Volga Gas plc
Annual Report  
and Accounts 201 4
VOLGA GAS PLC  |  ANNUAL REPORT AND ACCOUNTS 2014 Karpensky
Vostochny
Makaroyskoye
Dobrinskoye
Russia
Moscow
Karpensky
Vostochny
Makaroyskoye
Dobrinskoye
BLACK 
SEA
Contents
Introduction
1 Overview of 2014
2 Volga at a Glance
Strategic Report
4 Chairman’s Statement
5 Financial Highlights
6 Chief Executive’s Report
8 Operational Review
10 Financial Review
12 Principal Risks and Uncertainties
Governance
14 Board of Directors
16 Corporate Governance Statement
18 Report of the Directors
21 Directors’ Remuneration Report
Financial Statements
23 Independent Auditor’s Report
24  Group Income Statement & Group 
Statement of Comprehensive Income
25 Group Balance Sheet
26 Group Cash Flow Statement
27 Company Balance Sheet
28 Company Cash Flow Statements
29  Group and Company Statements of  
Changes in Shareholders’ Equity
30  Notes to the IFRS Consolidated 
Financial Statements
45 Notice of Meeting
47 Glossary of Technical Terms
48 Corporate Directory
Volga Gas plc is an independent oil and gas 
exploration and production company focused 
on the Volga Region of Russia. It has 100% 
interests in four oil and gas exploration and 
production licences in the Saratov and 
Volgograd regions.
VOLGA GAS PLC  |  ANNUAL REPORT AND ACCOUNTS 2014 Karpensky
Vostochny
Makaroyskoye
Dobrinskoye
Russia
Moscow
Karpensky
Vostochny
Makaroyskoye
Dobrinskoye
BLACK 
SEA
Overview of 201 4
 — Sustained throughput at over 500,000 cubic metres 
per day at the Dobrinskoye gas processing plant
 — Increased annual production by 45%
 — Record levels of revenue and EBITDA
 — Net cash increased from US$8. 1 million to 
US$15.8 million
STRATEGIC  
REPORT
GOVERNANCE FINANCIAL 
STATEMENTS
01 VOLGA GAS PLC  |  ANNUAL REPORT AND ACCOUNTS 2014 Dobrinskoye gas processing plant
2014 Progress
Completed the final phase of the gas 
plant upgrade, increasing processing 
capacity to 1 million cubic metres per 
day (35.3 million cubic feet per day).
2015 Objectives
Complete an engineering study for a 
further upgrade to the gas processing 
plant for extraction of liquid petroleum 
gases (“LPG”).
Vostochny Makarovskoye 
(“VM”) gas/condensate field 
2014 Progress
Commenced drilling of new well, VM#3.
2015 Objectives
Complete drilling of well VM#3, 
sidetrack VM#4 and drill VM#5 to 
increase production capacity and utilise 
the full gas plant capacity.
During 2014 Volga Gas achieved its first full 
year of production at full operational 
capacity of its gas/condensate wells, laying 
the foundation for sustained production 
from its principal fields.
Volga at a Glance
Our assets are located in an established oil and gas 
province. The area benefits from the existing rail, road 
and pipeline infrastructure and proximity to Russia’s  
main energy markets.
Panorama of the Dobrinskoye gas processing plant.
02 VOLGA GAS PLC  |  ANNUAL REPORT AND ACCOUNTS 2014 Dobrinskoye gas/ 
condensate field
2014 Progress
Managed production from the two 
existing wells.
2015 Objectives
Continue to maintain production from 
the two existing wells to maximise 
long-term extraction of gas and 
condensate.
Uzenskoye and Sobolevskoye 
oil fields
2014 Progress
Managed Uzenskoye production for the 
sixth year, with production constrained 
to prevent water cut. 
2015 Objectives
Maintain/enhance production profile 
and maximise extraction of oil from 
existing wells. Possible re-drill of 
Sobolevskoye to tap undeveloped 
reserves.
Exploration activity
2014 Progress
Identified potential shallow exploratory 
targets in the Karpenskiy Licence Area.
2015 Objectives
Potential discretionary exploration 
drilling of shallow, supra-salt targets 
during 2015–16.
STRATEGIC  
REPORT
GOVERNANCE FINANCIAL 
STATEMENTS
03 VOLGA GAS PLC  |  ANNUAL REPORT AND ACCOUNTS 2014 Aleksey Kalinin
Chairman
Dear Shareholder,
2014 was a significant year for Volga Gas, in 
which the Group achieved its first full year of 
gas and condensate production with its wells 
producing up to their current capacity. The 
average production rate for 2014 was 4,244 
barrels of oil equivalent per day (“boepd”), a 
43% increase over the average 2,965 boepd 
achieved in 2013. With strong cash 
generation arising from this production, it 
was gratifying to see the financial position 
strengthen sufficiently for the Company to 
make its first interim dividend payment and 
still report a significant increase in net cash 
during the year.
The Group now faces a number of challenges, 
not the least of which is the general 
economic situation in Russia, where the 
dramatic fall in international oil prices is likely 
to have a significant impact on the domestic 
economy at least in the short term. While the 
weakness of the Russian Ruble, largely 
matching the drop in the oil price, is likely to 
enable the Group’s profitability to be 
maintained, our profits for future periods as 
reported in US Dollars may be significantly 
lower than in recent years. The declining 
Ruble has also led to a significant shrinking of 
the Group balance sheet as assets have been 
adjusted to the exchange rate prevailing on 
31 December 2014.
Since the year end production based taxes 
have increased significantly – especially as 
applied to condensate, which hitherto had 
been taxed at a rate comparable to gas, but is 
now taxed closer to the level applied to oil. 
While there is nothing that can be done by 
the Group to change the tax rates, 
management is considering ways to optimise 
the business. A key project that is currently 
under consideration is the installation of 
additional units at the Dobrinskoye gas plant 
to extract liquid petroleum gases (“LPG”). 
Initial studies suggest that this could be a 
rewarding investment for the Group and a 
significant enhancement to the value of the 
reserves. More details on this can be found in 
the Chief Executive’s report on page 6 and in 
the Operational Review on page 8.
Most importantly, Volga Gas benefits from 
low operating costs and, with its fields based 
close to market, is able to operate profitably 
even with significantly reduced oil and gas 
prices. The strong balance sheet, with no 
debt and a liquidity position of US$15.8 
million built up from retained cash flow, 
provides a solid foundation for the Group to 
continue the development of its fields and to 
maximise its production profile.
The Group holds significant proven reserves 
in its three principal fields. These fields form 
the basis of sustainable and growing 
production in the near term. Our fields are 
advantageously located and our costs are 
sufficiently low for us to achieve positive 
returns at current oil and gas prices. Most 
importantly, these assets provide a strong 
platform for the Group to grow in the future, 
both through successful exploration and by 
selective value accretive acquisitions.
The Board believes that Volga Gas has a 
strong asset base and the financial and 
operational capability to develop and extend 
these assets to provide long-term value 
growth for our shareholders.
In the light of the current financial conditions 
prevailing in Russia and given the Group’s 
requirement to fund the proposed LPG 
project, which as outlined by the Chief 
Executive on pages 6 and 7 is expected to 
enhance the profitability of the Group’s gas 
and condensate production, the Board has 
decided that it is in the best interests of the 
shareholders for a final dividend to be at a 
level which can be sustained and grown as 
the profits increase in the future. Accordingly, 
the Board is recommending a final dividend 
of US$0.0125 per ordinary share bringing the 
total dividend for the year to US$0.05 per 
ordinary share.
You will be aware that in June 2014 the Board 
was exploring strategic options for the 
business, including seeking potential offerors 
for the Company by means of a “formal sale 
process” under which the Board of Volga Gas 
is able to have discussions with third parties 
interested in such a transaction on a 
confidential basis. Whilst there was some 
interest received, the subsequent 
developments in the external conditions led 
the Board to conclude that an acceptable 
proposal would not be received. The formal 
sale process was accordingly concluded in 
January 2015. The Board continues to seek to 
maximise the value of the Company for 
shareholders.
Aleksey Kalinin
Chairman
Chairman’s Statement
04 VOLGA GAS PLC  |  ANNUAL REPORT AND ACCOUNTS 2014 Revenues up 14% to US$39.4 million (2013: US$34.6 million)
 — 10% increase in oil and condensate volumes
 — 81% increase in gas sales volumes
EBITDA up 18% to US$17 .4 million (2013: US$14.8 million)
 — Production costs reduced to US$5.04 per barrel of oil equivalent 
(2013: US$5.56/boe)
 — Lower Mineral Extraction T axes on gas compared to oil
Profit before tax of US$16.3 million (2013: US$9.6 million)
 — No exploration or asset impairment charges in 2014 
(2013: US$ 3.9 million)
 — Other income (mainly foreign exchange) gain of US$3.3 million 
(2013: US$1.6 million)
Net operating cash inflow of US$16.2 million  
(2013: US$15.4 million)
 — Cash generation reflecting EBITDA
Net cash increased to US$15.8 million at 31 December 2014 
(2013: US$8.1 million)
 — Cash used in capital expenditure decreased to $5.5 million 
(2013: US$6.2 million)
 — After payment of interim dividend of US$3.0 million in 
October 2014
Maiden dividend paid in 2014 (2013: nil)
 — Interim cash dividend of US$0.0375 per ordinary share paid in 
October 2014
 — Final dividend of US$0.0125 per ordinary share proposed
Financial Highlights
Revenue growth
US$39.4M
2014 US$39.4m
2013 US$34.6m
EBITDA growth
US$17.4M
2014
2013
US$17.4m
US$14.8m
Pre-tax profit
US$16.3M
2014
2013
US$16.3m
US$9.6m
Cash net of bank debt
US$15.8M
2014
2013
US$15.8m
US$8.1m
STRATEGIC  
REPORT
GOVERNANCE FINANCIAL 
STATEMENTS
05 VOLGA GAS PLC  |  ANNUAL REPORT AND ACCOUNTS 2014 As the Chairman has noted, 2014 was the first 
full year in which Volga Gas produced its gas 
and condensate wells at capacity with the gas 
plant operating fully to expectations and 
enabling the Group to record a 43% increase 
in production compared to 2013. This 
increased production combined with steady 
oil and gas prices – at least for the first ten 
months of 2014 – enabled the Group to enjoy 
strong cash flow and strengthen its financial 
position, while providing the flexibility to 
manage the effects of the subsequent 
downturn in international oil prices.
As detailed in the Operational Review on 
pages 8 and 9, the majority of the work on 
our producing assets base remained focused 
on our main field, Vostochny Makarovskoye 
(“VM”). On VM, the Group commenced the 
drilling of a new producing well, VM#3. 
Although, as detailed below, the well was not 
completed during 2014, we now expect it to 
be producing in mid-2015.
Crude oil production, on the other hand, 
continued to decline. Production from the 
Uzenskoye field was further reduced to 
prevent a rising water cut. In addition, 
production from the single well Sobolevskoye 
field ceased. While it is now a minor part of 
the Group’s business, Volga Gas had made 
very good returns from these assets and 
continues to benefit from the cash 
generation they provide.
In 2014 as in 2013, exploration activity was 
limited, although a number of significant 
exploration prospects in the Group’s 
Karpenskiy licence area have been identified 
for future exploration drilling.
2015 Objectives – VM Development and 
LPG Project
The Group’s key operational objectives in 
2015 are to complete the drilling of the VM#3 
and VM#4 wells on the VM field and to 
complete the Front End Engineering and 
Design work for an LPG extraction project. 
The aim is to increase production from the 
VM field so as to maximise the utilisation of 
the 1 million m
3
 per day (35 mmcf/d) 
processing capacity of the gas plant.
Based on initial studies, the LPG project could 
enable the Group to achieve a significant 
enhancement of the value of the gas plant 
output and the investment required for this 
could be recovered within three years from 
the increased income and improved 
profitability.
Finance
The Group maintained a strong level of cash 
generation from operating activities 
throughout 2014, enabling it to fund its 
capital expenditure for the year from 
operating cash flow and to make its maiden 
interim dividend payment of $0.0375 per 
ordinary share in October 2014, while 
increasing its cash balance from US$8.1 
million to US$15.8 million during the year.
Capital expenditure in 2014 was less than 
originally planned mainly because the 
operational difficulties experienced on 
drilling the VM#3 well led to a delay in the 
completion of that well and deferral of 
further drilling into 2015.
Although the planned field development 
expenditures in 2015 and beyond are 
expected to be funded from operating cash 
flow, the Group may consider a moderate 
level of borrowing to be appropriate to fund 
significant value accretive investments like 
the LPG project.
Current trading
As announced on 19 February 2015, during 
January and February 2015 disruption to the 
domestic oil market in Russia following the 
recently implemented tax changes had an 
impact on the ability of purchasers of 
condensate from Volga Gas to take delivery 
and subsequently led to the temporary 
suspension of production at the Company’s 
VM and Dobrinskoye gas fields. Consequently 
for this period actual production was 
significantly below the capacity of the fields. 
Since 16 February 2015, Group production 
has resumed at close to full production 
capacity of approximately 4,500 barrels of oil 
equivalent per day (“boepd”).
The major tax changes implemented at the 
start of 2015 included a significant reduction 
in the rate of export tax coupled with a rise in 
Mineral Extraction Taxes on oil and 
condensate. However the domestic market 
prices in Russia, which hitherto reflected full 
netback pricing, have not risen to match the 
drop in export taxes. Meanwhile MET charges 
are calculated with reference to export prices 
and this has led to the Group experiencing 
higher than anticipated MET charges relative 
to income since the start of 2015.
Chief Executive’s Report
Mikhail Ivanov
Chief Executive Officer
06 VOLGA GAS PLC  |  ANNUAL REPORT AND ACCOUNTS 2014 Condensate sales loading point.
Gas processing trains.
Dobrinskoye gas plant.
Outlook
It is our current expectation that the VM#3 
well will be completed during H1 2015. In 
addition, we have mobilised a second rig to 
drill a sidetrack to the VM#4 well, which was 
originally drilled in 2008 but was not 
productive. The sidetrack will be deviated 
towards the centre of the field where it is 
expected to intersect productive reservoir. 
Further drilling, notably the VM#5 well, is 
also anticipated for later in 2015. Assuming 
successful drilling of the new wells, 
management expects to increase production 
to above 5,000 boepd by the end of 2015.
Clearly with significantly lower oil prices and a 
sharply devalued Ruble, the revenues as 
reported in US Dollars would not reflect this 
progress. However, with its costs almost 
entirely in Rubles, the Group is expected to 
remain profitable and cash generative even 
without a significant recovery in oil prices and 
in spite of the increased rate of production 
taxes that have come into effect.
The total capital expenditure budgeted for 
2015 is approximately US$14 million. All of 
this expenditure is discretionary and can be 
deferred or cancelled if necessary. 
Management expects the 2015 capital 
expenditure to be funded entirely from 
existing cash resources and cash generated 
from operations.
We look forward to delivering a rising stream 
of production and further financial growth.
Mikhail Ivanov
Chief Executive Officer
STRATEGIC  
REPORT
GOVERNANCE FINANCIAL 
STATEMENTS
07 VOLGA GAS PLC  |  ANNUAL REPORT AND ACCOUNTS 2014 VM#1 well workover in operation
Operations overview
After the Group received formal approval of 
the upgrade works at the Dobrinskoye gas 
processing plant in November 2013, 
production of gas and condensate from the 
Group’s VM and Dobrinskoye fields increased 
to reflect their existing productive capacity, 
more than doubling the production rates 
achieved hitherto.
