Urals Energy Shares Fall on Venture Talk

LONDON -- Urals Energy fell the most since listing in 2005 after the oil explorer said it was considering "different options" for the Taas-Yuriakh asset in Siberia.

The company fell 8.5 pence, or 23 percent, to 28.5 pence in London on Thursday afternoon, the biggest decline since listing its shares in August 2005. "No agreement has been reached with any company, and there can be no assurance that any such agreement will be reached," Urals said in a statement.

Kommersant reported that Royal Dutch Shell was in talks to form a joint venture with Urals Energy and buy half of the Taas-Yuriakh oil production company, which develops the Sredne-Botuobinskoye field in eastern Siberia. Spokespeople at Shell and Urals declined to comment.

"Despite the potential positive development, we continue to be cautious on Urals Energy because of its short-term debt of $624 million, which the company has to refinance," Artyom Konchin and Ilya Balabanovsky, analysts at UniCredit, wrote in a report. It is a "challenging task given the current loan market conditions."

Urals' debt as of Sept. 30 comprised two loans from Sberbank. The largest is a one-year, $500 million loan with a 14 percent interest rate, which expires in November, Urals said.

Taas-Yuriakh's main asset is the license to develop the Sredne-Botuobinskoye field, which may hold more than 100 million tons of oil, the company's web site says.