 2006 2007 2008 2009 CNGDU CNPSEI 2010 ■Petrosakh 2011 2012 2013 2014 2015 2016 Arcticneft Dinyu Dulisma Notes 125 1. 2. Average daily production from proved probable reserves for each year as estimated by DeGolyer & MacNaughton reports as at 31 December 2005 except for Dulisma as at 31 March 2006, excludes Voivozh Current refining capacity of Arcticneft is 1,200 BOPD 3. Current refining capacity of Petrosakh is 4,100 BOPD, upgradeable to 8,200 BOPD at limited cost Page 13 Since IPO Pre- IPO#14$MM 2006 Capital Expenditures Total Capex for 2006 = US $60MM - US $64MM 0 20 20 16.2 15 1.6 10 5 DYU 12.7 1.6 0.3 PSK 2.6 Exploration and G&G 7.2 11.0 0.8 11.7 0.6 0.3 14 ARK 9.3 14 1.1 0.4 0.1 0.4 0.5 CNPSEI Development CNGDU Page 14 2.8 2.4 0.1 0.3 Urals Nord 2.6 2.5 Facilities & Infrastructures 0.1 1.7 UE LLC 0.7 0.7 0.4 Dulisma Other 7.1 16.2 8.4 0.8 URALS ENERGY#15Anticipated Upcoming News Flow URALS ENERGY September 2006 • • . • Voivozh completion of acquisition Petrosakh well completion result Arcticneft spudding of first well Chepetskoye NGDU well completion result October 2006 • • • Petrosakh arrival of fraccing equipment. Dulisma arrival of mobile drilling rig Dinyu well completion result November 2006 • • • Petrosakh well completion result Arcticneft well completion result Dinyu well completion result. December 2006 • • Petrosakh initial fraccing results Arcticneft well completion result Dinyu well completion result Chepetskoye NGDU well completion result Remainder of 2006 9 development wells completed 2 well workovers ☐ 2 side-track wells ☐ 8 wells fracced ☐ 30% oil production increase Page 15#16URALS ENERGY Operating Companies Highlights Page 16#17East Siberia Gross Reserves Summary - mmboe 1P 36.8 DULISMINSKOYE FIELD URALS ENERGY 2P 3P (1) 2P PV10% TRANSNEFT ESPO PIPELINE - PROPOSED ROUTING & ESTIMATED TIMING URALE ENERGY 109.4 476.6 $410.1 MM Operations: Average Production ⚫826 BOPD currently •3,000 BOPD by end of 2007 30,000 BOPD peak in 2011 2006 Activity • Purchased new 160 ton mobile rig Commissioned D&M reservoir development model Working with Transneft on ESPO inter-connect 2007 Activity . 3-4 horizontal development wells 4 well workovers • MUSAN FEDERATION PHASE PHASE II PHASE IN 22001 BULIMINGKOTED UNT KUT экомолсоно MONIDUA CHINA ПАДНО P Possible second rig deployment New field camp, generator and separation facilities Initial interconnecting pipeline work - "This [ESPO], as I have already said, is a serious competitive advantage and here is the key to solve the energy problem of the region," - President V. Putin speaking in a Tomsk meeting on Siberian regional issues Notes 1. Includes 1.7 TCF of natural gas reserves according to 31/3/06 DeGolyer & MacNaughton reserves analys is Page 17#18Dulisma - Potential Areas of Value Creation $MM 900 800 700 600 500 $410 MM 400 300 200 100 $87 MM $193 MM Purchase Price: $148 MM URALS ENERGY $57 MM $855 MM $108 MM 0 (1) 2P - NPV 10 UPT Holiday Benefit (3) Lower Pipe Cost (4) Gas (5) Condensate Total Notes 1. Estimated by DeGolyer & MacNaughton as at 31 March 2006 2. 3. 