The overall level of production in 2014, at 
4,244 boepd, was 43% above the 2,958 
boepd achieved in 2013. This was driven by 
increased gas and condensate production 
from the VM and Dobrinskoye fields partly 
offset by declines in total oil production.
Average oil production was lower in 2014 than 
in 2013, averaging 689 bopd in 2014 compared 
to 826 bopd in 2013. The reasons for the 
decline in oil production are detailed below.
As a consequence of the significant increase 
in production in 2014, revenues and EBITDA 
levels in 2014 were well ahead of 2013, 
although with the rapidly increasing 
proportion of gas in the mix, the revenue 
growth was not quite as impressive as 
production growth. Full details are discussed 
in the Financial Review on page 10.
Gas processing plant
Since November 2013, the Dobrinskoye gas 
processing plant has been consistently 
operating at rates of over 500,000 cubic 
metres per day (17.7 million cubic feet per day 
(“mmcf/d”)) with the exception of periods of 
planned shut-down for maintenance. During 
2014 a number of minor additional modules, 
as required by the state construction agency, 
Gosstroi, were installed on the plant. During 
2014 the Group incurred approximately 
US$2.7 million (2013: US$ 3.6 million) of 
capital expenditure on the gas plant.
During 2014, the Group has also been 
investigating means of enhancing the gas 
processing by the use of alternative 
chemicals. Following successful trials 
conducted during the year modifications to 
the process are beginning to deliver savings 
on the cost of chemicals used in the process.
The Group has conducted a preliminary 
evaluation of the feasibility of additional 
processing to extract an LPG stream from the 
gas, primarily propane and butane. The initial 
studies suggest that there are significant 
benefits from this project, from the 
extraction of additional higher-value product, 
that are otherwise either flared or sent down 
the gas pipeline with the sales gas. In 
addition, consideration is being given to a 
modification of the sulphur extraction 
process that would significantly reduce the 
cost of chemicals. The initial economic 
modelling suggests that the capital 
investment on this project can be recovered 
within three years from the incremental 
revenue and cost savings.
In November 2014, the Group commissioned a 
front end engineering and design study which 
will form the basis of a final investment decision 
on this project by the Board during 201 5.
Gas/condensate production
The Dobrinskoye and VM fields are managed 
as a single business unit. Production from the 
fields is processed at the gas plant located next 
to the Dobrinskoye field, extracting the 
condensate and processing the gas to pipeline 
standards before input into Gazprom’s regional 
pipeline system via an inlet located at the 
plant. Prior to November 2013 the plant was 
permitted to operate at a capacity of 250,000 
cubic metres per day (8.8 mmcf/d), so the fields 
were not producing at their full capacity. Since 
November 2013, production increased to levels 
that more closely reflect the estimated current 
production capacity of the wells which is over 
500,000 cubic metres per day (17 .8 mmcf/d) of 
gas and 120 tonnes per day (1,050 barrels per 
day(“bpd”) of condensate.
During 2014, production derived from both 
fields averaged 15.5 mmcf/d of gas and 966 
bpd of condensate (2013: 8.7 mmcf/d of gas 
and 682 bpd of condensate). In total, there 
are three producing wells on VM and two 
producing wells on Dobrinskoye.
Gas continues to be sold to Trans Nafta under 
contract at a fixed Ruble contract gas sales 
price. With the devaluation of the Ruble 
during 2014, the US Dollar equivalent of the 
price declined during 2014. The average gas 
sales price for 2014 was the equivalent of 
US$2.15 per thousand cubic feet, net of VAT 
(2013: US$2.73). During 2014 the average 
condensate sales price was US$45.07 per 
barrel (2013: US$47.00 per barrel).
Operational Review
Oil, gas and condensate reserves
Oil & 
Condensate 
(mmbbl)
Gas 
(bcf)
Total 
(mmboe)
As at 31 December 2013
Proved reserves 14.009 152.8 39.465
Proved plus probable reserves 15.313 163.7 42.591
Production: 1 January–31 December 2014 0.581 5.7 1.571
As at 31 December 2014
Proved reserves 13.428 147.1 37.894
Proved plus probable reserves 14.732 158.0 41.020
Notes:
1. There has been no external reassessment of reserves subsequent to the Miller and Lents reserve study of 2012.
2. The reserves and production numbers shown above exclude all volumes related to the Sobolevskoye field which was 
not included in the Miller and Lents reserve study of 2012. The numbers for Sobolevskoye are estimated by 
management not to be material in the context of Group reserves.
3.  The above reserve estimates, prepared in accordance with reserve definitions prepared by the Oil and Gas Reserves 
Committee of the SPE, have been reviewed and verified by Mr Mikhail Ivanov, director and Chief Executive Officer of 
Volga Gas plc, for the purposes of the Guidance Note for Mining, Oil and Gas companies issued by the London Stock 
Exchange in June 2009. Mr Mikhail Ivanov holds a MS Degree in Geophysics from Novosibirsk State University. He also 
has an MBA degree from Kellogg School of Management (Northwestern University). He is a member of the Society of 
Petroleum Engineers.
08 VOLGA GAS PLC  |  ANNUAL REPORT AND ACCOUNTS 2014 Condensate storage tanks.
Average unit production costs on the 
gas-condensate fields declined to US$6.49 
per boe in 2014 (2013: US$8.27) primarily as 
the significant element of fixed plant costs 
were spread over higher production rates. 
Management anticipates further reductions 
in unit costs as capacity utilisation rises 
towards 100%.
During 2014, the main development activity 
was the drilling of the VM#3 production well. 
Following slow progress with the drilling, it 
eventually became clear that the drilling 
contractor had encountered mechanical 
difficulties, with the drill pipe being stuck at a 
depth of 2,556 metres. Subsequent attempts 
by the drilling contractor to release the stuck 
drill pipe were not successful and operations 
were temporarily suspended in September 
2014. The Group subsequently agreed with the 
drilling contractor a cost-effective means of 
completing the VM#3 production well. 
Operations recommenced in January 2015 
with the aim of completing the well in time to 
commence production during the first half of 
2015. As the well is being drilled on a turnkey 
contract basis the cost has not been materially 
affected.
In January 2015, a second rig was mobilised 
to drill a sidetrack to the VM#4 well, which is 
currently not producing. There are, in 
addition, contingent plans to drill a further 
well, VM#5 later in 2015.
Oil production
Having completed its sixth year of full time 
production, the Yuzhny Uzenskoye oil field is 
the Group’s longest established field. It 
continues to produce under natural reservoir 
pressure drive and with minimal water cut. As 
the oil has been produced, the oil-water 
contact in the reservoir has risen and since the 
start of 2013, wells at the edge of the field 
have exhibited some water cut and were shut 
in. As a consequence, oil production from the 
field has been managed at declining 
production rates. There remains a shallower 
undeveloped reservoir which may be brought 
into production by re-using existing wells on 
the field.
In June 2013, following a successful flow test 
and workover, the Sobolevskaya #1 1 well in the 
Urozhainoye-2 licence was put on production. 
However, in August 2014 production from the 
well ceased. An undeveloped oil pool has been 
identified within the Sobolevskaya field. The 
2015 capital budget includes a sidetrack from 
the #1 1 well to develop this resource.
The Group’s oil production, whilst of modest 
scale, remains very profitable for the Group 
and a useful contributor of cash flow.
Exploration
The Group has identified a number of 
exploration targets in the Karpenskiy Licence 
Area at shallow horizons of between 1,000 
and 2,000 metres depth. These provide low 
cost opportunities to add potentially material 
oil reserves. The Group’s current priority is 
the development of its gas and condensate 
fields and a return to active exploration is to 
be considered for later in 2015 and beyond. 
The Group has fulfilled all its licence 
commitments on the Karpenskiy Licence 
Area and further drilling in the area is 
discretionary.
Oil, gas and condensate reserves as of 
1 January 2015
During 2012, an independent evaluation of 
the Company’s oil, gas and condensate 
reserves was conducted by Miller and 
Lents Ltd.
The independent assessment of the reserves 
and net present value of future net revenue 
(“NPV”) attributable to the Group’s three 
principal fields, Dobrinskoye, Vostochny 
Makarovskoye and Uzenskoye, as at 1 August 
2012, was prepared in accordance with 
reserve definitions set by the Oil and Gas 
Reserves Committee of the Society of 
Petroleum Engineers (“SPE”).
The table on page 8 shows the Proven and 
Probable reserves as evaluated by Miller & 
Lents as at 1 August 2012, adjusted by 
management for subsequent production.
Mikhail Ivanov
Chief Executive Officer
STRATEGIC  
REPORT
GOVERNANCE FINANCIAL 
STATEMENTS
09 VOLGA GAS PLC  |  ANNUAL REPORT AND ACCOUNTS 2014 Results for the year
In 2014, the Group generated US$39.4 million 
in turnover (2013: US$34.6 million) from the 
sale of 603,950 barrels of crude oil and 
condensate (2013: 547 ,257 barrels) and 5,671 
million cubic feet of natural gas (2013: 3,128 
million cubic feet). Oil and condensate sales 
were made into the domestic market during 
the period. The average price realised for 
liquids was the equivalent of US$45.07 per 
barrel (2013: US$47.63 per barrel). The gas 
sales price during 2014 averaged US$2.15 per 
thousand cubic feet (2013: US$2.73 per 
thousand cubic feet), the fall being entirely 
attributable to the devaluation of the Ruble. 
With sales made exclusively into the market 
in the Volga region at the wellhead, our oil 
and condensate sales prices reflect 
international prices, adjusted for export 
taxes and transportation costs. Production 
activities generated a gross profit of 
US$16.9 million in 2014 (2013: gross profit of 
US$16.2 million).
In 2014, the total cost of production 
increased to US$7.8 million (2013: US$5.9 
million), with the incremental costs primarily 
incurred in volume related costs at the 
Group’s gas processing plant. Production 
based taxes were US$8.3 million (2013: 
US$8.1 million) reflecting the increase in the 
proportion of gas in the Group’s production 
and lower rates of Mineral Extraction Tax 
(“MET”) charged on gas compared to crude 
oil. MET in 2014 represented 21.2% of 
revenues (2013: 23.0% of revenues). The 
gross profit margin in 2014 was 42.9% 
(2013: 46.7%).
Operating and administrative expenses in 
2014 were US$4.2 million (2013: US$4.0 
million).
The Group experienced a significant increase 
in EBITDA (defined as operating profit before 
non-cash charges, including exploration 
expense, depletion and depreciation) to 
US$17.4 million (2013: US$14.8 million) as a 
result of the higher revenues partly offset by 
higher expenses. As a reflection of the 
increasing proportion of gas in the sales mix. 
EBITDA per barrel of oil equivalent sold in 
2014 was US$11.24 (2013: US$13.81).
After recording no exploration and evaluation 
expense (2013: US$2.5 million), or other asset 
impairment expenses (2013: US$ 1.4 million) 
the Group recorded an operating profit for 
2014 of US$12.8 million (2013: US$8.2 million).
After including net interest income of US$0.2 
million (2013: net interest expense of US$0.2 
million) and other gains, predominantly from 
foreign exchange, of $3.3 million (2013: net 
other gains of US$1.6 million), the Group 
recognised a profit before tax of US$16.3 
million (2013: US$9.6 million) and reported 
net profit after tax of US$13.1 million (2013: 
US$8.6 million) after taking a deferred tax 
charge of US$3.3 million (2013: US$1.0 
million). Included in Other income in 2014 was 
a foreign exchange gain of US$3.2 million 
arising from US Dollar cash balances held by 
Russian subsidiaries which have the Ruble as 
functional currency (2013: US$0.3 million loss 
on foreign exchange).
Cash flow
Group cash inflow from operating activities 
was US$16.2 million (2013: US$15.4 million). 
Net working capital movements contributed 
to a cash inflow of US$0.5 million in 2014 
(2013: US$1.2 million outflow from working 
capital movements). With slightly lower 
capital expenditures in 2014, the net outflow 
from investing activities was US$5.5 million 
(2013: US$6.2 million). Net cash outflow from 
financing activities was US$3.0 million (2013: 
outflow of US$8.1 million).
Dividend
In July 2014, the Board announced the 
adoption of a policy to distribute 
approximately 50% of consolidated net profit 
after tax as a cash dividend. A maiden interim 
dividend of US$0.0375 per share was paid on 
24 October 2014. In light of the material 
reduction in the oil price in recent months, 
adverse financial conditions currently 
prevailing in Russia and the Group’s plans for 
significant new investment in the LPG project 
the Board has decided to restrain the level of 
dividend payments. Accordingly, the Board is 
recommending a final dividend of US$0.0125 
per ordinary share, bringing the total 
payment for the year to US$0.05 per ordinary 
share (2013: nil).
Capital expenditure
During 2014 capital expenditure of US$5.9 
million was incurred (2013: US$5.9 million). In 
both 2014 and 2013 all of the capital 
expenditure was on development and 
producing assets. The most significant 
individual components of the capital 
expenditure in 2014 relate to the 
Dobrinskoye gas plant and drilling on the 
VM field.
Balance sheet and financing
As at 31 December 2014, the Group held cash 
and bank deposits of US$15.8 million (2013: 
US$8.1 million) with no debt. All of the 
Group’s cash balances are held in bank 
accounts in the UK and Russia and the 
majority of the Group’s cash is held in 
US Dollars.
As at 31 December 2014, the Group’s 
intangible assets decreased to US$3.7 million 
(2013: US$6.4 million). Property, plant and 
equipment, decreased to US$57.8 million 
(2013: US$98.3 million), primarily reflecting 
the impact of foreign exchange adjustments.
On 9 July 2014 the capital reduction 
approved by shareholders at the Company’s 
Annual General Meeting on 6 June 2014 
became effective following confirmation by 
the High Court, the filing of the Court Order 
and a Statement of Capital with Companies 
House and the fulfilment of certain minor 
undertakings given to the Court. As a result, 
the Share Premium Account of the Company, 
amounting to US$165.9 million, was cancelled 
and the equivalent sum credited to the 
Company’s Profit and Loss Account, thereby 
creating distributable reserves.
The Group’s committed capital expenditures 
are less than expected cash flow from 
operations and cash-on-hand and such 
expenditures can be managed in light of the 
sharp reduction in international oil prices and 
the devaluation of the Ruble. The Group may 
consider additional debt facilities to fund the 
longer-term development of its existing 
licences and operational facilities as 
appropriate.
The Group’s financial statements are 
presented on a going concern basis.
