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Welcome to Extraordinary General Meeting

Welcome to Extraordinary General Meeting. January 31, 2006. Meeting Agenda. 1. Val av ordförande för stämman/ Election of Chairman for the meeting. 2. Upprättande av godkännande av röstlängd/ Preparation and approval of voting list. 3. Godkännande av dagordning/ Approval of the agenda

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Welcome to Extraordinary General Meeting

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  1. Welcome toExtraordinary General Meeting January 31, 2006

  2. Meeting Agenda 1. Val av ordförande för stämman/ Election of Chairman for the meeting. 2. Upprättande av godkännande av röstlängd/Preparation and approval of voting list. 3. Godkännande av dagordning/ Approval of the agenda 4. Val av en eller två justeringsmän /Election of one or two persons to check and verify the minutes. 5. Prövning av om stämman blivit behörigen sammankallad/Verification that the meeting has been duly convened. 6. Beslut om ökning av högsta tillåtna aktiekapital/Resolution to increase the authorised share capital of the company 7. Beslut om bemyndigande för styrelsen att fatta beslut om emission av aktier m.m. company/Resolution to authorise the Board of Directors to resolve to issue new shares etc., through a cash or non-cash issue with deviation from current shareholders' pre-emption rights. 8. Val av minst en ny styrelseledamot/Resolution to elect new board member(s). 9. Övriga ärenden/Any other business. 10. Stämmans avslutande /Conclusion of the meeting

  3. West Siberian Resources • Independent oil company operating in Russia • Listed on the Nya Marknaden at Stockholm Stock Exchange since 2000 • Achieved financial turnaround through reorganization in Q1 ‘04 • Entered Timan-Pechora and Volga-Urals regions in 2005 via acquisition of Pechoraneft two additional licenses and Saneco • Board of Directors: • Eric Forss Chairman of the Board • Maxim Barski Managing Director • Fred Boling Director • Claes Levin Director • Oleg Fomenko Director Candidate • Number of shares: 792,527,312, average daily turnover 3 mln • Shareholders: • Alltech Investments 18% • Investors Life Insurance Corp. 9% • International institutional investors 29% • Individuals – more than 10,000 44%

  4. Presentation Highlights • SPE reserves of 96 (1P), 176 (2P) and 259 (3P) MM bbl, ABC1+C2 of 293 MM bbl (1) • Low risk, long term growth - 24 years of 2P reserves • Target to exceed 30,000 bpd in 2007; visible growth through 2011 • Exploration potential in 19 identified structures Significant Asset Base Poised for Growth Visible Acquisition Opportunities • Already present in three of Russia’s most prolific oil regions • M&A strategy focused on leveraging existing infrastructure and achieving cost synergies • Soft pipeline of M&A opportunities in existing core areas • Proven ability to win at license auctions, more to come Increasing Profitability • Highly cost conscious with efficient local management • Production increases, technology adds to improve unit costs further • Focus on improving revenues/netbacks, benefiting from favourable domestic pricing • Improving in-house sales and marketing expertise • Multi-disciplinary management team: upstream, finance and M&A expertise • Proven track record of improving operations and integrating acquisitions • Executed successful turnaround of WSR – outstanding financial performance • 728% EBITDA growth ’04-’05 (Q3) Proven Management Track Record 1. SPE reserves as appraised by D&M, including Saneco scheduled to close in Q1 ‘06

  5. Brief History 1998 • Incorporated in 1998 in Bermuda as Vostok Oil Limited 1999 • Acquired 80% interest in OAO Vostochnaya Transnatsionalnaya Kompaniya (“VTK”) 2000 • Listed SDRs on Nya Marknaden of the Stockholm Stock Exchange 2002 • Rights issue of convertible bonds with preferential rights for the shareholders • Recapitalisation of the company through a debt to equity swap – provided necessary liquidity • $29 MM rights issue to strengthen balance sheet and complete restructuring, Alltech acquiring a 24% stake • Name changed to West Siberian Resources • WSR purchases remaining 20% of VTK • Shareholders elect new Board of Directors • Maxim Barski joins as CEO – initiates restructuring of the company 2004 • March: acquired Khvoinoye field (15 MM bbl 2P) and the Aleksandrov refinery for $9.1 MM • April: $49 MM rights issue to finance acquisitions of Khvoinoye and settle remaining convertible debentures • July: acquired Pechoraneft for $113 MM entering the oil-rich Timano-Pechora region • July: acquired NBNK which holds an exploration licence near Middle Kharyaga for $5.1 MM (and assumption of $4.6 MM debt) • September: $60 MM equity placement to finance Pechoraneft acquisition • November: acquired two 25-year production licences for North and Lek Kharyaga Oil fields for $67 MM near Pechoraneft infrastructure 2005 2006 • January: announced the acquisition of Saneco Oil Company which holds three production and 3 exploration licences in the Volga-Urals region for $140 MM, scheduled to close in Q1 ‘06