4. Company estimates based on D&M report as at 31 March 2006 assuming exemption from Unified Production Tax (UPT) and appropriate capital structure to reduce corporation tax impact, UPT of $77.40/tonne as of 31 March 2006 NPV of pipeline cost investment made in 2008 and 2009, based on D&M Assumes a 1.9$/B bl discounted by 80% for the 1.68 TCF gas possible reserves as stated in D&M Dulis ma report, as per Morgan Stanley estimate 5. Assumes 2P NPV10 $/bbl multiple discounted by 80% for the 76.6 mmboe condensate possible reserves as stated in D&M Dulis ma report, as per Morgan Stanley estimate Page 18#19Sakhalin Gross Reserves Summary (mmbbl) 1P 2P 3P 2P PV10 24.9 27.5 Unrisked Potential Resources (¹) (mmbl) 47.4 $221 MM 852 Source D&M as at 31 December 2005 Operations • Average production -Current: 3,263 BOPD -2007 est. year end: 5,400 BOPD Remaining 2006 Activity . • Onshore: -3 development wells -3 re-entry wells -Frac 8 wells -3D seismic reprocess & reinterpretation -20,000 cm new crude storage tanks Offshore: -3D seismic reprocess & reinterpretation -Considering jack-up to drill 3 vertical wells 2007 Activity -3 development wells -Frac 1 well -3 oil new products storage tanks Notes 1. Calculated DeGolyer & MacNaughton as of 31 March 2005 Gross unrisked potential resources have not been adjusted for risk Page 19 SHEIM URALS ENERGY P * SEA OF OKNOTSK#20Komi Gross Reserves Summary (mmbbl) 1P 13.1 2P 29.9 3P 2P PV10% 51.0 $188 MM Source D&M as at 31 December 2005 Operations (Dinyu, S. Michayu, CNPS EI, Voivozh) • Average production Current: 3,920 BOPD - 2007 est. year end: 6,900 BOPD Remaining 2006 Activity . Dinyu 3 development wells 1 side-track well - 2D seismic program Voivozh - $1.5 million acquisition from LUKoil 25 million barrels C1-C2 Russian standard reserves Mature field with development upside Possible qualification for tax relief 2007 Activity • Dinyu 12 development wells plus possible exploration well . CNPSEI 2 development wells wells • Voivozh work-over wells • Komi-wide fraccing program Page 20 KOMI REPUBLIC Processing Facilities at Dinyu URALS ENERGY#21Timan Pechora Gross Reserves Summary (mmbbl) Unrisked Potential Resources 1P 2P 3P 2P PV10 (mmbl) 25.4 35.9 46.3 $229 MM 94 Teploye Cheshkove may Dugrinc Strait Operations (Arcticneft, Urals Nord) • Average production - Current: 1,013 BOPD 2007 est. year end: 2,100 BOPD Remaining 2006 Activity • Arcticneft - Complete reservoir model - - Drill 4 development wells - Drill 1 side-track well Evaluate deeper Permian horizon • Urals Nord - - Drill first exploration well Nadizhnsky prospect located 60 km south east of port of Varandey 60 mm bbl target at 3,700 meters 2007 Activity Arcticneft 6 development wells, possible second rig deployment • Arcticneft drill 2 side-track wells Arcticntis Mord Area of Operations Internation Primary Production L Statio Page 21 URALS ENERGY BARENTS SEA Pachora Bar Crew change at Arcticneft Tida#22Udmurtia Gross Reserves Summary (mmbbl) 1P 5.5 2P 3P 2P PV10% 23.3 28.8 $79 MM Source D&M as at 31 December 2005 Chepetskoye NGDU Operations • Average production: - Current: 1,095 BOPD ― 2007 est. year end: 1,600 BOPD Remaining 2006 Activity • Drill 4 development wells 2007 Activity ⚫ Drill 8 development wells Page 22 KIROV OBLAST UDMURT REPUBLIC Chepetskoye Workover Operations Dubrik URALS ENERGY