The Board of Urals Energy announced, that it has completed an internal reorganization of its subsidiaries, which is intended to streamline the management of the group and allow the group to take advantage of modest tax advantages. As part of the internal reorganization, GJSC Petrosakh, the Group's operating company on Sakhalin Island and principal profit and cash generator, 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.