UKRAINE: VANCO PRYKERCHSNSKA LTD FILES FOR INTERNATIONAL ARBITRATION IN STOCKHOLM

Vanco Prykerchenska LTD Press office
Kyiv, Ukraine, Wednesday, July, 16, 2008

KYIV, UKRAINE - Today "Vanco Prykerchenska Ltd" commenced arbitration proceedings against the State of Ukraine in the Arbitration Institute of Stockholm, Sweden.

VPL is seeking international arbitration because Ukraine, and its government headed by Prime Minister Yulia Tymoshenko, has failed to comply with its commitments under the Hydrocarbons Sharing Agreement (HSA) to be extracted within the Prykerchenska subsoil block of the Black Sea continental shelf signed on October 19, 2007.

The 60-day pre-arbitration negotiation period between VPL and the State of Ukraine expired on July 7, 2008.

Jim Bown, President of "Vanco Prykercheska Ltd" said: "We are committed to Ukraine's energy independence that would be reached through the realization of this HSA.  We remain open to dialog with the Government of Ukraine to resolve issues concerning the HSA, but have also chosen to pursue our right to protect our investments through the Arbitration Institute of Stockholm, as specified by the HSA with the Ukrainian Government"

INFORMATION

'Vanco Prykerchenska Ltd.' 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 Energy. "Vanco Prykerchenska Ltd." is engaged in geological survey and exploitation of gas and oil seabed deposits within the Prykerchenskyj 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 Tetyaev area. The total area of the project is 12 960 sq. km, sea depth is 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 DTEK, Integrum Technolo?gies 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 prospecring wells, engineering, operational and boring operations.

In the course of its activity Vanco Company cooperated with such companies as Lukoil, ExxonMobil, Hydro, Nexen, Shell. During the last 10 years Vanco Company 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 (a well at the sea depth of 2125 m) and Cote d'Ivoire (a well at the sea depth of 1735 m).
-----------------------------------------------------------------------------------------
'Vanco Prykerchenska LTD' Press office, Kyiv Natalya Olbert-Sinko; nolbert@prp.com.ua

Julia Bagmut; jbagmut@prp.com.ua
Phone: 8 044 495 29 60