Tony Alves
Chief Financial Officer
Financial Review
10 VOLGA GAS PLC  |  ANNUAL REPORT AND ACCOUNTS 2014 Five year financial and operational summary
Sales volumes 2014 2013 2012 2011 2010
Oil & condensate (barrels) 603,950 547,257 529,501 546,817 407,050
Gas (mcf) 5,671 3,128 1,193 1,348 -
Total (boe) 1,549,117 1,068,585 728,334 771,479 407,050
Operating Results (US$ 000) 2014 2013 2012 2011 2010
Oil and condensate sales 27,220 26,067 25,526 25,425 13,052
Gas sales 12,203 8,554 2,769 3,146 –
Revenue 39,423 34,621 28,295 28,571 13,052
Production costs (7,805) (5,946) (3,776) (3,126) (436)
Production based taxes (8,344) (8,095) (8,951) (9,537) (5,254)
Depletion, depreciation and other (4,656) (2,611) (2,280) (2,641) (1,037)
Other (1,709) (1,799) (1,562) (991) (113)
Cost of sales (22,514) (18,451) (16,569) (16,295) (6,840)
Gross profit 16,909 16,170 11,726 12,276 6,212
Exploration expense – (2,519) (8,475) (200) (23,937)
Provision for VAT recovery – – (2,945) – –
Operating & administrative expenses (4,157) (4,029) (6,024) (5,991) (4,773)
Write-off of development assets – (1,439) (188) (5,612) –
Operating profit/(loss) 12,752 8,183 (5,906) 473 (22,498)
Net realisation 2014 2013 2012 2011 2010
Oil & condensate (US$/barrel) 45.07 47.63 48.21 46.50 32.06
Gas (US$/mcf) 2.15 2.73 2.32 2.33 –
Operating data (US$/boe) 2014 2013 2012 2011 2010
Production costs 5.04 5.56 5.18 4.05 1.07
Production based taxes 5.38 7.58 12.29 12.36 12.91
Depletion, depreciation and other 3.01 2.44 3.13 3.42 2.55
EBITDA calculation (US$ 000) 2014 2013 2012 2011 2010
Operating profit/(loss) 12,752 8,183 (5,906) 473 (22,498)
Exploration expense – 2,519 8,475 200 23,937
DD&A and other non-cash expense 4,656 4,050 5,413 8,253 1,037
EBITDA 17,408 14,752 7,982 8,926 2,476
EBITDA per boe 11.24 13.81 10.96 11.57 6.08
STRATEGIC  
REPORT
GOVERNANCE FINANCIAL 
STATEMENTS
11 VOLGA GAS PLC  |  ANNUAL REPORT AND ACCOUNTS 2014 The Group is subject to various risks relating 
to political, economic, legal, social, industry, 
business and financial conditions.
The following risk factors, which are not 
exhaustive, are particularly relevant to the 
Group’s business activities:
Volatility of oil prices
The supply, demand and prices for oil are 
influenced by factors beyond the Group’s 
control. These factors include global and 
regional demand and supply, exchange rates, 
interest and inflation rates and political 
events. A significant prolonged decline in oil 
and gas prices could impact the profitability 
of the Group’s activities. Additionally, the 
Group’s production is predominantly sold in 
the domestic Russian markets which are 
influenced by domestic supply and demand 
factors, the level of Russian export taxes and 
regional transportation costs.
Substantially all of the Group’s revenues and 
cash flows come from the sale of oil, gas and 
condensate. If sales prices should fall below 
and remain below the Group’s cost of 
production for any sustained period, the 
Group may experience losses and may be 
forced to curtail or suspend some or all of the 
Group’s production, at the time such 
conditions exist. In addition, the Group would 
also have to assess the economic impact of 
low oil and gas prices on its ability to recover 
any losses the Group may incur during that 
period and on the Group’s ability to maintain 
adequate reserves.
The Group does not currently hedge its crude 
oil production to reduce its exposure to oil 
price volatility as the structure of taxes 
applied to oil production in Russia effectively 
reduce the exposure to international market 
prices for oil.
Oil and gas production taxes
The Group’s sales generated from oil and gas 
production are subject to Mineral Extraction 
Taxes, which form a material proportion of 
the total costs of sales. The rates of these 
taxes are subject to changes by the Russian 
government. Changes to rates which come 
into effect during 2015 will materially 
increase the rates on crude oil, condensate 
and natural gas.
Exploration and reserve risks
Whilst the Group will seek to apply the latest 
technology to assess exploration licences, 
the exploration for, and development of, 
hydrocarbons is speculative and involves a 
high degree of risk. These risks include the 
uncertainty that the Group will discover 
sufficient commercially exploitable oil or gas 
resources in unproven areas of its licences. 
Unsuccessful exploration efforts may result 
in impairment to the balance sheet value of 
exploration assets.
During 2012, the Group commissioned a 
reserve evaluation based on reporting 
standards set by the Society of Petroleum 
Engineers. If the actual results of producing 
the Group’s fields are significantly different 
to expectations, there may be changes in the 
future estimates of reserves. These may 
impact the balance sheet values of the 
Group’s Intangible Assets and the Group’s 
Property, Plant and Equipment.
Environmental risk
The oil and gas industry is subject to 
environmental hazards, such as oil spills, gas 
leaks, ruptures and discharges of petroleum 
products and hazardous substances. These 
environmental hazards could expose the Group 
to material liabilities for property damages, 
personal injuries, or other environmental harm, 
including costs of investigating and 
remediating contaminated properties.
The Group is subject to stringent 
environmental laws in Russia with regards to 
its oil and gas operations. Failure to comply 
with such laws and regulations could subject 
the Group to material administrative, civil, or 
criminal penalties or other liabilities. 
Additionally, compliance with these laws may, 
from time to time, result in increased costs to 
the Group’s operations, impact production, or 
increase the costs of potential acquisitions.
The Group liaises closely with the Federal 
Service of Environmental, Technological and 
Nuclear Resources of the Saratov and 
Volgograd Oblasts on potential 
environmental impact of its operations and 
conducts environmental studies both as 
required by, and in addition to, its licence 
obligations to mitigate any specific risk. The 
Group’s operations are regularly subject to 
independent environmental audit.
The Group did not incur any material costs 
relating to the compliance with 
environmental laws during the period.
Risk of operating oil and gas properties
The oil and gas business involves certain 
operating hazards, such as well blowouts, 
cratering, explosions, uncontrollable flows of 
oil, gas or well fluids, fires, pollution and 
releases of toxic substances. Any of these 
operating hazards could cause serious 
injuries, fatalities, or property damage, which 
could expose the Group to liabilities. The 
settlement of these liabilities could materially 
impact the funds available for the exploration 
and development of the Group’s oil and gas 
properties. The Group maintains insurance 
against many potential losses and liabilities 
arising from its operations in accordance with 
customary industry practices, but the Group’s 
insurance coverage cannot protect it against 
all operational risks.
Foreign currency risk
The Group’s capital expenditures and 
operating costs are predominantly in Russian 
Rubles (“RUR”) while a minority of costs are 
also in US Dollars. Revenues are 
predominantly received in RUR so 
consequently the operating profitability is not 
materially exposed to moderate short-term 
exchange rate movements. The functional 
currency of the Group’s operating subsidiaries 
is the RUR and the Group’s assets and liabilities 
are predominantly RUR denominated. As the 
Group’s presentational currency is the US 
Dollar, the significant devaluation of the RUR 
against the US Dollar would negatively impact 
the Group’s financial statements.
Business in Russia
Amongst the risks that face the Group in 
conducting business and operations in 
Russia are:
 — Economic instability, including in other 
countries or the global economy that 
could lead to consequences such as 
hyperinflation, currency fluctuations and 
a decline in per capita income in the 
Russian economy.
 — Governmental and political instability that 
could disrupt, delay or curtail economic 
and regulatory reform, increase 
centralised authority or result in 
nationalisations.
 — Social instability from any ethnic, 
religious, historical or other divisions that 
could lead to a rise in nationalism, social 
and political disturbances or conflict.
 — Uncertainties in the developing legal and 
regulatory environment, including, but 
not limited to, conflicting laws, decrees 
and regulations applicable to the oil and 
gas industry and foreign investment.
Principal Risks and Uncertainties
12 VOLGA GAS PLC  |  ANNUAL REPORT AND ACCOUNTS 2014  — Unlawful or arbitrary action against the 
Group and its interests by the regulatory 
authorities, including the suspension or 
revocation of their oil or gas contracts, 
licences or permits or preferential 
treatment of their competitors.
 — Lack of independence and experience of 
the judiciary, difficulty in enforcing court 
or arbitration decisions and governmental 
discretion in enforcing claims.
 — Unexpected changes to the federal and 
local tax systems.
 — Laws restricting foreign investment in the 
oil and gas industry.
Legal systems
Russia, and other countries in which the 
Group may transact business in the future, 
have or may have legal systems that are less 
well developed than those in the United 
Kingdom. This could result in risks such as:
 — Potential difficulties in obtaining effective 
legal redress in the court of such 
jurisdictions, whether in respect of a 
breach of contract, law or regulation, 
including an ownership dispute.
 — A higher degree of discretion on the part 
of governmental authorities.
 — The lack of judicial or administrative 
guidance on interpreting applicable rules 
and regulations.
 — Inconsistencies or conflicts between and 
within various laws, regulations, decrees, 
orders and resolutions.
 — Relative inexperience of the judiciary and 
courts in such matters.
In certain jurisdictions, the commitment of 
local business people, government officials 
and agencies and the judicial system to abide 
by legal requirements and negotiated 
agreements may be more uncertain, creating 
particular concerns with respect to licences 
and agreements for business. These may be 
susceptible to revision or cancellation and 
legal redress may be uncertain or delayed. 
There can be no assurance that joint 
ventures, licences, licence applications or 
other legal arrangements will not be 
adversely affected by the jurisdictions in 
which the Group operates.
Liquidity risk
At 31 December 2014 the Group had US$15.8 
million of cash and cash equivalents of which 
US$8.6 million was held in bank accounts in 
Russia. The Group intends to fund its ongoing 
operations and development activities from 
its cash resources and cash generated by its 
established operations. At 31 December 2014 
the Group has budgeted capital expenditures 
of approximately US$14 million primarily for 
the continuing development of gas and 
condensate production. The Board considers 
that the Group will have sufficient liquidity to 
meet its obligations. All current and planned 
capital expenditures are discretionary and 
may be deferred or cancelled in the light of 
the Group’s cash generation and liquidity 
position.
Through its ordinary course activities, the 
Group is exposed to legal, operational and 
development risk that could delay growth in 
its cash generation from operations or may 
require additional capital investment that 
could place increased burden on the Group’s 
available financial resources.
Capital risk
The Group manages capital to ensure that it 
is able to continue as a going concern whilst 
maximising the return to shareholders. The 
Group is not subject to any externally 
imposed capital requirements. The Board 
regularly monitors the future capital 
requirements of the Group, particularly in 
respect of its ongoing development 
programme. During 2012 management 
decided that having established a track 
record of reliable cash generation it was 
appropriate to introduce a modest 
proportion of debt into the capital structure 
and as such a loan of US$10 million was taken 
and which was fully repaid by 31 December 
2013. Management expects that the cash 
generated by the operating fields will be 
sufficient to sustain the Group’s operations 
and committed capital investment for the 
foreseeable future. Further short-term debt 
facilities may be arranged to provide financial 
headroom for future development activities.
Tony Alves
Chief Financial Officer
STRATEGIC  
REPORT
GOVERNANCE FINANCIAL 
STATEMENTS
13 VOLGA GAS PLC  |  ANNUAL REPORT AND ACCOUNTS 2014 Aleksey Kalinin Non-Executive Chairman
Mr Kalinin is a Senior Partner of Baring Vostok Capital Partners. He joined Baring Vostok in 
1999 from Alfa Capital, where he served for six years as the Director of the Department for 
Direct Investments. Aleksey represents the interests of Baring Vostok’s funds on the Board of 
Directors of a wide range of portfolio companies. He has a doctorate from the Moscow Power 
Engineering Institute, where he conducted scientific research, lectured for 12 years and served 
as the Director of the Youth Center for Scientific and Technical Creativity.
Appointed to the Board: 14 March 2007
Committee membership: Remuneration
Mikhail Ivanov Chief Executive Officer, Executive Director
Until 31 December 2014, Mr Ivanov was a Partner and Director of Oil and Gas Projects at Baring 
Vostok Capital Partners. Mr Ivanov has a long history of involvement in the oil sector. Mikhail 
worked for over ten years at Schlumberger, the international oil services company, where he 
served as head of its Iran operations and was responsible for business development in Russia. 
Prior to joining Schlumberger, he founded and headed two companies that focused on oil 
production and service. Mr Ivanov holds an MS degree in Geophysics from Novosibirsk State 
University and an MBA from the Kellogg School of Management of Northwestern University. 
He is an elected member of the Society of Petroleum Engineers.
Appointed to the Board: 14 March 2007
Committee membership: n/a
Antonio Alves Chief Financial Officer, Executive Director
Mr Alves has had experience with the independent oil and gas industry for over 20 years as one 
of the leading equity analysts covering the sector. Prior to joining Volga Gas, he was head of oil 
and gas research for KBC Peel Hunt and was closely involved with the Company’s 2007 IPO. He 
previously held positions with Investec Securities, The Bell Group International and Schroders. 
He read Mathematics at Cambridge University between 1977 and 1983 both as an 
undergraduate and a post-graduate research student.
Appointed to the Board: 12 January 2009
Committee membership: n/a
Ronald Freeman Non-Executive Director
Mr Freeman is a member of the Executive Committee of the Atlantic Council of the United 
States (Washington DC), and a past independent director on the boards of Sberbank, 
Severstal, and Troika Dialog. From 1973 to 1991 and from 1997 until his retirement from 
Citigroup as co-head of European Investment Banking in 2000, he was an investment banker 
specialising in financing and mergers and acquisition for companies in the oil and gas industry 
with Salomon Brothers, now a unit of Citigroup. From 1991 to 1997, he was head of the 
Banking Department of the European Bank for Reconstruction and Development (London).
Appointed to the Board: 14 March 2007
Committee membership: Audit, Nomination, Remuneration
Board of Directors
14 VOLGA GAS PLC  |  ANNUAL REPORT AND ACCOUNTS 2014 Stephen Ogden Non-Executive Director
Mr Ogden is a Non-Executive Director of the West African shopping mall operator Persianas. 
He was previously a Non-Executive Director of United Confectioneries (Russia), Heineken 
Russia and Metropolis Media (former Yugoslavia). Mr Ogden was Chief Financial Officer of the 
Bochkarev Brewery in St Petersburg from 1997 to 2002. Prior to becoming Chief Financial 
Officer of Bochkarev, Mr Ogden was an auditor with KPMG and PricewaterhouseCoopers, and 
Financial Controller of CS First Boston (Moscow). Mr Ogden has a joint honours degree in 
economics & politics from Durham University, England, and is a qualified British chartered 
accountant (“FCA”). Mr Ogden is a co-founder and treasurer of the charitable Rwanda Cricket 
Stadium Foundation, which is building Rwanda’s first proper cricket ground.
Appointed to the Board: 14 March 2007
Committee membership: Audit, Nomination, Remuneration
Michael Calvey Non-Executive Director
Mr Calvey is a Senior Partner of Baring Vostok Capital Partners and a Director of Baring Private 
Equity International and is on the Boards of several of Baring Vostok’s portfolio companies. He 
began working in Moscow in 1994 as one of the members of the consulting committee of the 
First NIS Regional Fund. He is a member of the investment committees of three Baring Vostok 
funds. He is also a member of the Investment Committees of the Baring Asia and Baring India 
funds. Before 1994, Mr Calvey lived in London and New York, where he worked at the 
European Bank for Reconstruction and Development (“EBRD”) and Salomon Brothers. At 
EBRD he was responsible for investments in the energy sector of Central and Eastern Europe. 
At Salomon Brothers Mr Calvey worked on mergers and acquisitions and capital market 
projects in the oil and gas sector. He is a member of the Boards of the Atlantic Council and the 
Emerging Markets Private Equity Association, and is a member of the Advisory Board of the 
Centre for International Business and Management at Cambridge University.
Appointed to the Board: 14 March 2007
Committee membership: Audit, Nomination
Vladimir Koshcheev Non-Executive Director
Mr Koshcheev currently acts as President of Joint Stock Company “NPO POG”. Until 2009 he 
was President of Pervaya Investizionno-Stroitelnaya Company LLC, Spinaker LLC. He has been 
Chairman of CJSC AKSM since 2002. Mr Koshcheev was President of Privolzhskaya Neftyanaya 
Company LLC between 2003 and 2005 and was previously a shareholder in and acted as 
President of Vesla. Mr Koshcheev received a specialist diploma from Moscow State Technical 
University in 1978 and he is a member of the Russian Academy of Natural Sciences.
