Urals Energy reorganises subsidiaries, sees tax advantages

AIM-listed Urals Energy has completed an international reorganisation of its subsidiaries which will streamline the management of the group and allow it to gain "modest tax advantages".

The exploration and production company said its operating company on Sakhalin Island and principal profit and cash generator, GJSC Petrosakh, has been merged with Urals Energy LLC, the Russia-incorporated management company for all of the group's operations, which is essentially a cost centre.

"As a result of this merger, the board believes that the group will be able to offset the costs of Urals Energy LLC against the future profits of GJSC Petrosakh's operations for tax purposes.

"Previously, Russian tax rules have not allowed the group to charge management fees between Group companies and this has added to the tax losses in Urals Energy LLC."

At 1423 BST, the shares were up 4.2% to 7.03p.