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Vanco Prykerchenska Ltd. Fully Prepared to Conduct Meaningful Negotiations With the Government of Ukraine

August 8, 2008

KYIV, Ukraine, Aug. 8 /PRNewswire/ — Vanco Prykerchenska Ltd. (VPL) today confirmed its readiness to begin a dialogue with the Cabinet of Ministers of Ukraine as soon as the company receives a direct and official request from the government of Ukraine to begin negotiations.

VPL will not suspend proceedings in the Arbitration Institute of Stockholm unless and until VPL and the government make significant and meaningful progress in the discussions over the company’s Hydrocarbon Sharing Agreement (HSA).

At an August 7, 2008 press conference in Kyiv, Jim Bown, President of VPL, stated, “We remain open to conducting a meaningful dialogue with the Cabinet of Ministers of Ukraine to finally resolve all outstanding issues in a short time. We look forward to beginning the exploration of the Prykerchenska shelf of the Black Sea which has tremendous potential to increase Ukraine’s domestic oil and gas production and to put Ukraine on the path to energy independence.”

VPL is the only legitimate entity entitled to act within the HSA to explore and develop the Prykerchenska Shelf of the Black Sea. Ever since the government of Ukraine unilaterally revoked VPL’s HSA, the company has not received any official requests from the Ukrainian government to enter into negotiations. For its part, between May and July 2008, VPL has sent numerous requests for dialogue to the Cabinet of Ministers of Ukraine. These requests have all gone unanswered. As a result, and with no further recourse, VPL pursued its rights under the HSA to initiate international arbitration proceedings against the State of Ukraine at the Arbitration Institute of Stockholm.

VPL has initiated arbitration proceedings because the Government of Ukraine has failed to comply with its commitments under the HSA signed on October 19, 2007. VPL is committed to fulfilling its obligations under the HSA and has all the technical and material resources needed to explore the Prykerchenska shelf.

Company Information

Vanco Prykerchenska Ltd. (VPL) is a subdivision of Vanco International Company, which is a subsidiary of Vanco Energy Company. Mr. Gene Van Dyke is the owner and the president of Vanco. VPL is engaged in geological survey and exploitation of gas and oil seabed deposits within the Prykerchenska shelf of the Black Sea (the project). The project includes exploration and exploitation of three prospective areas: Sudak plicate zone (north-east), Sudak deep-water plicate zone and the Tetyaev area. The total area of the project is 12,960 sq. km, and includes depths from 70 to 2200 m. The project will be implemented in two stages: prospecting work and exploitation and extraction. The total investments into the project will amount up to $15 billion. Investors of the project are Ukraine’s DTEK, Integrum Technologies, Ltd. and Shadowlight Investments, Ltd.

Vanco Energy (Vanco) is an independent gas and oil company, engaged in geological survey and exploitation of gas and oil deposits. Vanco Company has experience of the whole range of prospecting and exploration works, including geological survey to determine perspective structures and locations for exploratory and prospecting wells, engineering, operational and boring operations. In the course of its activity Vanco Company cooperated with leading energy companies as such as Lukoil, ExxonMobil, Hydro, Nexen, Shell. Over the past decade, Vanco has conducted twelve detailed 2D seismic explorations on the total area of over 25 000 sq. km, as well as nine 3D seismic explorations on the total area of about 19 000 sq. km. Along with Total / Unocal, Vanco Company engaged in drilling of 4 deep-water wells in Gabon. In particular, the world record was set on Gabon Judji-1 well — drilling at the 2791 m sea depth. Together with Nexen, Vanco Company drilled 2 deep-water wells in Equatorial Guinea. Vanco Company was an independent operator in drilling deep-water wells in Morocco (2125 m) and Cote d’Ivoire (1735 m).

Vanco Prykerchenska Ltd.

CONTACT: Vanco Prykerchenska Ltd. Press Office, Natalya Olbert-Sinko,nolbert@prp.com.ua, or Julia Bagmut, +8-044-495-29-60, jbagmut@prp.com.ua




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