Letter of Intent to Acquire Slavneft Drilling Assets

Under the terms of the agreement, EDC will acquire the following businesses operating in Western and Eastern Siberia: “Megionskoye Upravlenie Burovykh Rabot” LLC, “Ob geologia” LLC, “Megion geologia” LLC and “Baykitskaya Neftegazorazvedochnaya Ekspeditsia” LLC.
In addition, Slavneft and EDC have agreed to develop a Framework Agreement for the provision of drilling services by EDC to Slavneft following the acquisition. The Framework Agreement is expected to cover a five year term commencing at the completion of the transaction and includes pricing terms, annual price adjustment provisions and commitments for drilling volumes.
Alexander Djaparidze, Chief Executive Officer of EDC, said: “The transaction is in line with our strategy of complementing our organic growth with the aquisition of high quality operations. This new partnership with Slavneft is another important step in expanding our customer base.”     
EDC is the largest independent provider of onshore drilling services in Russia, as measured by the number of meters drilled, providing onshore integrated well construction services and workover services. In addition, the Company provides offshore drilling services in the Caspian Sea. The Company offers its onshore integrated well construction services and workover services to local and international oil and gas companies primarily in Russia and its offshore drilling services to Russian and international oil and gas companies in the Russian, Kazakh and Turkmen sectors of the Caspian Sea. The Company is traded on the London Stock Exchange under the symbol “EDCL”.