Alliance Oil acquires gas company and expands operations in Tomsk region

10/16/2012 2:00 AM EST

Alliance Oil Company Ltd
Company Announcement

Alliance Oil acquires gas company and expands operations in Tomsk region





  -- Alliance Oil has agreed to acquire 100% of the shares in LLC
     “SN-Gazdobycha” (SNGD) for 128 MUSD
  -- SNGD has two gas licenses in the Tomsk region which facilitate synergies
     with Alliance Oil’s regional operations
  -- 2P reserves of 112 million barrels of oil equivalent (mboe), 3P reserves of
     259 mboe and high exploration potential
  -- Gas production scheduled to commence in the first half of 2013
  -- Alliance Oil’s total reserves increase by 26% to 1,256 mboe

Alliance Oil Company has signed an agreement to acquire 100% of the shares in
LLC “SN-Gazdobycha” for 128 MUSD, which primarily will be funded from existing
cash and from debt facilities. SNGD holds two gas licenses covering an area of
about 1,323 square kilometers located approximately 55 kilometers west of the
town of Kargasok, in the Tomsk region in Russia. Proved and Probable (2P) gas
reserves are estimated at 112 mboe and Proved, Probable and Possible (3P)
reserves are estimated at 259 mboe[1]. Gas field development is at an advanced
stage with 4 new wells drilled and a 43 kilometers gas pipe joining the Gazprom
trunk pipeline at the Parabel tie-in point near completion. Gas production is
scheduled to commence in the first half of 2013. 

Through the acquisition, the Company's total hydrocarbon reserves (3P) will
increase by 26% from 997[2] mboe to 1,256 mboe. 2P reserves will increase by
17% to 760 mboe (from 648 mboe). 

"The Russian gas sector currently offers exciting opportunities for value
creation and attractive returns from an improving market environment. This
acquisition expands Alliance Oil’s position in the promising Russian gas market
and will be integrated into our subsidiary in the Tomsk region to realize both
operational synergies and immense exploration potential. As we execute our
upstream growth strategy, the Company’s reserve base is broadening, and gas
will increasingly contribute to production, revenue and results in coming
years”, says Arsen Idrisov, Managing Director of Alliance Oil Company. 

The transaction is expected to be consummated in the fourth quarter of 2012.



For further information please contact:

Arsen Idrisov, Managing Director, Alliance Oil Company, Tel.: +7 495 777 18 08

Eric Forss, Chairman, Alliance Oil Company, Tel.: +46 8 611 49 90



Also visit www.allianceoilco.com



1 As of February 29, 2012. Evaluated by DeGolyer and MacNoughton under SPE
standards. 

2 As of December 31, 2011. Evaluated by DeGolyer and MacNoughton under SPE
standards. 



Alliance Oil Company Ltd is a leading independent oil and gas company with
vertically integrated operations in Russia and Kazakhstan. Alliance Oil has
proved and probable reserves of 760 million barrels of oil equivalent and
downstream operations that includes the Khabarovsk refinery and the leading
network of gas stations and wholesale oil products terminals in the Russian Far
East. Alliance Oil's depository receipts are traded on the NASDAQ OMX Nordic
under the symbol AOIL.