Appointed to the Board: 14 March 2007
Committee membership: n/a
STRATEGIC  
REPORT
GOVERNANCE FINANCIAL 
STATEMENTS
15 VOLGA GAS PLC  |  ANNUAL REPORT AND ACCOUNTS 2014 Corporate Governance Statement
Introduction
The Board’s overriding objective is to ensure 
that the Group delivers long-term capital 
appreciation for its shareholders.
Compliance
As Volga Gas plc is quoted on the AIM market 
of the London Stock Exchange, it is neither 
required to comply with the UK Corporate 
Governance Code that was published by the 
Financial Reporting Council (the “Code”) nor 
issue a statement of compliance with it. 
Nevertheless, the Board fully supports the 
principles set out in the Code and seeks to 
follow these as best practice wherever this is 
appropriate having regard to the size of the 
Company, the resources available to it and 
the interpretation of the Code in the Quoted 
Companies Alliance Corporate Governance 
Code for Small and Mid-sized Quoted 
Companies.
Details are provided below of how the 
Company applies the elements of the Code 
that are deemed appropriate.
Board of directors
Role of the Board
The Board’s role is to provide leadership to 
the Group within a framework of prudent 
and effective controls which enables risk to 
be assessed and managed. The Board sets 
the Group’s strategic aims and ensures that 
the necessary financial and human resources 
are in place for the Group to meet its 
objectives, and reviews management’s 
performance in meeting these objectives. 
The Board sets and monitors the Group’s 
values and standards and ensures that the 
Group’s obligations to shareholders and 
other stakeholders are understood and met.
The Board has a formal schedule of matters 
reserved for its approval, including:
 — Strategic and policy considerations
 — Annual budget, including capital 
expenditure
 — Interim and final financial statements
 — Dividend policy, share buy-backs or other 
distributions
 — Management structure and appointments
 — Mergers, acquisitions, disposals
 — Capital raising
 — Significant changes in accounting policies
 — Appointment or removal of directors or 
the company secretary
Board composition
The Board currently comprises two executive 
directors and five non-executive directors, of 
whom three are deemed to be independent 
and two non-independent:
 — Aleksey Kalinin – Non-Executive Chairman
 — Mikhail Ivanov – Executive Director 
and CEO
 — Tony Alves – Executive Director,  
CFO and Company Secretary
 — Ronald Freeman – Independent 
Non-Executive
 — Stephen Ogden – Independent 
Non-Executive
 — Vladimir Koshcheev – Independent 
Non-Executive
 — Michael Calvey – Non-Executive
There is a clear division of responsibilities 
between the executive and non-executive 
directors.
Board balance and independence
The Board recognises that Messrs Kalinin and 
Calvey are not independent by virtue of their 
direct management responsibilities for the 
limited partnerships comprising Baring 
Vostok Private Equity Funds III and IV, the 
Company’s controlling shareholder 
(“Controlling Shareholder”). However, in light 
of the value, experience and contacts which 
they afford to the Company at this stage of 
its development and by virtue of the 
Relationship Agreement, which, inter alia, 
ensures that the Controlling Shareholder 
does not exercise undue influence over the 
Company or prevent it from acting 
independently of the Controlling 
Shareholder, the Board believes that the 
continued presence of Messrs Kalinin and 
Calvey on the Board is beneficial for the 
Company. Mr Kalinin also serves as Chairman 
of the Board and was not considered to be 
independent on his appointment.
Notwithstanding under the provisions of the 
UK Corporate Governance Code as a Smaller 
Company the Company meets the 
requirements to have at least two 
independent non-executives on the Board.
All directors are permitted access to 
independent professional advice in the 
course of execution of their duties, at the 
Company’s expense.
The Board has established the following 
committees:
Audit Committee
The Audit Committee was established in 
March 2007 and comprises three directors:
Mr Ogden – Chairman
Mr Freeman
Mr Calvey
The Audit Committee is responsible for 
selecting the Group’s independent auditors, 
pre-approving all audit and non-audit related 
services, reviewing with management and 
the independent auditors the Group’s 
financial statements, significant accounting 
and financial policies and practices, audit 
scope and adequacy of internal audit and 
control systems. The Audit Committee keeps 
the independence and objectivity of the 
auditor under review and a formal statement 
of independence is received from the 
external auditor each year. The audit 
committee meets at least twice each year.
Remuneration Committee
The Remuneration Committee was also 
established in March 2007 and comprises 
three directors:
Mr Freeman – Chairman
Mr Ogden
Mr Kalinin
The Remuneration Committee is responsible 
for reviewing the performance of the 
directors and for determining compensation 
of the Company’s key employees, including 
the chief executive officer, chief financial 
officer, and other key personnel as may be 
determined from time to time by the 
Remuneration Committee. The 
Remuneration Committee meets at least 
twice each year.
The Directors’ Remuneration Report is set 
out on pages 21 to 22.
16 VOLGA GAS PLC  |  ANNUAL REPORT AND ACCOUNTS 2014 Nomination Committee
The Nomination Committee was established 
in March 2007 and comprises three directors:
Mr Freeman – Chairman
Mr Ogden
Mr Calvey
The Nomination Committee is responsible for 
reviewing the structure, size and composition 
of the Board, making recommendations to 
the Board concerning plans for succession for 
both executive and non-executive directors 
including the Chief Executive and other 
senior management, preparing a description 
of the role and capabilities required for a 
particular appointment and identifying and 
nominating candidates to fill Board positions 
as and when they arise.
Board meetings
The Board met four times during the year 
ended 31 December 2014 (2013: four times) 
with the following attendance:
2014 2013
Aleksey Kalinin 4 4
Mikhail Ivanov 4 4
Tony Alves 4 4
Ronald Freeman 3 3
Stephen Ogden 4 4
Vladimir Koshcheev 3 4
Michael Calvey 4 4
Indemnification of directors
In accordance with the Company’s Articles of 
Association and to the extent permitted by 
the law of England and Wales, directors are 
granted an indemnity from the Company in 
respect of liabilities incurred as a result of 
their office. In respect of those matters for 
which the directors may not be indemnified, 
the Company maintained a directors’ and 
officers’ liability insurance policy throughout 
the financial year. This policy has been 
renewed for the next financial year.
Re-election of directors
The Company requires that all directors stand 
for re-election at intervals of no more than 
three years. Accordingly Messrs Calvey, 
Ivanov and Koshcheev will retire at the 
forthcoming AGM and will seek re-election by 
shareholders.
Internal controls
The directors acknowledge their 
responsibility for the system of internal 
controls for the Group and for reviewing its 
effectiveness.
Any system of internal control can only 
provide reasonable, and not absolute, 
assurance that material financial irregularities 
will be detected or that the risk of failure to 
achieve business objectives is eliminated.
The Group’s risk and controls framework 
covers all material risks and controls including 
those of an operational, financial, and 
compliance nature. Internal control 
procedures consist, inter alia, of formal 
delegations of expenditure authority by the 
Board to executive management, and 
controls relating to key stages of transactions 
including supplier approval, contract 
signature, and payment release.
The directors consider that the frequency of 
Board meetings and level of detail presented 
to the Board for its consideration in relation 
to the operations of the Group provide an 
appropriate process to identify, evaluate and 
manage significant risks relevant to its 
operations on a continuous basis, and this 
process is considered to be in accordance 
with the revised guidance on internal control 
published in October 2005 (“Turnbull 
Guidance”).
In addition to formal Board meetings, 
management prepare detailed financial and 
operational reports on a monthly basis which 
is disseminated and discussed within the 
Board.
Investor relations
The Company places considerable 
importance on communication with 
shareholders and engages them on a wide 
range of issues.
The Group has an ongoing programme of 
dialogue and meetings between the 
executive directors and institutional 
investors, fund managers and analysts. At 
these meetings a wide range of relevant 
issues including strategy, performance, 
management and governance are discussed 
within the constraints of the information 
already made public.
The Company is equally interested in the 
views and concerns of private shareholders 
and to this end ensures that the executive 
directors present the Company at forums 
where private investors are present.
Shareholders have the opportunity to meet 
and question the Board at the AGM which will 
be held on 5 June 2015, at which the 
Chairman, the Chairman of the Audit 
Committee and all executive directors will be 
available. The notice of the AGM is posted to 
all shareholders at least 21 working days 
before the meeting. Financial and other 
information is available on the Company’s 
website (www.volgagas.com).
By order of the Board
Tony Alves
Company Secretary
27 March 2015
STRATEGIC  
REPORT
GOVERNANCE FINANCIAL 
STATEMENTS
17 VOLGA GAS PLC  |  ANNUAL REPORT AND ACCOUNTS 2014 The directors present their report together 
with the Group’s audited consolidated 
financial statements for the period from 1 
January 2014 to 31 December 2014.
Results and dividend
The Group’s results are set out on pages 24 to 
29 and show net profit of US$13.1 million for 
the year to 31 December 2014 (2013: net 
profit of US$8.6 million). An interim dividend 
of US$0.0375 per ordinary share was paid on 
24 October 2014. The directors propose to 
pay a final dividend of US$0.0125 per 
ordinary share bringing the total payment to 
$0.05 per ordinary share for the year ended 
31 December 2014 (2013: nil). The final 
dividend will be paid on 10 June 2015, subject 
to approval at the Annual General Meeting of 
the Company on 5 June 2015, to shareholders 
on the register on 15 May 2015.
Principal activities, business review and 
future developments
Volga Gas is a public limited company 
registered in England and Wales with 
registered number 5886534, was 
incorporated in the United Kingdom on 25 
July 2006 and admitted to trading on the AIM 
market of the London Stock Exchange on 25 
April 2007. Volga Gas operates primarily 
through subsidiary companies as set out in 
Note 2.2 to the accounts. The principal 
activity of the Group is the exploration, 
development and production of its gas, 
condensate and oil fields in the Volga Region 
of European Russia. During the year, the 
Group owned 100% interests in four licence 
areas in the Saratov and Volgograd regions: 
Karpenskiy, Vostochny-Makarovskoye, 
Dobrinskoye, and Urozhainoye-2. During the 
year, the Group relinquished the exploration 
areas of the Urozhainoye-2 Licence but 
retains a portion as production licence area 
including the Sobolevskoye oil field.
The Group’s business strategy is to further 
the development of the Vostochny 
Makarovskoye field and to manage 
production on the Dobrinskoye and 
Uzenskoye fields whilst at the same time 
exploring the potentially prospective 
structures on the Group’s licence areas. The 
Group also regularly evaluates acquisition 
opportunities as part of its overall growth 
strategy.
Highlights of the Group’s activities for the 
period ended 31 December 2014 are:
 — Significant increase in production from 
the Vostochny Makarovskoye field.
 — Initiation of engineering studies for 
further upgrades to the Dobrinskoye gas 
plant, including LPG extraction.
The Group’s activities are described in greater 
detail in the Chief Executive’s Report on 
page 6 and in the Operational Review on 
pages 8 and 9. The principal risks associated 
with the Group’s activities are set out in the 
Financial Review on pages 10 to 13.
Key performance indicators
Given the nature of the business and that the 
Group has only three operating fields, the 
directors are of the opinion that further 
analysis using KPI’s is not appropriate for an 
understanding of the development, 
performance or position of our business at 
this time. The directors are of the opinion 
that the Operational Review on pages 8 and 9 
provides the relevant information.
Going concern
Having made appropriate enquiries and 
having examined the major areas that could 
affect the Group’s financial position, the 
directors are satisfied that the Group has 
adequate resources to continue in operation 
for the foreseeable future. Accordingly they 
consider it appropriate to adopt the going 
concern basis in preparing the financial 
statements as described in note 1.
Directors
The directors who served during the year 
were:
Aleksey Kalinin, Non-Executive Chairman
Mikhail Ivanov, Chief Executive Officer
Michael Calvey, Non-Executive
Tony Alves, Chief Financial Officer
Ronald Freeman, Non-Executive
Vladimir Koshcheev, Non-Executive
Stephen Ogden, Non-Executive
Messrs Calvey, Ivanov and Koshcheev will 
retire by rotation and offer themselves for 
re-election in accordance with the Company’s 
Articles of Association.
Directors’ interests
The directors serving during the year had the 
following beneficial interests in the shares of 
the Company:
ordinary shares of 1p each
31 December 
2014
31 December 
2013
Aleksey Kalinin
1
– –
Mikhail Ivanov 1,000,000 1,000,000
Tony Alves 25,000 25,000
Ronald Freeman 55,000 55,000
Stephen Ogden 205,000 205,000
Vladimir Koshcheev 419,210 469,210
Michael Calvey
1
– –
1 Mr Calvey and Mr Kalinin are Co-Managing Partners  
of Baring Vostok Capital Partners Limited, a related 
party to Baring Vostok Nominees Limited and Dehus 
Dolmen Nominees Limited. As such Mr Calvey and 
Mr Kalinin have an indirect beneficial interest in 
the Company.
Substantial shareholders
On 27 March 2015 the following parties had 
notifiable interests of 3% or greater in the 
nominal value of the Company’s issued 1p 
ordinary shares:
Number of 
shares Percentage
Baring Vostok 
Nominees Ltd
1
39,620,000 48.90
Dehus Dolmen 
Nominees Ltd
2
7,906,889 9.76
Quorum Fund Ltd 4,841,961 5.98
Zürcher Kantonal 
Bank AG 3,434,000 4.24
BNP Paribas 
Investment 
Partners S.A. 3,336,860 4.12
BlackRock 
Investment 
Management 
(UK) Limited 3,094,791 3.81
JP Morgan Asset 
Management 
(UK) Limited 2,761,720 3.41
1 Baring Vostok Nominees Ltd is a nominee vehicle 
which holds the interests of the limited partnerships 
which comprise Baring Vostok Private Equity Fund III.
2 Dehus Dolmen Nominees Ltd is a nominee vehicle 
which holds the interests of the limited partnerships 
which comprise Baring Vostok Private Equity Fund IV.
Report of the Directors
18 VOLGA GAS PLC  |  ANNUAL REPORT AND ACCOUNTS 2014 Options granted
An Executive Share Option Plan was adopted 
by the Company in July 2008 following which 
options over a total of 1,706,196 shares were 
granted to Mikhail Ivanov and to Tony Alves. 
During 2014 no further options (2013: nil) 
were eligible for vesting. The details of these 
option grants are disclosed in the 
Remuneration Report below.
Interests in contracts
There were no contracts or arrangements 
during the period in which a director of the 
Company was materially interested and 
which were significant in relation to the 
business of the Company.
Creditors payment policy and practice
The Group aims to pay all its creditors 
promptly. For trade creditors it is the Group’s 
policy to:
(i) agree the terms of the payment at the 
start of the business with that supplier;
(ii) ensure that suppliers are aware of the 
terms of the payment; and
(iii) pay in accordance with contractual and 
other obligations
Political and charitable contributions
No political or charitable contributions were 
made in the year (2013: nil).
Employment policies
The Group is committed to pursuing an equal 
opportunities employment policy, covering 
recruitment and selection, training, 
development, appraisal and promotion. The 
Group recognises the diversity of its 
employees, its customers, and the 
community at large and seeks to use 
employees’ talents to the fullest. This 
approach extends to the fair treatment of 
people with disabilities, in relation to their 
recruitment, training and development. Full 
consideration is given to staff members who 
become disabled during employment.