  6. Production and Financial Highlights • Production, BOPD • Strong production growth • ‘05 average: 8,154 bpd • December ’05: 20,302 bpd, including 5,809 bpd at Saneco • 193% YoY production growth in Q4 ‘05 • Outstanding financial results (9 months 2005) • Revenue: $46.1 MM (288% YoY growth) • EBITDA: $17.1 MM (728% YoY growth) • Net Income: $7.4 MM • Performance Targets • We expect peak production of 50,000 bpd from existing asset base • Controllable costs for producing assets (VTK, PN): 2006 – below $4 per bbl (1) • EBITDA, $ MM 1. Pro forma for Saneco

  7. Reserve Growth and M&A Activity • 5 transactions in last 11 months • 143.4 MM bbl (2P) acquired • 322% reserves growth including Saneco (ABC1+C2) • Key investment criteria: • Proved and probable reserves and current production • Upside in undeveloped resources • Fields adjacent to current infrastructure • Higher proportional exports fraction • DCF-based valuation with appropriate risk-adjusted returns >15% ABC1+C2 Reserves (MM bbl) Russian E&P Sector Very Fragmented Daily Production, tboe/day Number of Companies Source: Oil and Capital, May 2005

  8. Tomsk Turnaround Story • Turnaround: • Q4 ’03 production: 1,401 bpd • 5 wells drilled in 2004 • 11 production and 5 injection wells drilled in 2005 • Now producing 6,130 bpd • 2006 Capex $25.6 MM, including 12 new production wells • Margins rising • Falling controllable production costs from $9.2/bbl to $4.6/bbl • Alexandrov refinery Middle Nyurola Geological Model

  9. Strategic Entry to Timan-Pechora • 3 acquisitions since Summer ‘05 • Pechoraneft, NBNK • 2 licences via auction • Attractive entry cost ($1.9/bbl 2P) • Estimated resources of 65 MM bbl • ‘06 Capex of $33.1 MM, including 7 production and 1 exploration well • Leveraging existing infrastructure • Visible M&A and auction pipeline North Kharyaga Middle Kharyaga (Pechoraneft) Lek-Kharyaga NBNK License area

  10. Volga-Urals: Substantial Upside • Saneco to be acquired for $140 MM • $70 MM in stock • $70 MM in cash • To close in Q1 ‘06 • Attractive license portfolio • 3 production, 3 exploration • 3P reserves of 30.6 MM bbl, ABC1+C2 50.7 MM bbl • Additional estimated recoverable resources of 84 (C3) and 141 (D1) MM bbl • December production of 5,809 bpd • Recent exploration success • 100% hit rate 1. Management estimates based on Saneco’s RAS accounts

  11. Financial Overview

  12. WSR Achievements 2005 • Production increased by 186% to 1,701,869 bbls (3rd quarter – 766,534) • Revenue increased by 288% to $46 mln • $17 mln EBITDA for 9 months 2005 • Drilled 14 (11 - VTK, 3 - Pechoraneft) production and 5 injection wells in 2005 • Finished independent energy supply system • Acquisition of Pechoraneft and NBNK increased daily production by 123%, added 45.3 mln bbl 2P(1) • $60 mln acquisition financing from BNP-Paribas • $60 mln successful equity placement, number of shares increased from 686 to 792.5 mln • 2 new licenses in Timano-Pechora region, added 50.5 mln bbl 2P(1) • $40 mln of additional acquisition financing raised from BNP-Paribas • MoU signed to acquire Saneco for $140 MM, adding 23.9 MM bbl 2P(1) reserves and substantial exploration potential 1. Reserves numbers in acquisitions on an SPE basis according to new D&M reports

  13. Summary Financials • Substantial improvement in financial position over the last five quarters • Growth in profitability • Favourable oil price trends • Focus on cost controls • DD&A to increase in full year ’05 financials per recent D&M reserve report 1. Management estimates of WSR + Pechoraneft for 9M ‘05 on IFRS basis. Net income in full year financials to reflect higher depletion rates per recent D&M reserve report

  14. Improving Netbacks • Domestic market increasingly linked to world prices • Further improvements expected • Benefits of growing scale • Saneco favourable location with loading infrastructure to allow for greater export share • Saneco trading expertise to help drive cost optimization and better control • Average Oil Sales Price, $/bbl • Average Realized Netback, $/bbl (1) (3) (4) (2) 1. Including export duty, transportation and other costs 2. Including VAT 3. Net of export duty, transportation and other costs 4. Net of VAT

