Urals Energy Chairman Andrew Shrager on Thursday said the company has entered the year with 'renewed optimism' after resolving its legacy issues.

The Russian exploration and production company paid off a majority of its loan from Petraco Oil Company, leaving $3.0m in interest outstanding. The final sum is expect to be paid before the end of the year.

Petraco has now released its security pledge over the company's Petrosak asset and the board is in discussions about releasing its pledge over the Articneft prospect.

The board said it was also pleased with results of an arbitration against former director Vyatcheslav Rovneiko over his repayment of a $3.7m loan. Rovneiko will need to pay $7.5m including the loan, interest and legal costs to the company.

With the issues resolved, the company is now able to focus on its operations in Petrosakh and ArcticNeft.

Current production at Petrosakh is 1,440 barrels of oil per day (bopd). The company plans to drill two new wells at the prospect this year, subject to Russian regulatory approvals.

At Arcticneft production is stable at 712 bopd. Urals has entered into a contract to carry out a passive seismic study for the identification of potential hydrocarbon pools with Geodynamics Worldwide Srl.

Results are expected to be finalised by summer 2013 and the board anticipates one new well will be drilled this year.

"With the majority of the company's legacy issues now resolved, Urals Energy enters into 2013 with renewed optimism for executing its strategic plan," Shrager said.

"This includes further strengthening of our balance sheet, primarily by increasing output at both Petrosakh and Arcticneft, and also, by looking at possible [merger and acquisition] opportunities. The company is now entering a key period in its corporate development as the board seeks to create maximum value for shareholders."

Shares were up 2.83% at 6.17p by 09:59 on Thursday.

RD

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