Employee communication
The Group is committed to effective 
communications, which it maintains through 
regular information releases and staff 
briefings. Formal communications with 
employees take place through these 
channels. With respect to the Group’s 
operations in Russia and the recruitment of 
Russian employees, announcements, 
contracts, interviews and advertisements are 
conducted in the English and Russian 
languages, as applicable.
Health, safety and the environment
The Group’s policy and practice is to comply 
with health, safety and environmental 
regulations and requirements of the 
countries in which it operates, to protect its 
employees, contractors, assets and the 
environment.
The Group closely monitors its environmental 
obligations under the terms of its licence 
agreements. In particular, portions of the 
Karpenskiy Licence Area are located in the 
Saratovskiy Federal Nature Reserve and 
Tulipannaya Steppe Natural Sanctuary, which 
are protected by Russian environmental law. 
In accordance with Russian environmental 
law, all economic activity within the 
protected area is approved by the Russian 
government. The Group has ensured that all 
its activities minimise the impact on this 
sensitive environment.
UK Bribery Act
The Company has adopted Anti-Corruption 
and Anti-Bribery Policies and a framework of 
adequate procedures for managing the Volga 
Gas Group’s responsibilities in relation to the 
UK Bribery Act 2010.
Share capital
The Company has authorised ordinary share 
capital of 330,720,100 shares of 1p each. 
Under a special resolution by the 
shareholders of the Company on 8 June 2014 
the directors have authority to allot shares up 
to an aggregate nominal value of £1,000,000 
of which £150,000 could be issued non 
pre-emptively, in accordance with sections 
570 and 573 of the Companies Act 2006. This 
authority will expire the earlier of (i) 15 
months from the passing of the Resolution, 
or (ii) the conclusion of the Annual General 
Meeting of the Company to be held in 2015.
Capital risk management
The Group’s objectives when managing the 
balance of equity and debt capital are (a) to 
safeguard the Group’s ability to continue as a 
going concern, (b) provide returns for 
shareholders and benefits for other 
stakeholders and (c) to maintain an optimal 
capital structure to reduce the cost of capital. 
In order to maintain or adjust the capital 
structure, the Group may adjust the amount 
of dividends paid to shareholders, return 
capital to shareholders, issue new shares or 
sell assets to reduce debt. To date the Group 
has been funded entirely by equity capital 
other than a US$10 million facility that was 
drawn in 2012 and repaid in full in 2013.
Corporate Governance
The Company’s statement on Corporate 
Governance can be found in the Corporate 
Governance Statement on pages 16 to 17 of 
these financial statements and form part of 
this report by reference.
Statement of disclosure of information 
to auditor
As at the date of this report the serving 
directors confirm that;
 — so far as the directors are aware, there is 
no relevant audit information of which 
the Company’s auditor is unaware; and
 — they have taken all steps that they ought 
to have taken as directors in order to 
make themselves aware of any relevant 
audit information and to establish that 
the Company’s auditor is aware of that 
information.
Auditor
The Group’s auditor, KPMG LLP has indicated 
its willingness to continue in office and a 
resolution concerning its reappointment will 
be proposed at the next Annual General 
Meeting.
Statement of directors’ responsibilities in 
respect of the Annual Report, Strategic 
Report and the Directors’ Report and the 
financial statements
The directors are responsible for preparing 
the Annual Report, Strategic Report and the 
Directors’ Report and the financial 
statements in accordance with applicable law 
and regulations.
Company law requires the directors to 
prepare Group and Parent Company financial 
statements for each financial year. As 
required by the AIM Rules for Companies of 
the London Stock Exchange they are required 
to prepare the Group financial statements in 
accordance with IFRSs as adopted by the EU 
and applicable law and have elected to 
prepare the Parent Company financial 
statements on the same basis.
Under company law the directors must not 
approve the financial statements unless they 
are satisfied that they give a true and fair 
view of the state of affairs of the Group and 
Parent Company and of their profit or loss for 
that period. In preparing each of the Group 
and Parent Company financial statements, 
the directors are required to:
 — select suitable accounting policies and 
then apply them consistently;
STRATEGIC  
REPORT
GOVERNANCE FINANCIAL 
STATEMENTS
19 VOLGA GAS PLC  |  ANNUAL REPORT AND ACCOUNTS 2014  — make judgements and estimates that are 
reasonable and prudent;
 — state whether they have been prepared in 
accordance with IFRSs as adopted by the 
EU; and
 — prepare the financial statements on the 
going concern basis unless it is 
inappropriate to presume that the Group 
and the Parent Company will continue in 
business.
The directors are responsible for keeping 
adequate accounting records that are 
sufficient to show and explain the Parent 
Company’s transactions and disclose with 
reasonable accuracy at any time the financial 
position of the Parent Company and enable 
them to ensure that its financial statements 
comply with the Companies Act 2006. They 
have general responsibility for taking such 
steps as are reasonably open to them to 
safeguard the assets of the Group and to 
prevent and detect fraud and other 
irregularities.
The directors are responsible for the 
maintenance and integrity of the corporate 
and financial information included on the 
Company’s website. Legislation in the UK 
governing the preparation and dissemination 
of financial statements may differ from 
legislation in other jurisdictions.
Electronic communications
The maintenance and integrity of the Volga 
Gas plc website (www.volgagas.com) is the 
responsibility of the directors; the work 
carried out by the auditor does not involve 
consideration of these matters and 
accordingly, the auditor accepts no 
responsibility for any changes that may have 
occurred to the financial statements since 
they were initially presented on the website.
The Company’s website is maintained in 
compliance with Rule 26 of the AIM Rules for 
Companies.
Legislation in the United Kingdom governing 
the preparation and dissemination of 
financial statements may differ from 
legislation in other jurisdictions.
On behalf of the Board
Tony Alves
Chief Financial Officer
27 March 2015
Report of the Directors continued
20 VOLGA GAS PLC  |  ANNUAL REPORT AND ACCOUNTS 2014 In common with the Board’s commitment to 
compliance with the appropriate aspects of 
the UK Corporate Governance Code, the 
Company has adopted the Principles of Good 
Governance relating to directors’ 
remuneration. The Company discloses certain 
information relating to directors’ 
remuneration in this report, which is not 
audited.
Remuneration Committee
The Company established a Remuneration 
Committee in April 2007, as set out in the 
Corporate Governance statement on 
page 16.
The Remuneration Committee advises the 
Board on Group compensation policy as it 
relates to executive directors and other key 
members of management, and may obtain 
advice from independent remuneration 
consultants appointed by the Company. The 
Remuneration Committee comprises Ronald 
Freeman (Chairman), Stephen Ogden and 
Aleksey Kalinin, who are all non-executive 
directors. Executive directors may be invited 
to attend meetings of the Remuneration 
Committee but do not vote on their own 
remuneration or incentives. The 
Remuneration Committee meets as required.
Remuneration policy
The Company’s policy is to maintain levels of 
compensation for the Group that are 
comparable and competitive with peer group 
companies, so as to attract and retain 
individuals of the highest calibre, by 
rewarding them as appropriate for their 
contribution to the Group’s performance.
Executive directors’ employment 
agreement and terms of appointment
The terms of each executive director’s 
appointment are set out in their service 
agreements. Each executive director 
agreement is based on similar terms, with no 
fixed duration. Each service agreement sets 
out details of basic salary and share options 
as applicable.
All executive director employment 
agreements can be terminated either by the 
director concerned or by the Company on 
giving six months’ notice during the first 24 
months of service and thereafter by giving 
three months’ notice.
The executive directors do not participate in 
any Group pension scheme and their 
remuneration is not pensionable. However, 
one of the executive directors has elected to 
receive part of his remuneration by way of 
contributions to a personal pension plan. The 
executive directors are eligible for payment 
of cash bonuses and participation in any 
share-based incentive plan the Board 
implements.
Basic salaries
The basic salary of each executive director is 
established by reference to their 
responsibilities and individual performance.
Non-executive directors’ terms, 
conditions and fees
The non-executive directors have been 
engaged under the terms of their letters of 
appointment. These engagements are for 
two years and can be terminated upon one 
month’s notice by either party. 
Reappointment is subject to the Company’s 
Articles of Association which provide that 
one third of the directors shall be required to 
retire each year.
Directors’ Remuneration Report
Audited information – directors’ detailed emoluments
Salary 
US$ 000
Pension 
Contribution 
US$ 000
Share Based 
Compensation 
US$ 000
Fees 
US$ 000
Aggregate 
Remuneration 
for the Year 
31 December  
2014 
US$ 000
Aggregate 
Remuneration 
for the Year 
31 December  
2013 
US$ 000
Executive directors
M. Ivanov 400 – – – 400 398
A. Alves 289 21 – – 310 310
Non-executive
A. Kalinin – – – – – –
R. Freeman – – – 50 50 50
S. Ogden – – – 50 50 50
V. Koshcheev – – – – – –
M. Calvey – – – – – –
STRATEGIC  
REPORT
GOVERNANCE FINANCIAL 
STATEMENTS
21 VOLGA GAS PLC  |  ANNUAL REPORT AND ACCOUNTS 2014 Fees
The fees paid to non-executive directors are 
determined by the Board and reviewed 
periodically to reflect current rates and 
practice commensurate with the size of the 
Company and their roles.
The remuneration of the non-executive 
directors is a matter for the Chairman of the 
Board and the Chief Executive Officer. In the 
event of the appointment of an independent 
non-executive chairman his remuneration 
would be a matter for the Chairman of the 
Remuneration Committee and the Chief 
Executive Officer.
Directors’ interests in the share capital of 
the Company
The directors’ interests in the share capital  
of the Company are disclosed in the Report 
of the Directors on page 18. There has been  
no change in the interest of any director 
between 1 January 2014 and the date of 
this report.
Directors’ share options
The Company adopted an Executive Share 
Option Plan (“ESOP”) on 14 July 2008, which 
was subsequently amended on 17 December 
2008. Under the terms of this Plan, up to a 
maximum of 2,843,661 shares (equivalent to 
approximately 5% of the then issued share 
capital) may be allocated and subject to 
performance criteria and vesting periods as 
specified by the Remuneration Committee.
During 2008, the Company granted options 
to acquire 1,137,464 ordinary shares to 
Mikhail Ivanov under the terms of the ESOP . 
The options may be exercised at a price of 
405p per share and vest in equal portions on 
May 2010, 2011 and 2012 and will remain 
outstanding until May 2017. On 17 December 
2008, Tony Alves was granted options to 
acquire up to 568,732 ordinary shares in the 
Company at an exercise price of 100p per 
share. The options vested over a period of up 
to four years subject to the satisfaction of 
performance conditions related to the 
market price of the Company’s shares. The 
vested options will remain exercisable until 
eight years from the date of grant. During 
2014, options over no further shares became 
eligible for vesting (2013: nil).
By order of the Board
Tony Alves
Company Secretary
27 March 2015
Directors’ Remuneration Report continued
22 VOLGA GAS PLC  |  ANNUAL REPORT AND ACCOUNTS 2014 We have audited the financial statements of Volga Gas plc for the year ended 31 December 2014. The financial reporting framework that  
has been applied in their preparation is applicable law and International Financial Reporting Standards (“IFRSs”) as adopted by the EU and,  
as regards the Parent Company financial statements, as applied in accordance with the provisions of the Companies Act 2006.
This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit 
work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor’s 
report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the 
Company and the Company’s members, as a body, for our audit work, for this report, or for the opinions we have formed.
Respective responsibilities of directors and auditor
As explained more fully in the Directors’ Responsibilities Statement set out on pages 19 and 20, the directors are responsible for the 
preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit, and express an 
opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those 
standards require us to comply with the Auditing Practices Board’s Ethical Standards for Auditors.
Scope of the audit of the financial statements
A description of the scope of an audit of financial statements is provided on the Financial Reporting Council’s website at 
www.frc.org.uk/auditscopeukprivate.
Opinion on financial statements
In our opinion:
 — the financial statements give a true and fair view of the state of the Group’s and of the Parent Company’s affairs as at 31 December 2014 
and of the Group’s profit for the year then ended;
 — the Group financial statements have been properly prepared in accordance with IFRSs as adopted by the EU;
 — the Parent Company financial statements have been properly prepared in accordance with IFRSs as adopted by the EU and as applied in 
accordance with the provisions of the Companies Act 2006; and
 — the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
Opinion on other matter prescribed by the Companies Act 2006
In our opinion the information given in the Strategic Report and the Directors’ Report for the financial year for which the financial statements 
are prepared is consistent with the financial statements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
 — adequate accounting records have not been kept by the Parent Company, or returns adequate for our audit have not been received from 
branches not visited by us; or
 — the Parent Company financial statements are not in agreement with the accounting records and returns; or
 — certain disclosures of directors’ remuneration specified by law are not made; or
 — we have not received all the information and explanations we require for our audit.
Adrian Wilcox (Senior Statutory Auditor)
for and on behalf of KPMG LLP, Statutory Auditor
Chartered Accountants
15 Canada Square 
London 
E14 5GL
30 March 2015
Independent Auditor’s Report
to the Members of Volga Gas plc
STRATEGIC  
REPORT
GOVERNANCE FINANCIAL 
STATEMENTS
23 VOLGA GAS PLC  |  ANNUAL REPORT AND ACCOUNTS 2014 Group Income Statement
(presented in US$ 000)
Year ended 31 December Notes 2014 2013
Continuing operations
Revenue 39,423 34,621
Cost of sales 5 (22,514) (18,451)
Gross profit 16,909 16,170
Exploration and evaluation expense 5 – (2,519)
Operating and administrative expenses 5 (4,157) (4,029)
Write off of development assets – (1,439)
Operating profit 12,752 8,183
Interest income 6 245 45
Interest expense – (281)
Other gains and losses – net 7 3,290 1,648
Profit for the year before tax 16,287 9,595
Deferred income tax 8 (3,229) (1,036)
Profit for the year before non-controlling interests 13,058 8,559
Attributable to:
The owners of the Parent Company 13,058 8,559
Basic and diluted profit per share (in US Dollars)
9 0.16 0.11
Weighted average number of shares outstanding 81,017,800 81,017,800
The Company has elected to take the exemption under section 408 of the Companies Act 2006 to not present the Parent Company income 
statement. The loss for the Parent Company for the year was US$ 1,472,000 (2013: US$1,187,000)
Group Statement of Comprehensive Income
(presented in US$ 000)
Year ended 31 December Notes 2014 2013
Profit for the year attributable to equity shareholders of the Company 13,058 8,559
Other comprehensive income items that may be reclassified to profit and loss:
Currency translation differences (48,955) (8,242)
Total comprehensive (expense)/income for the year (35,897) 317
Attributable to:
The owners of the Parent Company (35,897) 317
The accompanying notes on pages 30 to 44 are an integral part of these financial statements.
