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West Siberian Resources

West Siberian Resources. Oil production and exploration in Tomsk region, West Siberia Total reserves in proven plus probable categories amount to 98 million barrels New dynamic and professional management team experienced in managing Russian energy assets

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West Siberian Resources

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  1. West Siberian Resources • Oil production and exploration in Tomsk region, West Siberia • Total reserves in proven plus probable categories amount to 98 million barrels • New dynamic and professional management team experienced in managing Russian energy assets • Underwent beneficial financial reorganization in 2004 • The only small cap publicly traded Russian oil Co offering high growth potential suitable to an "aggressive growth" investment objective • Listed on the Nya Marknaden since 2001

  2. Board of Directors • Eric Forss Chairman of the Board • Stan Phelps Vice Chairman • Maxim Barski Managing Director • Fred Boling Director • Claes Levin Director

  3. Leading officers at WSR Maxim Barski Managing Director Vyacheslav PershukovTechnical Director Ekaterina SapozhnikovaACCA, Finance Director Leading officers at VTK Konstantin BogatyrevManaging Director Alexander Karataev Chief Engineer Vitaly GusevChief Geologist Senior Management

  4. Share Information • Number of shares: 429,050,500 • Market Capitalization: 690,771,305 SEK • Market Capitalization: 99,106,375 USD • Trading at: Nya Marknaden (at Stockholmsbörsen) • Ticker: WSIB SE • Last price (18-02-2005): SEK 1.73 • Average daily turnover: 1,728,614 shares • Daily oil production: 5,000 bbls

  5. Main Shareholders

  6. Oil Reserves • - C1 = Proven category, C2 = Probable category. • - Middle Nyurola reserves were audited by Troy Ilkoda • - Subject to Russian Antimonopoly Committee approval

  7. WSR Achievements in 2004 • Strengthened the management team • Streamlined corporate structure leading to a savings in income tax of $381,000 • Improved corporate governance • Achieved financial turnaround and firmly moved to profitability through cost reduction and production increase. In Q4, WSR was profitable for the first time in its history • Designed and implemented an investment program allowing for sustainable oil production growth and reduction of per barrel costs of produced oil • Developed a strategic approach to new acquisitions and capabilities to quickly finance and integrate them • Cultivated good working relationships with local and federal authorities. This helped legally recover nearly $2 mln in CAPEX VAT refunds • Started upgrading the Central Production Facility to allow processing of nearly 20,000 barrels per day in 2006-2007 • Increased ownership of its key operating subsidiary VTK to 100% in June 2004 • Signed an agreement to acquire Khvoinoye oil field and Alexandrov refinery thus increasing reserves in proven plus probable category by 18 mln barrels • Constructed the Commercial Metering Terminal at Lugenitskoye • Attained direct access to Transneft’s pipeline system

  8. Oct – Dec 2004 Oil revenue increased +207% to MUSD 7.8 (2.5) EBITDA* MUSD1.6 (0.1) Net result** MUSD3.8 (-2.7) Oil production increased +195%to 434,903 bbls. Oct 2003 – Dec 2004 Oil revenue increased +150% to MUSD 22.1 (8.9) EBITDA* MUSD3.7 (-2.3) Net result** MUSD 0.8 (-6.6) Oil production increased +97%to 1,176,903 bbls. 2004 Results Note: All comparisons from the prior financial year reflects 12 months from October 1, 2002 – September 30, 2003 *EBITDA does not include impairment of O&G properties reversal in the amount of 21,379 KUSD in 5Q 2004 and impairment charge of 21,379 KUSD in 4Q 2003 ** Net result does not include impairment of O&G properties reversal in the amount of 21,379 KUSD in 5Q 2004 and impairment charge of 21,379 KUSD in 4Q 2003 and associated deferred tax charges.

  9. Group Structure • West Siberian ResourcesLtd (Bermuda) • O & G Credit Agency (Cyprus) Ltd(100%) • Vostok Oil (Cyprus) Ltd(100%) • OAO «Vostochnaya Transnatsionalnaya Kompaniya»Tomsk, • Russia • 100% • ZAO«Tomskzapadneft» Tomsk, Russia • 50%

  10. Operating Result *Operating result does not include Impairment of O&G properties in the amount of 21.379 KUSD in 4Q, 2003 ** Operating result does not include Impairment reversal in the amount of 21,379 KUSD in 5Q 2004 Extended financial year, Oct 1, 2003 – Dec 31, 2004

  11. Reducing Costs Source: VTK management accounts

  12. Production Costs USD per barrel of oil sold Extended financial year, Oct 1, 2003 – Dec 31, 2004

  13. Average Oil Sales Price Inclusive VAT and Export duty Extended financial year, Oct 1, 2003 – Dec 31, 2004

  14. Strategic Objectives • Improve operating margins and achieve significant increases in size • Grow organically and via acquisition of new oil fields • Expand the existing production base • Invest in further drilling activities • Conduct an aggressive exploration program • Find suitable acquisition candidates • Continue to optimize corporate structure • Take advantage of the newly-approved East Siberia – Pacific Ocean pipeline

  15. Grow existing producing assets Increase oil production from existing oil fields Reduce bottlenecks in the process flow Grow via acquisitions Acquire producing fields with existing infrastructure Acquire fields which may require additional exploration and development work Development Plan

  16. Grow existing producing assets Drilling 19 production wells Middle Nyurola field 10 production wells Kluchevskoye field Water injection facilities 9 water injection wells Middle Nyurola field 4 water injection wells Kluchevskoye field 2 water supply wells Electrical power supply Power generators fuelled by produced gas Pipeline Connection of Kluchevskoye field to the central processing facilities at Middle Nyurola Development Plan

  17. Development Plan Grow via acquisitions • Seek acquisition targets of already producing fields which can be brought on stream quickly • Consider acquisition of fields which require additional exploration and development work before production can be initiated

  18. Production Growth • Current oil production 5,000 bbls/day • Production peak expected at 18,000 bbls/day in 2007

  19. WSR Share

  20. Conclusion • New management is bringing positive results • Production base expansion • Large increase in oil production • Reduced costs • Increased operation efficiency • Moved to profitability • Healthy cash flow • Further growth through investment and acquisitions • Aggressive growth potential

  21. Oil Production Forecast

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