  15. Continuing Cost Reduction Controllable Production Costs, $/bbl (1) • Technological improvements • VTK/Transneft link • Own power generation • Alexandrov refinery • SG&A reductions • Optimized cost at WSR in 2004 • Pechoraneft synergies • Improved information, monitoring systems 1. Total production costs excluding production tax

  16. Balance Sheet • Cost of capital falling as funding options grow • To raise $170 MM (debt and equity) in Q1 ’06 • $70 MM Remaining Saneco payment • $40 MM Debt repayment • Remainder to fund capex, general corporate purposes 1. Management estimates; does not include potential contingent liability from Pechoraneft litigation

  17. Current Investment Plan • ‘06 budget of 79.3 MM • 26 new production and injection wells • 12 in the Tomsk region • 7 in the Timan-Pechora region • 3 in Volga-Urals region • 3 exploration wells in Volga-Urals region • 1 exploration well in Timan-Pechora region • Additional infrastructure investments to improve production rates 2006 Capex – $ 79.3 MM (1) 1. Pro forma for Saneco

  18. Ownership Structure Pro Forma Ownership (1) Current Ownership (3) (2) (2) (3) 1. Assumes 116.5 MM shares issued to Saneco shareholders 2. Euroclear Bank, Nordea Bank, Deutsche Bank London Branch, Deutsche Bank Ag Frankfurt, Sis Sega Intersettle, Clearstream Banking, Aton International Limited, Banque Invik, State Street Bank and Trust, M M Warburg & Co Kgaa 3. On closing of the acquisition, Alltech and Saneco shareholders intend to enter into an agreement in relation to the purchase by Alltech of approximately 25 million SDRs issued to Saneco shareholders at market price. In addition, Alltech and Saneco shareholder Meadowlane will have entered into a shareholders agreement including limitations on sales of WSR SDRs, commitments with respect to each having one director on the WSR Board and agreeing to reach consensus, and a commitment for Saneco shareholders not to attempt to remove M. Barski as WSR’s CEO

  19. Strengthening the Board • Oleg Fomenko, Director Candidate • Mr. Fomenko, a Russian citizen, was born in 1964 • Graduated from the Moscow State Institute of International Relations and completed a post graduate degree at the Institute of Oriental Studies of the Russian Academy of Sciences • Currently director of Management Sciences Center for Fuel Energy • Between 1994-2004 was the Commercial Director of Moscow Representative for Crudex OY, a Finnish oil trading group • Between 1989 and 1992 he was Assistant Director at JV Kontinentalinvest • Mr. Fomenko brings substantial marketing and trading experience to WSR • Will lead internal group to market WSR crude

  20. Meeting Agenda . 1. Val av ordförande för stämman/ Election of Chairman for the meeting. 2. Upprättande av godkännande av röstlängd/Preparation and approval of voting list. 3. Godkännande av dagordning/ Approval of the agenda 4. Val av en eller två justeringsmän /Election of one or two persons to check and verify the minutes. 5. Prövning av om stämman blivit behörigen sammankallad/Verification that the meeting has been duly convened. 6. Beslut om ökning av högsta tillåtna aktiekapital/Resolution to increase the authorised share capital of the company 7. Beslut om bemyndigande för styrelsen att fatta beslut om emission av aktier m.m. company/Resolution to authorise the Board of Directors to resolve to issue new shares etc., through a cash or non-cash issue with deviation from current shareholders' pre-emption rights. 8. Val av minst en ny styrelseledamot/Resolution to elect new board member(s). 9. Övriga ärenden/Any other business. 10. Stämmans avslutande /Conclusion of the meeting

  21. Styrelsens Förslag/The Board's proposal for resolutions Punkt 6/Item 6 Styrelsen föreslår att högsta tillåtna aktiekapital ökas från nuvarande USD 50 miljoner motsvarande 1 miljard aktier till USD 75 miljoner motsvarande 1 500 000 000 aktier. The Board of Directors propose that the authorised share capital is increased from currently USD 50 000 000 corresponding to 1 000 000 000 shares to USD 75 000 000 corresponding to 1 500 000 000 shares.

  22. Meeting Agenda . 1. Val av ordförande för stämman/ Election of Chairman for the meeting. 2. Upprättande av godkännande av röstlängd/Preparation and approval of voting list. 3. Godkännande av dagordning/ Approval of the agenda 4. Val av en eller två justeringsmän /Election of one or two persons to check and verify the minutes. 5. Prövning av om stämman blivit behörigen sammankallad/Verification that the meeting has been duly convened. 6. Beslut om ökning av högsta tillåtna aktiekapital/Resolution to increase the authorised share capital of the company 7. Beslut om bemyndigande för styrelsen att fatta beslut om emission av aktier m.m. company/Resolution to authorise the Board of Directors to resolve to issue new shares etc., through a cash or non-cash issue with deviation from current shareholders' pre-emption rights. 8. Val av minst en ny styrelseledamot/Resolution to elect new board member(s). 9. Övriga ärenden/Any other business. 10. Stämmans avslutande /Conclusion of the meeting