24 VOLGA GAS PLC  |  ANNUAL REPORT AND ACCOUNTS 2014 At 31 December Notes 2014 2013
Assets
Non-current assets
Intangible assets 10 3,746 6,438
Property, plant and equipment 11 57,819 98,272
Other non-current assets 12 68 709
Deferred tax assets 8 706 750
Total non-current assets 62,339 106,169
Current assets
Cash and cash equivalents 13 15,767 8,081
Inventories 14 1,099 1,793
Other receivables 15 918 2,869
Total current assets 17,784 12,743
Total assets 80,123 118,912
Equity and liabilities
Equity
Share capital 16 1,485 1,485
Share premium (net of issue costs) 16 – 165,873
Other reserves 17 (70,816) (21,861)
Accumulated profits/(losses) 18 145,114 (30,779)
Equity attributable to the shareholders of the Parent 75,783 114,718
Total equity 75,783 114,718
Non-current liabilities
Asset retirement obligation 189 325
Deferred tax liabilities 8 2,478 -
Total non-current liabilities 2,667 325
Current liabilities
Trade and other payables 19 1,673 3,869
Total current liabilities 1,673 3,869
Total equity and liabilities 80,123 118,912
Approved by the Board of Directors on 27 March 2015 and signed on its behalf by
Mikhail Ivanov Tony Alves
Chief Executive Officer Chief Financial Officer
The accompanying notes on pages 30 to 44 are an integral part of these financial statements.
Group Balance Sheet
(presented in US$ 000)
STRATEGIC  
REPORT
GOVERNANCE FINANCIAL 
STATEMENTS
25 VOLGA GAS PLC  |  ANNUAL REPORT AND ACCOUNTS 2014 Group Cash Flow Statements
(presented in US$ 000)
Year ended 31 December Notes 2014 2013
Profit for the year before tax 16,287 9,595
Adjustments to loss before tax:
Depreciation 4,683 2,608
E&E expense – 2,519
Write off of development assets – 1,188
Other non-cash expenses – 342
Foreign exchange differences (5,297) 310
Operating cash flow prior to working capital 15,673 16,562
Working capital changes
Increase/(decrease) in trade and other receivables 1,621 (870)
Decrease in payables (971) 315
Decrease in inventory (77) (644)
Cash flow from operations 16,246 15,363
Income tax paid – -
Net cash flow generated from operating activities 16,246 15,363
Cash flows from investing activities
Expenditure on exploration and evaluation 10 – -
Purchase of property, plant and equipment 11 (5,520) (6,229)
Net cash used in investing activities (5,520) (6,229)
Cash flows from financing activities
Equity dividends paid (3,038) -
Loans repaid – (8,097)
Net cash provided by financing activities (3,038) (8,097)
Effect of exchange rate changes on cash and cash equivalents (2) (5)
Net increase in cash and cash equivalents 7,686 1,032
Cash and cash equivalents at beginning of the year 13 8,081 7,049
Cash and cash equivalents at end of the year 13 15,767 8,081
The accompanying notes on pages 30 to 44 are an integral part of these financial statements.
26 VOLGA GAS PLC  |  ANNUAL REPORT AND ACCOUNTS 2014 At 31 December Notes 2014 2013
Assets
Non-current assets
Investments 20 152,234 152,234
Intercompany receivables 22 4,606 15,697
Total non-current assets 156,840 167,931
Current assets
Cash and cash equivalents 13 6,786 201
Other receivables 15 31 29
Total current assets 6,817 230
Total assets 163,657 168,161
Equity and liabilities
Equity
Share capital 16 1,485 1,485
Share premium (net of issue costs) 16 – 165,873
Share grant expense reserve 17 5,233 5,233
Accumulated profit/(loss) 18 155,566 (5,797)
Total equity 162,284 166,794
Current liabilities
Intercompany payables 1,357 1,357
Trade and other payables 19 16 10
Total current liabilities 1,373 1,367
Total equity and liabilities 163,657 168,161
Approved by the Board of Directors on 27 March 2015 and signed on its behalf by
Mikhail Ivanov Tony Alves
Chief Executive Officer Chief Financial Officer
The accompanying notes on pages 30 to 44 are an integral part of these financial statements.
Company Balance Sheet
(presented in US$ 000) 
Company registration number: 05886534
STRATEGIC  
REPORT
GOVERNANCE FINANCIAL 
STATEMENTS
27 VOLGA GAS PLC  |  ANNUAL REPORT AND ACCOUNTS 2014 Company Cash Flow Statements
(presented in US$ 000)
Year ended 31 December Notes 2014 2013
Profit/(loss) for the period before tax (1,472) (1,187)
Adjustments to loss before tax:
Non-cash items – –
Operating cash flow prior to working capital (1,472) (1,187)
Working capital changes
(Increase)/decrease in receivables (2) 33
Increase/(decrease) in payables 6 (5)
Cash flow from operations (1,468) (1,159)
Income tax paid – –
Net cash flow generated from operating activities (1,468) (1,159)
Cash flows from investing activities
Decrease in intercompany receivables 22 11,091 343
Net cash from investing activities 11,091 343
Cash flows from financing activities
Equity dividends paid (3,038) –
Net cash used in financing activities (3,038) –
Effect of exchange rate changes on cash and cash equivalents – –
Net increase/(decrease) in cash and cash equivalents 6,585 (816)
Cash and cash equivalents at the beginning of the year 13 201 1,017
Cash and cash equivalents at end of the year 13 6,786 201
The accompanying notes on pages 30 to 44 are an integral part of these financial statements.
28 VOLGA GAS PLC  |  ANNUAL REPORT AND ACCOUNTS 2014 Notes Share Capital
Share 
Premium
Currency 
Translation 
Reserves
Share Grant 
Reserve
Accumulated 
Profit/(Loss) Total Equity
Opening equity at 1 January 2013 1,485 165,873 (18,852) 5,233 (39,338) 114,401
Profit for the year – – – – 8,559 8,559
Currency translation differences – – (8,242) – – (8,242)
Total comprehensive income – – (8,242) – 8,559 317
Closing equity at 31 December 2013 1,485 165,873 (27,094) 5,233 (30,779) 114,718
Opening equity at 1 January 2014 1,485 165,873 (27,094) 5,233 (30,779) 114,718
Profit for the year – – – – 13,058 13,058
Equity dividends paid – – – – (3,038) (3,038)
Cancellation of share premium account 16 – (165,873) – – 165,873 –
Total transactions with owners – (165,873) – – 162,835 (3,038)
Currency translation differences – – (48,955) – – (48,955)
Total comprehensive income – – (48,955) – 13,058 (35,897)
Closing equity at 31 December 2014 1,485 – (76,049) 5,233 145,114 75,783
Company Statement of Changes in Shareholders’ Equity
(presented in US$ 000)
Notes Share Capital
Share 
Premium
Share Grant 
Reserve
Accumulated 
Profit/(loss) Total Equity
Opening equity as at 1 January 2013 1,485 165,873 5,233 (4,610) 167,981
Loss for the year – – – (1,187) (1,187)
Closing equity at 31 December 2013 1,485 165,873 5,233 (5,797) 166,794
Opening equity as at 1 January 2014 1,485 165,873 5,233 (5,797) 166,794
Loss for the year – – – (1,472) (1,472)
Equity dividends paid – – – (3,038) (3,038)
Cancellation of share premium account 16 – (165,873) – 165,873 –
Closing equity at 31 December 2014 1,485 – 5,233 155,566 162,284
The accompanying notes on pages 30 to 44 are an integral part of these financial statements.
Group Statement of Changes in Shareholders’ Equity
(presented in US$ 000)
STRATEGIC  
REPORT
GOVERNANCE FINANCIAL 
STATEMENTS
29 VOLGA GAS PLC  |  ANNUAL REPORT AND ACCOUNTS 2014 Notes to the IFRS Consolidated Financial Statements
For the year ended 31 December 2014
(presented in US$ 000)
1. General information
Volga Gas plc (the “Company” or “Volga”) is a public limited company registered in England and Wales with registered number 5886534. 
The Company was incorporated on 25 July 2006. The principal activities of the Company and its subsidiaries (the “Group”) are the acquisition, 
exploration and development of hydrocarbon assets and production of hydrocarbons in the Volga Region of the Russian Federation. Its 
registered office is at Ground floor, 17-19 Rochester Row, London, SW1P 1QT. The Company’s shares are admitted to trading on the AIM market 
of the London Stock Exchange.
These Group consolidated financial statements were authorised for issue by the Board of Directors on 27 March 2015.
2. Summary of significant accounting policies
The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have 
been consistently applied to all the years presented, unless otherwise stated.
2.1 Basis of preparation
Both the Parent Company financial statements and the Group financial statements have been prepared in accordance with International 
Financial Reporting Standards (“IFRSs”), as adopted by the European Union (“EU”), International Financial Reporting Interpretations Committee 
(“IFRIC”) interpretations, and the Companies Act 2006 applicable to companies reporting under IFRS. The consolidated financial statements 
have been prepared under the historical cost convention and in accordance with applicable accounting standards.
The preparation of financial statements in conformity with IFRSs requires the use of certain critical accounting estimates. It also requires 
management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher degree of 
judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed 
in note 4.
No income statement is presented for Volga Gas plc as permitted by Section 408 of the Companies Act 2006.
The Group’s business activities, together with the factors likely to affect its future development, performance and position set out in the 
Strategic Report in pages 4 to 13; the financial position of the Group, its cash flows, liquidity position and borrowing facilities are described 
in the Financial Review on pages 10 to 11. In addition, the Group’s objectives, policies and processes for measuring capital, financial risk 
management objectives, details of financial instruments and exposure to credit and liquidity risks are described in note 3. Having reviewed the 
future cash flow forecasts of the Group, the directors have concluded that the Group will continue to have access to sufficient funds in order to 
meet its obligations as they fall due for at least the foreseeable future and thus continue to adopt the going concern basis of accounting in 
preparing the annual financial statements.
Disclosure of impact of new and future accounting standards
(a) New and amended standards and interpretations:
There are no IFRSs or IFRIC interpretations that are effective for the first time for the financial year beginning on 1 January 2014 that have a 
material impact on the Group.
In accordance with the transitional provisions of IFRS 10, the Group reassessed the control conclusion for its investees at 1 January 2014. No 
modifications of previous conclusions about control regarding the Group’s investees were required.
(b) Standards, amendments and interpretations to existing standards that are not yet effective and have not been early adopted by the Group. 
The following new standards, amendments to standards and interpretations have been issued, but are not effective for the financial year 
beginning 1 January 2014 and have not been early adopted:
 — IFRS 9 Financial Instruments (effective 1 January 2018)
 — Annual Improvements to IFRSs – 2010-2012 Cycle (effective 1 July 2014)
 — Annual Improvements to IFRSs – 2011-2013 Cycle (effective 1 July 2014)
The Group is yet to assess the full impact of these new standards and amendments but does not expect them to have an material impact on the 
financial statements, with the main effect being the requirement for additional disclosures.
2.2 Consolidation
(a) Subsidiaries
The consolidated financial statements include the financial statements of the Company and its subsidiaries. Subsidiaries are entities controlled 
by the Group. The Group controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has 
the ability to affect those returns through its power over the entity. In assessing control, the Group takes into consideration potential voting 
rights that are currently exercisable. The acquisition date is the date on which control is transferred to the acquirer. The financial statements of 
subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. 
Losses applicable to the non-controlling interests in a subsidiary are allocated to the non-controlling interests even if doing so causes the 
non-controlling interests to have a deficit balance.
Investments in subsidiaries are accounted for at cost less impairment. Cost is adjusted to reflect changes in consideration arising from 
contingent consideration amendments. Cost also includes direct attributable costs of investment.
30 VOLGA GAS PLC  |  ANNUAL REPORT AND ACCOUNTS 2014 Inter-company transactions, balances and unrealised gains on transactions between Group companies are eliminated; unrealised losses are also 
eliminated unless the cost cannot be recovered.
The Company and its subsidiaries outside the Russian Federation maintain their financial statements in accordance with IFRSs as adopted by 
the EU. The Russian subsidiaries of the Group maintain their statutory accounting records in accordance with the Regulations on Accounting 
and Reporting of the Russian Federation. The consolidated financial statements are based on these statutory accounting records, appropriately 
adjusted and reclassified for fair presentation in accordance with International Financial Reporting Standards as adopted by the EU.
A list of the Company’s subsidiaries is provided in note 20.
2.3 Segment reporting
Segmental reporting follows the Group’s internal reporting structure.
Operating segments are defined as components of the Group where separate financial information is available and reported regularly to the 
chief operating decision maker (“CODM”), which is determined to be the Board of Directors of the Company. The Board of Directors decides 
how to allocate resources and assesses operational and financial performance using the information provided.
The CODM receives monthly IFRS based financial information for the Group and its development and production entities. There were three 
development and production entities during both 2013 and 2014. Management has determined that the operations of these production and 
development entities are sufficiently homogenous (all are concerned with upstream oil and gas development and production activities) for 
these to be aggregated for the purpose of IFRS 8, “Operating Segments”. The Group has other entities that engage as either head office or in a 
corporate capacity or as holding companies. Management has concluded that due to application of the aggregation criteria that separate 
financial information for segments is not required.
No geographic segmental information is presented as all of the companies operating activities are based in the Russian Federation.
Management has determined therefore that the operations of the Group comprise one class of business, being oil and gas exploration, 
development and production and the Group operates in only one geographic area – the Russian Federation.
The Group’s gas sales, representing a substantial proportion of revenues are made to a single customer. Details are provided in note 3.1 (b).
2.4 Foreign currency translation
(a) Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic 
environment in which the entity operates (“the functional currency”). The consolidated financial statements are presented in US Dollars, which 
is the Company’s functional and the Group’s presentation currency.
The functional currency of the Group’s subsidiaries that are incorporated in the Russian Federation is the Russian Ruble (“RUR”). It is the 
Management’s view that the RUR best reflects the financial results of its Cyprus subsidiaries because they are dependent on entities based in 
Russia that operate in an RUR environment in order to recover their investments. As a result, the functional currency of the subsidiaries 
continues to be the RUR.
(b) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. 
Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of 
monetary assets and liabilities denominated in foreign currencies are recognised in the income statement.
Foreign exchange gains and losses that relate to cash and cash equivalents, borrowings and other foreign exchange gains and losses are 
presented in the income statement within “Other gains and losses”.
(c) Group companies
The results and financial position of all the Group entities (none of which has the currency of a hyper-inflationary economy) that have a 
functional currency different from the presentation currency are translated into the presentation currency as follows:
(i) assets and liabilities for each balance sheet item presented are translated at the closing rate at the date of that balance sheet;
(ii) income and expenses for each income statement are translated at average exchange rates (unless this average is not a reasonable 
approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated 
at the rate on the dates of the transactions); and
(iii) all resulting exchange differences are recognised in other comprehensive income.
The major exchange rates used for the revaluation of the closing balance sheet at 31 December 2014 were:
 — GBP 1.5532: US$ (2013: GBP 1: US$ 1. 6488)
 — EUR 1.2148: US$ (2013: 1.374)
 — US$ 1:56.2584 RUR. (2013: US$ 1: RUR. 32.729)
2. Summary of significant accounting policies continued
STRATEGIC  
REPORT
GOVERNANCE FINANCIAL 
STATEMENTS
31 VOLGA GAS PLC  |  ANNUAL REPORT AND ACCOUNTS 2014 Notes to the IFRS Consolidated Financial Statements 
continued
2.5 Oil and gas assets
The Company and its subsidiaries apply the successful efforts method of accounting for Exploration and Evaluation (“E&E”) costs, in accordance 
with IFRS 6 “Exploration for and Evaluation of Mineral Resources”. Costs are accumulated on a field-by-field basis.
Capital expenditure is recognised as property, plant and equipment or intangible assets in the financial statements according to the nature of 
the expenditure and the stage of development of the associated field, i.e. exploration, development, production.
(a) Exploration and evaluation assets
Costs directly associated with an exploration well, including certain geological and geophysical costs, and exploration and property leasehold 
acquisition costs, are capitalised as intangible assets until the determination of reserves is evaluated. If it is determined that a commercial 
discovery has not been achieved, these costs are charged to expense after the conclusion of appraisal activities. Exploration costs such as 
geological and geophysical that are not directly related to an exploration well are expensed as incurred.
