RussOil Corp. (Nasdaq Bulletin Board: RUSO) is a US-based oil and gas company with 100% of its assets located in Siberia, Russia. RussOil is currently in negotiations to make its first major acquisition, the Gorstovoe deposit currently controlled by Smolenergy. The Gorstovoe oil field, is located in the southeastern part of the West Siberian lowlands, lies between the Traygorodskaya and Big Okunevka rivers and is 45 km to the west of the town of Strezhevogo. It is near highways and two major pipelines, as well as several industrial towns from which oil workers are employed.
The estimated total potential of C1+C2 crude oil within the Gorstovoe deposit is 6,063 million tons. If the project is completed as planned, by 2010 one million tons of oil per year will be produced. With only six bore holes drilled, it is likely that additional resources will be added to the deposit's total once completely exploration has been finished.
RussOil plans to bring the Gorstovoe field into production via a five-stage process, ramping from seven wells in 2007 to 13 in 2008, 36 in 2009, and 90 in 2010. The project's payback period for initial financing is expected to be five years, assuming $438/ton oil and conservative oil production estimates of 20 tons/day.
Stratgy
The company’s core concept is to produce oil, develop oil fields, and conduct oil exploration. Additionally, RussOil aims to enhance the value of existing assets, improve profitability and acquire assets with proven reserves and development potential.
The company is pursuing a strategy of seeking investment and acquisition opportunities in Russia and Eastern Europe with the goal of providing Western investors with access to a portfolio of natural resource licenses and operating companies.
Industry
Russia ended 2006 with its eighth straight year of growth, averaging 6.7% annually since 1998. Although high oil prices and a relatively cheap ruble initially drove this growth, since 2003 consumer demand and, more recently, investment have played a significant role. Over the last five years, fixed capital investments have averaged real gains greater than 10% per year and personal incomes have achieved real gains more than 12% per year. During this time, poverty has declined steadily and the middle class has continued to expand. Russia has also improved its international financial position; the federal budget has run surpluses since 2001 and ended 2006 with a surplus of 9% of GDP.
Oil and natural gas deposits, as well as extraction and refinery capacities, are situated mainly in Western Siberia. Tyumen city is considered an unofficial capital of oil- and gas-bearing Siberia. Siberian oil and gas are the main sources of fuel and energy not only for Russia, yet for other countries of CIS as well. About 25 % of oil and gas extracted is intended for export, which gives Russia over 3/4 of its hard currency receipts.
* Oil export earnings have allowed Russia to increase its foreign reserves from $12 billion in 1999 to some $315 billion at yearend 2006, the third largest reserves in the world.
* Foreign direct investment rose from $14.6 billion in 2005 to an estimated $30 billion in 2006.
* U.S. exports to Russia climbed by 20 percent last year to $4.7 billion.
* Russian exports to the United States totaled $19 billion in 2006, a 30 percent increase from the year before.
* In 2006, Russia's GDP grew 6.6%, while inflation was below 10% for the first time in the past 10 years.
* Oil, natural gas, metals, and timber account for more than 80% of exports and 32% of government revenues.
Since the 1960s vast deposits of petroleum and natural gas have been discovered along the Vilyui River in the Russian republic of Sakha (Yakutia) in eastern Siberia and in western Siberia between the Ob’ and Yenisey rivers. In western Siberia, the city of Tyumen’ serves as a gateway to the oil fields of Samotlor and the natural gas reserves of Urengoy. The cities of Tomsk and Tobol’sk have huge petrochemical complexes.
* Siberia is a treasure trove of natural resources, with huge deposits of oil, gas, and minerals and vast stands of timber.
* Vast oil and gas deposits constitute Siberia’s most valuable natural resources.
* Siberia is bounded on the west by the Ural Mountains; on the north by the Arctic Ocean; on the east by the Pacific Ocean and the Bering Strait; and on the south by China, Mongolia, and the hills of north central Kazakhstan.
* The name Siberia comes from the Tatar term Sibir, meaning 'sleeping land.'
Company
The company’s offices are located on Park Avenue in New York City, and its common stock is traded OTC under the symbol RUSO. In addition, Russoil trades on the Frankfurt exchange under the symbol DQA1 (WKN A0MSKW).
Management
Silvestre Hutchinson – CEO
Silvestre Hutchinson studied Industrial and Technical Engineering and is the former Director of Bilateral International Economic Relations at the Ministry of Foreign Affairs of the Republic of Panama. Presently, Mr. Hutchinson is Vice President of The Bayano Foundation and the General Manager of Hutch-Lewis Consultants.
