OOO “KRT-OilGasTrans” closing and update of long term strategy

Closing of transaction for acquisition of OOO "KRT-OilGasTrans" and update of long term strategy

Selena Oil & Gas Holding AB (SOGH) is pleased to announce that the transaction for acquisition of OOO "KRT-OilGasTrans" (as previously announced on 14 July 2011 and 13 December 2011) was closed on 30 December 2011.

As the result of the transaction SOGH has acquired OOO "KRT-OilGasTrans" (KRT-OGT) together with its three subsidiaries, all located in the Perm region of the Russian Federation and all shareholder loans against the target companies from Mr. Juri Gusev, Mr. Konstantin Truhin and ZAO "KRT-Invest". KRT-OGT currently has no production and revenue; however, the management anticipates start of the production in 2012 provided sufficient financing. KRT-OGT reserves based on DeGolyer & MacNaughton Competent Person assessment are:

•    Total 1P reserves equal to 8.5 Mmboe (million barrels of oil equivalent)
•    Total 2P reserves equal to 18.7 Mmboe
•    Total 3P reserves equal to 35.1 Mmboe
•    Prospective resources equal to 17.5 Mmboe

The total purchase price for the 100% of KRT-OGT is 73.2 million SEK and was fully settled in shares of SOGH in the amount of 9.15 million shares. Ms. Elena Popova, one of the major shareholders in SOGH, agreed to provide the necessary amount of shares to the sellers on behalf of SOGH and is entitled to receive the same amount of new shares in SOGH. The new shares to be issued to Ms. Elena Popova will be valued at 8 SEK per share and issued under the authorisation granted to SOGH's Board of Directors in Q1 2012. According to the agreement with the sellers, a lock-up period restricting sale of 5.34 million shares ends on 15th February 2012 and lock-up period for the remaining 3.81 million shares ends on 13th June 2012.

Based on the purchase price the 2P valuation multiple for the transaction is 0.57 USD per barrel of 2P reserve. After the completion of the acquisition total 1P reserves of SOGH amount to 19.6 Mmboe, 2P reserves - 41.3 Mmboe, 3P reserves - 66.9 Mmboe and prospective resources will amount to 107.8 Mmboe.

SOGH has also updated its overall long term strategy and set three mid-term objectives. These mid-term objectives include increasing the oil production from existing reserves, launching production on the newly acquired KRT-OGT fields and continuing the process towards becoming a gas producer. For the realization of this strategy SOGH, has estimated total capital investment required for 2012 to be approximately 21.2 million USD. The achievement of the current plans is heavily dependent on the access to financing. Provided the capital investment plan for 2012 is fully and timely funded the incremental peak production related to the investment could reach 1700 barrels of oil per day in 2013. SOGH intends to finance the capital expenditure plan through a new issue of shares and/or debt facilities. In case the full amount of required capital expenditure for 2012 will not be funded, the expansion plans will be revised respectively, based on the management's assessment of the investment opportunities available considering the given amount of funding.

For further information, please contact:
Indrek Rahumaa, Chairman of the Board, phone [phone] or [phone], e-mail: [e-mail]

Selena Oil & Gas Holding AB (publ) (former Emitor Holding AB) is engaged in the production and transportation of oil and gas in the Volga-Ural region in the Russian Federation, including Perm and Udmurtia. The company is listed on NASDAQ OMX First North Premier in Stockholm under the ticker SOGH. Mangold Fondkommission is the company´s Certified Adviser and liquidity provider, telephone [phone]. 

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