Once commercial reserves are found, exploration and evaluation assets are tested for impairment and transferred to development assets. No 
depreciation or amortisation is charged during the exploration and evaluation phase.
(b) Development assets
Expenditure on the construction, installation or completion of infrastructure facilities such as platforms, pipelines and the drilling of 
development wells into commercially proven reserves, is capitalised within property, plant and equipment. When development is completed on 
a specific field, it is transferred to producing assets as part of property, plant and equipment. No depreciation or amortisation is charged during 
the development phase.
(c) Oil and gas production assets
Production assets are accumulated generally on a field by field basis and represent the cost of developing the commercial reserves discovered 
and bringing them into production together with E&E expenditures incurred in finding commercial reserves and transferred from the 
intangible E&E assets as described above.
The cost of production assets also includes the cost of acquisitions and purchases of such assets, directly attributable overheads, finance costs 
capitalised and the cost of recognising provisions for future restoration and decommissioning.
Where major and identifiable parts of the production assets have different useful lives, they are accounted for as separate items of property, 
plant and equipment. Costs of minor repairs and maintenance are expensed as incurred.
(d) Depreciation/amortisation
Oil and gas properties are depreciated or amortised using the unit-of-production method. Unit-of-production rates are based on proved and 
probable reserves, which are oil, gas and other mineral reserves estimated to be recovered from existing facilities using current operating 
methods. Oil and gas volumes are considered produced once they have been measured through meters at custody transfer or sales transaction 
points at the outlet valve on the field storage tank.
(e) Impairment – exploration and evaluation assets
Exploration and evaluation assets are tested for impairment prior to reclassification to development tangible assets, or whenever facts and 
circumstances indicate that an impairment condition may exist. An impairment loss is recognised for the amount by which the exploration and 
evaluation assets’ carrying amount exceeds their recoverable amount. The recoverable amount is the higher of the exploration and evaluation 
assets’ fair value less costs to sell and their value in use. For the purposes of assessing impairment, the exploration and evaluation assets 
subject to testing are grouped with existing cash-generating units of production fields that are located in the same geographical region.
(f) Impairment – proved oil and gas production properties
Proven oil and gas properties are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may 
not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The 
recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. The cash generating unit applied for impairment test 
purposes is generally the field, except that a number of field interests may be grouped together where the cash flows of each field are 
interdependent, for instance where surface infrastructure is used by one or more field in order to process production for sale.
(g) Decommissioning
Provision is made for the cost of decommissioning assets at the time when the obligation to decommission arises. Such provision represents 
the estimated discounted liability (the discount rate used currently being at 10% per annum) for costs which are expected to be incurred in 
removing production facilities and site restoration at the end of the producing life of each field. A corresponding item of property, plant and 
equipment is also created at an amount equal to the provision. This is subsequently depreciated as part of the capital costs of the production 
facilities. Any change in the present value of the estimated expenditure attributable to changes in the estimates of the cash flow or the current 
estimate of the discount rate used are reflected as an adjustment to the provision and the property, plant and equipment. The unwinding of 
the discount is recognised as a finance cost.
2. Summary of significant accounting policies continued
32 VOLGA GAS PLC  |  ANNUAL REPORT AND ACCOUNTS 2014 2.6 Other business and corporate assets
Property, plant and equipment not associated with exploration and production activities are carried at cost less accumulated depreciation. 
These assets are also evaluated for impairment when circumstances dictate.
Land is not depreciated. Depreciation of other assets is calculated on a straight line basis as follows:
Machinery and equipment 6–10 years
Office equipment in excess of US$5,000 3–4 years
Vehicles and other 2–7 years
2.7 Financial assets
The Group classifies its financial assets in the following categories:
(a) Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss are financial assets held for trading. This category comprises derivatives unless they are 
effective hedging instruments. The Group had no financial assets in this class as at 31 December 2014 or 31 December 2013.
(b) Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. This 
category comprises trade and other receivables, term bank deposits and cash and cash equivalents in balance sheet.
2.8 Inventories
Crude oil inventories are stated at the lower of cost of production and net realisable value. Materials and supplies inventories are recorded at 
average cost and are carried at amounts which do not exceed the expected recoverable amount from use in the normal course of business. 
Cost comprises direct materials and, where applicable, direct labour plus attributable overheads based on a normal level of activity and other 
costs associated in bringing inventories to their present location and condition.
2.9 Trade and other receivables
Trade and other receivables are recorded initially at fair value and subsequently measured at amortised cost using the effective interest method, 
less provision for impairment. A provision for impairment of trade receivables is established when there is objective evidence that the Group will 
not be able to collect all amounts due according to the original terms of the receivables. The amount of the provision is the difference between 
the asset’s carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate.
2.10 Cash and cash equivalents
Cash and cash equivalents include cash in hand, and deposits held at call with banks.
2.11 Share capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.
2.12 Trade payables
Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.
2.13 Current and deferred income tax
The tax expense for the period comprises current and deferred tax. Tax is recognised in the income statement, except to the extent that it 
relates to items recognised in other comprehensive income or directly in equity. In this case the tax is also recognised in other comprehensive 
income or directly in equity, respectively.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period in 
the countries where the Company’s subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in 
tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate 
on the basis of amounts expected to be paid to the tax authorities.
Deferred income tax is recognised, using the liability method, on temporary differences arising between the tax bases of assets and liabilities 
and their carrying amounts in the consolidated financial statements. However, the deferred income tax is not accounted for if it arises from 
initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither 
accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially 
enacted by the end of the reporting period and are expected to apply when the related deferred income tax asset is realised or the deferred 
income tax liability is settled.
Deferred income tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the 
temporary differences can be utilised.
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax 
liabilities and when the deferred income taxes assets and liabilities relate to income taxes levied by the same taxation authority on either the 
same taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.
2. Summary of significant accounting policies continued
STRATEGIC  
REPORT
GOVERNANCE FINANCIAL 
STATEMENTS
33 VOLGA GAS PLC  |  ANNUAL REPORT AND ACCOUNTS 2014 Notes to the IFRS Consolidated Financial Statements 
continued
2.14 Employee benefits
(a) Share-based compensation
The fair value of the employee services received in exchange for the grant of the options is recognised as an expense. The total amount to be 
expensed over the vesting period is determined by reference to the fair value of the options granted, excluding the impact of any non-market 
vesting conditions (for example, profitability and sales growth targets). Non-market vesting conditions are included in assumptions about the 
number of options that are expected to vest. The option plan currently in place for certain of the directors is an equity settled share option plan.
The Company measures the equity instruments granted to employees at the fair value at grant date. The fair value of fully-vested shares is 
expensed immediately. The fair value of shares with vesting requirements is estimated using the Black-Scholes option pricing model. This value 
is recognised as an expense over the vesting period on a straight-line basis. The estimate is revised, as necessary, if subsequent information 
indicates that the number of equity instruments expected to vest differs from previous estimates.
(b) Social obligations
Wages, salaries, contributions to the Russian Federation state pension and social insurance funds, paid annual leave, sick leave and bonuses are 
accrued in the year in which the associated services are rendered by the employees of the Group.
2.15 Revenue recognition
Revenue comprises the fair value of the consideration received or receivable for the sale of oil and gas in the ordinary course of the Group’s 
activities. Revenue is shown net of value added tax, returns, rebates and discounts and after eliminating sales within the Group. Revenue from 
the sale of oil or gas is recognised when the oil/gas is delivered to customers and title has transferred. In 2014 and 2013 , the Group’s revenue 
related to sales of crude oil and condensate collected directly by customers and gas sales made at the entry to the gas distribution system.
2.16 Prepayments
Prepayments are carried at cost less provision for impairment. A prepayment is classified as non-current when the goods or services relating to 
the prepayment are expected to be obtained after one year, or when the prepayment relates to an asset which will itself be classified as 
non-current upon initial recognition. Prepayments to acquire assets are transferred to the carrying amount of the asset once the Group has 
obtained control of the asset and it is probable that future economic benefits associated with the asset will flow to the Group. Other 
prepayments are written off to profit or loss when the goods or services relating to the prepayments are received. If there is an indication that 
the assets, goods or services relating to a prepayment will not be received, the carrying value of the prepayment is written down accordingly 
and a corresponding impairment loss is recognised in profit or loss for the year.
2.17 Provisions
Provisions for environmental restoration, restructuring costs and legal claims are recognised when: the Group has a present legal or 
constructive obligation as a result of past events; it is probable that an outflow of resources will be required to settle the obligation; and the 
amount has been reliably estimated. Restructuring provisions comprise lease termination penalties and employee termination payments. 
Provisions are not recognised for future operating losses.
Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the 
class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same 
class of obligations may be small.
Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax rate that 
reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provision due to 
passage of time is recognised as interest expense.
3. Financial risk management
3.1 Financial risk factors
The Group’s activities expose it to a variety of financial risks: market risk (including foreign exchange risk, price risk, and cash flow interest rate 
risk), credit risk, and liquidity risk. The Group’s overall risk management programme focuses on the unpredictability of financial markets and 
seeks to minimise potential adverse effects on the Group’s financial performance.
(a) Market Risk
(i) Foreign exchange risk
The Group is exposed to foreign exchange risk arising from currency exposures, primarily with respect to the Russian Ruble. Foreign exchange 
risk arises from future commercial transactions, recognised assets and liabilities.
At 31 December 2014, if the US Dollar had weakened/strengthened by 5% against the RUR with all other variables held constant, post-tax profit 
for the year would have been US$289,000 (2013: US$50,250) higher/lower, mainly as a result of foreign exchange gains/losses on translation of 
RUR denominated trade payables and financial assets. At 31 December 2014, if the US Dollar had weakened/strengthened by 5% against the 
Euro (“EUR”) with all other variables held constant, post-tax profit for the year would have been US$1,000 (2013: US$1,200) higher/lower, mainly 
as a result of foreign exchange gains/losses on translation of EUR denominated interest charges and financial liabilities. At 31 December 2014, if 
the US Dollar had weakened/strengthened by 5% against the Pound Sterling (“GBP”) with all other variables held constant, post-tax profit for 
the year would have been US$15,000 (2013: US$1,500) higher/lower, mainly as a result of foreign exchange gains/losses on translation of GBP 
denominated trade payables and financial assets.
2. Summary of significant accounting policies continued
34 VOLGA GAS PLC  |  ANNUAL REPORT AND ACCOUNTS 2014 The following table shows the currency structure of financial assets and liabilities:
At 31 December 2014
Rubles 
US$ 000
US Dollars 
US$ 000
Euros 
US$ 000
Sterling 
US$ 000
Total 
US$ 000
Financial assets
Cash and cash equivalents 3,167 12,405 15 180 15,767
Total financial assets 3,167 12,405 15 180 15,767
Financial liabilities (before provision for UK taxes) 1,149 – – – 1,149
At 31 December 2013
Financial assets
Cash and cash equivalents 6,836 1,226 17 2 8,081
Total financial assets 6,836 1,226 17 2 8,081
Financial liabilities (before provision for UK taxes) 2,979 – – – 2,979
Group companies utilised short-term foreign exchange forward contracts in 2014 to effect sales of RUR against USD. There were no open 
contracts as at 31 December 2014. No forward foreign exchange contracts were used in 2013.
(ii) Price risk
The Group is not exposed to price risk as it does not hold financial instruments of which the fair values or future cash flows will be affected by 
changes in market prices.
(iii) Cash flow and fair value interest rate risk
As the Group currently has no significant interest-bearing assets and liabilities, the Group’s income and operating cash flows are substantially 
independent of changes in market interest rates.
(b) Credit risk
The Group’s maximum credit risk exposure is the fair value of each class of assets, presented in note 3.1(a)(i) of US$15,767,000 and US$8,081,000 
at 31 December 2014 and 2013 respectively.
The Group’s principal financial asset is cash and credit risk arises from cash and cash equivalents and deposits with banks and financial 
institutions. It is the Group’s policy to monitor the financial standing of these assets on an ongoing basis. Bank balances are held with reputable 
and established financial institutions.
The Group’s oil and condensate sales are undertaken on a prepaid basis and accordingly the Group has no trade receivables and consequently 
no credit risk associated with the related trade receivables. Gas sales accounting for 31.0% of Group revenues in 2014 (2013: 24.7%) are made to 
OOO Trans Nafta. As at 31 December 2014 there were trade receivables of US$0.6 million (31 December 2013: US$1.8 million) primarily relating 
to gas sales.
Rating of financial institution (S&P)
31 December 
2014
31 December 
2013
A+ 7,123 313
BBB+ 4,971 7,132
BBB– 3,615 489
Other 58 147
Total bank balance 15,767 8,081
(c) Liquidity risk
Cash flow forecasting is performed by Group finance. Group finance monitors rolling forecasts of the Group’s liquidity requirements to ensure 
it has sufficient cash to meet operational needs. The Group believes it has at least sufficient liquidity headroom to fund its currently planned 
exploration and development activities.
The Group expects to fund its capital investments, as well as its administrative and operating expenses, through 2015 using a combination of 
cash generated from its oil and gas production activities, existing working capital and, when appropriate, medium-term bank borrowings. If the 
Group is unsuccessful in generating enough liquidity to fund its expenditures, the Group’s ability to execute its long-term growth strategy could 
be significantly affected. The Group may need to raise additional equity or debt finance as appropriate to fund investments beyond its current 
commitments.
3. Financial risk management continued
STRATEGIC  
REPORT
GOVERNANCE FINANCIAL 
STATEMENTS
35 VOLGA GAS PLC  |  ANNUAL REPORT AND ACCOUNTS 2014 Notes to the IFRS Consolidated Financial Statements 
continued
(d) Capital risk
The Group manages capital to ensure that it is able to continue as a going concern whilst maximising the return to shareholders. The Group is 
not subject to any externally imposed capital requirements. The Board regularly monitors the future capital requirements of the Group, 
particularly in respect of its ongoing development programme. Management expects that the cash generated by the operating fields will be 
sufficient to sustain the Group’s operations and future capital investment for the foreseeable future. Further short-term debt facilities may be 
arranged to provide financial headroom for future development activities.
3.2 Fair value estimation
Effective 1 January 2009, the Group adopted the amendment to IFRS 7 for financial instruments that are measured in the balance sheet at fair 
value. This requires disclosure of fair value measurements by level of the following fair value measurement hierarchy:
 — Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1).
 — Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or 
indirectly (that is, derived from prices) (level 2).
 — Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (level 3).
The Group has no financial assets and liabilities that are required to be measured at fair value.
4. Critical accounting estimates and judgements
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the 
related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of 
assets and liabilities within the next financial year are discussed below.
(a) Carrying value of fixed assets, intangible assets and impairment
Fixed assets are assessed for impairment when events and circumstances indicate that an impairment condition may exist. The carrying value 
of fixed assets is evaluated by reference to their value in use and primarily looks to the present value of management’s best estimate of the 
cash flows expected to be generated from the asset. In identifying cash flows management firstly determine the cash generating unit or group 
of assets that give rise to the cash flows. The cash generating unit is the lowest level of asset at which independent cash flows can be 
generated.
The estimation of forecast cash flows involves the application of a number of significant judgements and estimates to a number of variables 
including production volumes, commodity prices, operating costs, capital investment, hydrocarbon reserves estimates, inflation and discount 
rates. For the purposes of impairment testing, the discount rate used is 15% per annum. In addition, judgement is applied in determining the 
cash generating unit to be assessed for impairment.