Evgeniy Fidotov – President
Evgeniy Fedosov Vasiliyevich is currently the General Director of Smolenergy
1-Jun-2007
Entry into a Material Definitive Agreement, Financial Statements and Exhibits
Item 1.01. Entry into a Material Definitive Agreement.
Pursuant to a Share Exchange Agreement dated as of May 31, 2007 (the "Combination Agreement"), by and among Russoil Corporation (the "Company"), OJSC Smolenergy ("Smolenergy") and the stockholders of Smolenergy (the "Stockholders"), the Company will receive all of the issued and outstanding capital stock of Smolenergy from the Stockholders in exchange for 51% of the issued and outstanding capital stock of the Company. The closing of the combination is subject to the satisfaction of certain conditions including, but not limited to (i) the Company's satisfactory due diligence of Smolenergy, its business, management and financial; (ii) legal requirements; and (3) Smolenergy's delivery to the Company of financial statements accurately prepared according to U.S. GAAP, SEC Regulation S-X and the Sarbanes Oxley Act. No assurances can be given when, if ever, the combination will close.
Smolenergy is a privately held company organized under the laws of the Russian Federation that has informed the Company that it is engaged in the exploration and development of oil and gas wells in SouthWestern Siberia.
Upon a closing of the combination, the Smolenergy Stockholders will control the Company's Board of Directors and under certain conditions, will be able to increase their holdings in the Company by an additional twenty (20%) percent.
The foregoing description of the Share Exchange Agreement is qualified in its entirety by the full text of the Agreement attached as Exhibit 99.1 to this Current Report on Form 8-K.
RUSO (OTCBB, $1.67): RussOil Completes Definitive Purchase Agreement with Smolenergy
Thursday May 31, 6:00 pm ET
NEW YORK--(BUSINESS WIRE)--RussOil Corp. (OTCBB:RUSO - News) announced today that it has executed a definitive purchase agreement with OSJC Smolenergy, an oil and gas company with 100% of its assets located in Siberia, Russia.
Under the terms of the agreement, Russoil will acquire 100% of Smolenergy in consideration of 110,000,000 restricted shares of Russoil common stock. Upon completion of the transactions contemplated by the agreement, Smolenergy is to become a wholly-owned operating subsidiary of Russoil, with current management of Smolenergy continuing to run day-to-day operations of the company. The closing is subject to the delivery of audited financial statements of Smolenergy, legal requirements and other customary closing conditions.
According to Smolenergy, it has a license to the Gorstovoe oil deposit, located in the southeastern part of West Siberia. The deposit's license, 1315/TOM/11289NE, runs from August of 2002 to March of 2014. According to the license, the proven reserves are 66 million barrels and the estimated probable reserves are 154 million barrels. As per the unaudited financial statements supplied by Smolenergy, revenue to date is over US $40 million. With only six bore holes drilled on the deposit, Smolenergy strongly believes additional resources will be added to Gorstovoe's total reserves as additional exploration is completed.
"We are very excited by the prospects of the combination between Russoil and Smolenergy. The planned combined firm is to have both the access to western capital markets necessary to fund the development of Smolenergy's oil and gas deposit while also having all the resources in place to successfully complete the project," states Russoil Corp. CEO Mr. Silvestre Hutchinson.
www.russoilcorp.com.
Contact:
RUSSOIL CORPORATION
230 Park Avenue
10th Floor
New York, NY 10017
Tel. 212-551-1474
Fax 212-808-3020
info@russoilcorp.com
Press:
REVsolutions LLC
Elena Furman, 917-202-1445
Corporate Profile
Trading Info
USA:
Exchange: OTC
Symbol: RUSO
CUSIP: 78307Y10
Frankfurt:
Symbol: DQA1
WKN AOMSKW
Transfer Agent
Island Stock Transfer
100 Second Avenue South, Suite 104N
St. Petersburg, Florida 33701
Phone: 727-289-0010
Fax: 727-289-0069
www.islandstocktransfer.com
Legal Council
Gusrae, Kaplan, Bruno & Nusbaum PLLC
120 Wall Street
New York, NY 10005
Phone. 212-269-1400
Fax: 212-809-5449
Auditors
Wolinetz, Lafazan & Company PC
5 North Village Avenue
Rockville Centre, New York 11570
Phone: 516-536-5753
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