Zoltav Resources: Aiming to “Live Within Our Means and Focus on Operational Excellence”

Zoltav, the Russia and CIS-focused oil and gas exploration and production company, announces final results for the year ended 31 December 2014.

Corporate Highlights

· Acquired 100 per cent. interest in the Bortovoy Licence in the Saratov Oblast of the Russian Federation on 18 June 2014 for US$180 million – 3,215 square kilometre area containing a number of productive gas fields, a processing plant and significant appraisal upside.

· Transaction supported by major shareholders – raised US$66 million through the issue of Zoltav shares at US$1.60 (100 pence) per share.

· Board strengthened with appointments of Alastair Ferguson as Executive Chairman, Andrey Komarov as Executive Director and Marcus Rhodes and Yulia Lebedina as Non-executive Directors.

· Group Proved plus Probable reserves under PRMS increased to 210 mmboe.

Operational Highlights

· Successful transition to a producing oil and gas business.

· Integration of the Bortovoy Licence and operating assets in the Saratov Oblast.

· Achieved full plant capacity at Bortovoy of 48.4 mmcf/d (1.4 mmcm/d) of gas in October – three months ahead of schedule.

· Advanced feasibility and viability planning for development for Bortovoy’s Eastern Fields – including plans for the Eastern Gas Plant.

· Acquisition of 3D seismic and well-testing programmes on the Koltogor Licences in Khantiy-Mansisk, West Siberia.

· Substantial upgrades of Russian standard C1+C2 reserves at Koltogor Licences – now over 1 billion barrels (updated CPR to be commissioned during 2015).

Financial Highlights

· Revenues of US$20 million from 196 days of production at Bortovoy (2013: US$ nil).

· Operating loss US$4.5 million (2013: US$5.0 million), reflecting costs of US$3.2 million associated with acquisition of Bortovoy Licence and Koltogor work programme.

· Cash and cash equivalents of US$10.7 million at year end (2013: US$ 7.3 million).

Alastair Ferguson, Executive Chairman, commented

“The conditions currently affecting the sector in our region have, in my opinion, created a significant opportunity for a company with Zoltav’s specific characteristics to build a strong, medium sized, CIS-focussed oil and gas company. While we undertake the work to develop our existing portfolio and review the acquisition opportunities available to the Company we have set out to live within our means and focus on operational excellence.

“With the completion of the acquisition of the Bortovoy Licence and the integration of this asset into the Company, our focus there is on ensuring that the Western Gas Plant continues to produce at full capacity and that the Western Fields are developed efficiently and effectively; while concurrently developing an appraisal strategy for the highly prospective Eastern Fields of the licence.

“At Koltogor, the interpretation of 3D seismic data from last year’s programme has enabled the Company to re-map the reservoir distribution of the oil field which we now understand to be a significantly bigger asset.

“We continue to seek opportunities for growth, both organically and through acquisition in our core areas of Russia and the CIS and we anticipate a significant amount of our effort to be focused on this during 2015.”