  23. Styrelsens Förslag/The Board's proposal for resolutions Punkt 7/Item 7 Styrelsen föreslår att bolagsstämman ger styrelsen ett bemyndigande att besluta om nyemission av aktier, konvertibla skuldebrev, skuldebrev såväl utan som i förening med optionsrätt till nyteckning av aktier samt optioner, sammanlagt högst upp till det antal aktier som ryms inom det tillåtna aktiekapitalet. Styrelsens beslut om emission skall kunna ske med avvikelse från aktieägarnas företrädesrätt. Bolagsstämmans bemyndigande skall även omfatta rätt för styrelsen att besluta om apportemission eller att aktie eller annat skall tecknas med kvittningsrätt. Syftet med bemyndigandet är att öka bolagets finansiella flexibilitet, att ge styrelsen möjlighet att utfärda optioner till nyckelpersoner innebärande rätt till framtida teckning av aktier på förmånliga villkor samt att de emitterade aktierna skall kunna utgöra förvärvsvaluta i samband med förvärv som bolaget kan komma att genomföra. Utgångspunkten för emissionskursens fastställande även som framtida teckningskurs skall vara aktiens marknadsvärde vid emissionstillfället eller i förkommande fall utgivandet av optionen. The Board of Directors propose that the General Meeting authorises the Board to resolve to issue new shares, options, convertible bonds or bonds with or without an option to subscribe for new shares, the maximum of which is the amount of shares allowed within the maximum authorised share capital. The Board of Directors' resolution of a share issue should be permitted to be made with deviation from existing shareholders' pre-emption rights. The meeting's authorisation shall also include a right for the Board of Directors to resolve on a non-cash issue or that shares shall be subscribed for with a right to offset debt. The purpose of the authorisation is to increase the financial flexibility of the company, to allow the board to grant stock options with a right to future exercise on favorable terms to key members of the staff as well as to function as consideration in connection with possible acquisitions. The subscription price shall be determined on the basis of the fair market value of the share at the occasion of each share issue or option grant as the case may be.

  24. Meeting Agenda . 1. Val av ordförande för stämman/ Election of Chairman for the meeting. 2. Upprättande av godkännande av röstlängd/Preparation and approval of voting list. 3. Godkännande av dagordning/ Approval of the agenda 4. Val av en eller två justeringsmän /Election of one or two persons to check and verify the minutes. 5. Prövning av om stämman blivit behörigen sammankallad/Verification that the meeting has been duly convened. 6. Beslut om ökning av högsta tillåtna aktiekapital/Resolution to increase the authorised share capital of the company 7. Beslut om bemyndigande för styrelsen att fatta beslut om emission av aktier m.m. company/Resolution to authorise the Board of Directors to resolve to issue new shares etc., through a cash or non-cash issue with deviation from current shareholders' pre-emption rights. 8. Val av minst en ny styrelseledamot/Resolution to elect new board member(s). 9. Övriga ärenden/Any other business. 10. Stämmans avslutande /Conclusion of the meeting

  25. Strengthening the Board • Oleg Fomenko, Director Candidate • Mr. Fomenko, a Russian citizen, was born in 1964 • Graduated from the Moscow State Institute of International Relations and completed a post graduate degree at the Institute of Oriental Studies of the Russian Academy of Sciences • Currently director of Management Sciences Center for Fuel Energy • Between 1994-2004 was the Commercial Director of Moscow Representative for Crudex OY, a Finnish oil trading group • Between 1989 and 1992 he was Assistant Director at JV Kontinentalinvest • Mr. Fomenko brings substantial marketing and trading experience to WSR • Will lead internal group to market WSR crude

  26. Meeting Agenda . 1. Val av ordförande för stämman/ Election of Chairman for the meeting. 2. Upprättande av godkännande av röstlängd/Preparation and approval of voting list. 3. Godkännande av dagordning/ Approval of the agenda 4. Val av en eller två justeringsmän /Election of one or two persons to check and verify the minutes. 5. Prövning av om stämman blivit behörigen sammankallad/Verification that the meeting has been duly convened. 6. Beslut om ökning av högsta tillåtna aktiekapital/Resolution to increase the authorised share capital of the company 7. Beslut om bemyndigande för styrelsen att fatta beslut om emission av aktier m.m. company/Resolution to authorise the Board of Directors to resolve to issue new shares etc., through a cash or non-cash issue with deviation from current shareholders' pre-emption rights. 8. Val av minst en ny styrelseledamot/Resolution to elect new board member(s). 9. Övriga ärenden/Any other business. 10. Stämmans avslutande /Conclusion of the meeting

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