(b) Estimation of oil and gas reserves
Estimates of oil and gas reserves are inherently subjective and subject to periodic revision. In addition, the results of drilling and other 
exploration or development activity will often provide additional information regarding the Group’s reserve base that may result in increases or 
decreases to reserve volumes. Such revisions to reserves can be significant and are not predictable with any degree of certainty. Management 
considers the estimation of reserves to represent a significant judgement in the context of the financial statements as reserve volumes are 
used as the basis for assessing the useful life of oil and gas assets, applying depreciation to oil and gas assets and in assessing the carrying value 
of oil and gas assets. Decreases in reserve estimates can lead to significant impairment of oil and gas assets where revisions (positive or 
negative) can have a significant effect on depreciation rates from period to period. Management have considered the sensitivity of this key 
assumption and in order for an impairment issue to present itself to the Group, reserve estimates would need to reduce by more than 25%.
(c) Income taxes
Significant judgement is frequently required in estimating provisions for deferred taxes. This process involves an assessment of temporary 
differences resulting from differing treatment of items for tax and accounting purposes. These differences result in deferred tax assets and 
liabilities, which are included within the balance sheet.
3. Financial risk management continued
36 VOLGA GAS PLC  |  ANNUAL REPORT AND ACCOUNTS 2014 5. Cost of sales and administrative expenses – Group
Cost of sales and administrative expenses are as follows:
Year ended 31 December
2014 
US$ 000
2013 
US$ 000
Production expenses 9,530 7,777
Mineral extraction taxes 8,344 8,095
Depletion, depreciation and amortisation 4,640 2,579
Cost of Sales 22,514 18,451
Total expenses are analysed as follows:
Year ended 31 December
2014 
US$ 000
2013 
US$ 000
Mineral extraction tax 8,344 8,095
Exploration & evaluation – 2,519
Salaries & staff benefits 2,896 3,048
Depreciation & amortisation 4,656 2,611
Directors’ emoluments and other benefits 810 808
Field operating expenses 7,805 5,946
Audit fees 199 286
Taxes other than payroll and mineral extraction 82 86
Legal & consulting 909 374
Write-off of development assets – 1,439
Fines and penalties 99 343
Other 871 883
Total 26,671 26,438
(a)  Exploration and evaluation: For 2013, the principal component was impairment of the carrying value of the Pre-Caspian licence 
which was relinquished after the year end.
(b) Staff and salaries: The average monthly number of employees (including executive directors) employed by the Group was:
Year ended 31 December 2014 2013
Exploration and production 141 128
Administration and support 23 23
Total 164 151
Their aggregate remuneration (excluding executive directors) comprised:
2014 
US$ 000
2013 
US$ 000
Wages and salaries 2,083 2,277
Payroll taxes & social contribution 761 700
Staff benefits 52 71
Total 2,896 3,048
The average monthly number of employees employed by the Company was:
Year ended 31 December 2014 2013
Chief Executive and Chief Financial Officers 2 2
Only directors are employed by the Company.
STRATEGIC  
REPORT
GOVERNANCE FINANCIAL 
STATEMENTS
37 VOLGA GAS PLC  |  ANNUAL REPORT AND ACCOUNTS 2014 Notes to the IFRS Consolidated Financial Statements 
continued
(c) Directors’ emoluments and other benefits
Directors’ emoluments comprised salaries of US$688,000 (2013: US$630,000), pension contributions of US$21,000 (2013: US$78,000) and 
non-executive directors’ fees of US$100,000 (2013: US$100,000). There were no share grant expenses in 2014 (2013: nil).
(d) Audit Fees – Group and Company
Disclosure of the fees paid to the Company’s auditors and its associates is given in note 21.
(e) Depreciation
Substantially all depreciation relates to oil and gas assets and is included within cost of sales.
(f) Write-off of development assets
There was no write off of development assets in the year ended 31 December 2014. In the year ended 31 December 2013, the write-off of 
development assets comprised and impairment of US$1.3 of amounts of Property Plant and Equipment associated with redundant assets (note 
11) and costs of US$0.1 million incurred during the year in dismantling and site restitution in relation to these assets.
6. Finance income – Group
Finance income comprises interest earned during the period on cash balances with different banks (note 13).
7. Other gains and losses – Group
Year ended 31 December
2014 
US$ 000
2013 
US$ 000
Foreign exchange gain/(loss) 3,263 (306)
Mineral Extraction Tax refund – 1,939
Other gains 27 15
Total other gains and losses 3,290 1,648
Mineral extraction tax refund related to amounts over-charged in 2009, 2010 and 2011.
8. Current and deferred income tax – Group
Year ended 31 December 2014 2013
Current tax:
Current income tax – –
Adjustments to tax charge in respect of prior periods – –
Total current tax – –
Deferred tax:
Adjustments to tax charge in respect of prior periods – –
Origination and reversal of timing differences (3,229) (1,036)
Total deferred tax (3,229) (1,036)
Total tax charge (3,229) (1,036)
The tax charge in the Group income statement differs from the theoretical amount that would arise using the weighted average tax rate 
applicable to profits of the consolidated entities as follows:
Year ended 31 December
2014 
US$ 000
2013 
US$ 000
Profit before income tax and minority interest 16,287 9,595
Tax calculated at domestic tax rates applicable to (profits)/losses in the respective countries (3,104) (1,972)
Tax effect of items which are not deductible or assessable for taxation purposes:
Non-deductible expenses (287) 716
Other tax adjustments 162 220
Income tax charge (3,229) (1,036)
The weighted average applicable tax rate was 19.1% (2013: 20.6%).
5. Cost of sales and administrative expenses – Group continued
38 VOLGA GAS PLC  |  ANNUAL REPORT AND ACCOUNTS 2014 Deferred taxation is attributable to the temporary differences that exist between the carrying amounts of assets and liabilities for financial 
reporting purposes and the amounts used for tax purposes. The tax effects of temporary differences that give rise to deferred taxation are 
presented below:
31 December 
2014 
US$ 000
Differences 
recognised in 
profit or loss 
US$ 000
Differences 
recognised 
in other 
comprehensive 
income 
US$ 000
31 December 
2013 
US$ 000
Differences 
recognition 
and reversal 
US$ 000
31 December 
2012 
US$ 000
Tax effects of taxable temporary differences:
Exploration and production assets (3,897) 27 2,821 (6,745) (257) (6,488)
Property, plant & equipment (1,486) 10 1,075 (2,571) (106) (2,465)
Inventories – – – – 8 (8)
Total (5,383) 37 3,896 (9,316) (355) (8,961)
Tax effect of deductible temporary differences:
Tax losses carry forward 3,611 (3,340) (3,202) 10,153 (437) 10,590
Trade and other receivables – 74 13 (87) (362) 275
Property, plant and equipment – – – (158) 158
Total 3,611 (3,266) (3,189) 10,066 (957) 11,023
Net tax effect of temporary differences (1,772) (3,229) 707 750 (1,312) 2,062
Deferred income tax assets are recognised for tax loss carry forwards to the extent that the realisation of the related tax benefit through the 
future taxable profits is probable. As at 31 December 2014, deferred income tax assets of US$706,000 (2013: US$750,000) and deferred ta 
liabilities of US$2,478,000 (2013: nil) have been recognised . Tax losses in respect of Cyprus and the UK do not expire. The Group has not 
recognised a deferred tax asset of US$1,711k in respect of tax losses and other short-term timing differences in the UK (2013: US$1,461k).
9. Basic and diluted profit per share – Group
Profit per share is calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of ordinary 
and diluted shares in issue during the year excluding ordinary shares purchased by the Company and held as treasury shares.
Year ended 31 December 2014 2013
Net profit attributable to equity shareholders (US$ per share) 0.161 0.106
Diluted net profit attributable to equity shareholders 0.159 0.104
Net profit attributable to equity shareholders (US$ 000) 13,058 8,559
Basic weighted number of shares 81,017,800 81,017,800
Diluted number of shares 82,350,767 82,350,767
10. Intangible assets – Group
Intangible assets represent exploration and evaluation assets such as licenses, studies and exploratory drilling, which are stated at historical cost.
Work in 
progress: 
exploration 
and 
evaluation
Exploration 
and 
evaluation Total
At 1 January 2013 350 9,296 9,646
Additions – 17 17
Impairments (67) (2,452) (2,519)
At 31 December 2013 283 6,861 7,144
Exchange adjustments (25) (681) (706)
At 31 December 2013 258 6,180 6,438
At 1 January 2014 258 6,180 6,438
Movements during the year – – –
At 31 December 2014 258 6,180 6,438
Exchange adjustments (107) (2,585) (2,692)
At 31 December 2014 151 3,595 3,746
8. Current and deferred income tax – Group continued
STRATEGIC  
REPORT
GOVERNANCE FINANCIAL 
STATEMENTS
39 VOLGA GAS PLC  |  ANNUAL REPORT AND ACCOUNTS 2014 Notes to the IFRS Consolidated Financial Statements 
continued
11. Property, plant and equipment – Group
Movements in property, plant and equipment, for the years ended 31 December 2014 and 2013 are as follows:
Cost
Development 
assets 
US$ 000
Land & 
buildings 
US$ 000
Producing 
assets 
US$ 000
Other 
US$ 000
Total 
US$ 000
At 1 January 2013 13,773 1,262 97,362 808 113,205
Additions 5,579 274 73 – 5,926
Impairments (1,302) – (17) – (1,319)
Transfers (7,872) – 7,872 – –
At 31 December 2013 10,178 1,536 105,290 808 117,812
Accumulated depreciation 
At 1 January 2013 – – (9,014) (488) (9,502)
Depreciation – – (2,545) (63) (2,608)
At 31 December 2013 – – (11,559) (551) (12,110)
Exchange adjustments (1,008) (90) (6,309) (23) (7,430)
At 31 December 2013 9,170 1,446 87,422 234 98,272
Impairment of US$1.3 million in 2013 relates to amounts of Property Plant and Equipment associated with redundant assets (note 5.)
Cost
Development 
assets 
US$ 000
Land & 
buildings 
US$ 000
Producing 
assets 
US$ 000
Other 
US$ 000
Total 
US$ 000
At 1 January 2014 9,170 1,446 98,439 784 109,839
Additions 5,547 – 82 – 5,629
Transfers (901) – 901 – –
At 31 December 2014 13,816 1,446 99,422 784 115,468
Accumulated depreciation 
At 1 January 2014 – – (11,017) (551) (11,568)
Depreciation – – (4,635) (49) (4,684)
At 31 December 2014 – – (15,652) (600) (16,252)
Exchange adjustments (5,293) (604) (35,418) (82) (41,397)
At 31 December 2014 8,523 842 48,353 102 57,819
12. Non-current assets – Group
As at 31 December
2014 
US$ 000
2013 
US$ 000
VAT recoverable 24 633
Other non-current assets 44 76
Total other non-current assets 68 709
Management believes that it may not be able to recover all VAT specific to license and exploration and evaluation contractors’ payments within 
the 12 months of the balance sheet date. Therefore this VAT is classified as a non-current asset.
13. Term deposits, cash and cash equivalents – Group and Company
Group Company
At 31 December
2014 
US$ 000
2013 
US$ 000
2014 
US$ 000
2013 
US$ 000
Cash at bank and on hand 15,767 2,836 6,786 201
Short-term bank deposits – 5,245 – –
Total cash and cash equivalents 15,767 8,081 6,786 201
40 VOLGA GAS PLC  |  ANNUAL REPORT AND ACCOUNTS 2014 An analysis of Group deposits, cash and cash equivalents by bank and currency is presented in the table below:
Group Company
At 31 December Currency
2014 
US$ 000
2013 
US$ 000
2014 
US$ 000
2013 
US$ 000
Bank
United Kingdom 
Barclays Bank PLC USD 6,943 311 6,606 199
Barclays Bank PLC GBP 180 2 180 2
Russian Federation 
Unicreditbank RUR 123 206 – –
Unicreditbank USD 3,492 283 – –
ZAO Raiffeisenbank RUR 2,986 6,485 – –
ZAO Raiffeisenbank USD 1,970 629 – –
ZAO Raiffeisenbank EUR 15 17 – –
Other banks and cash on hand RUR 58 148 – –
Total cash and cash equivalents 15,767 8,081 6,786 201
14. Inventories – Group
At 31 December
2014 
US$ 000
2013 
US$ 000
Production consumables and spare parts 1,060 1,713
Crude oil inventory 39 80
Total inventories 1,099 1,793
15. Other receivables – Group
Group Company
At 31 December
2014 
US$ 000
2013 
US$ 000
2014 
US$ 000
2013 
US$ 000
VAT receivable 81 138 31 29
Prepayments 202 835 – –
Trade receivables 579 1,812 – –
Other accounts receivable 56 84 – –
Total other receivables 918 2,869 31 29
Prepayments are to contractors and relate to initial advances made in respect of drilling, construction and other projects. Trade receivables 
relate to sales of gas and condensate. The receivables were settled on schedule subsequent to the balance sheet date.
16. Share capital and share premium – Group
The following summarises the movement in the share capital and share premium of the Company for the years ended 2013 and 2014.
Number of 
shares
Share capital 
US$ 000
Share 
premium 
US$ 000
At 1 January 2013 81,017,800 1,485 165,873
Issues of shares – – –
At 31 December 2013 81,017,800 1,485 165,873
At 1 January 2014 81,017,800 1,485 165,873
Cancellation of share premium (165,873)
Issues of shares – – –
At 31 December 2014 81,017,800 1,485 –
On 9 July 2014 the capital reduction approved by shareholders at the Company’s Annual General Meeting on 6 June 2014 became effective 
following confirmation by the High Court, the filing of the Court Order and a Statement of Capital with Companies House and the fulfilment of 
certain minor undertakings given to the Court. As a result, the Share Premium Account of the Company, amounting to US$165.9 million, was 
cancelled and the equivalent sum credited to the Company’s Profit and Loss Account, thereby creating distributable reserves.
13. Term deposits, cash and cash equivalents – Group and Company continued
STRATEGIC  
REPORT
GOVERNANCE FINANCIAL 
STATEMENTS
41 VOLGA GAS PLC  |  ANNUAL REPORT AND ACCOUNTS 2014 Notes to the IFRS Consolidated Financial Statements 
continued
The total number of authorised ordinary shares is 330,720,100 (2014: 330,720,100) with a par value of £ 0.01 per share (2013: £ 0.01 per share).
Share-based compensation
Share options and other share-based awards have been granted to certain directors. There were no shares issued to directors under such 
schemes during 2014 (2013: nil).
2008 Executive Share Option Plan
On 15 July 2008 the Group announced a new Executive Share Option Plan (“ESOP”). During 2008, the Company granted options to acquire 
1,137,464 ordinary shares to Mikhail Ivanov under the terms of the ESOP. The options may be exercised at a price of 405p per share and vested 
in equal portions on May 2010, 2011 and 2012 and will remain outstanding until May 2017. In January 2009, the Company granted 568,732 share 
options to Tony Alves under the ESOP. A total of 195,503 share options vested in eight semi-annual tranches over a period of four years under 
conditions related to the Company’s share price. The options have an exercise price of £1.00. As of 17 December 2012 no further options were 
eligible for vesting. There were no share grant expenses in 2014 (2013: nil).
The fair value of share options granted and of restricted shares issued is measured by use of the Black-Scholes pricing model with the following 
assumptions:
Year ended 31 December 2014
2009 Executive  
Share Option Plan
Share price 73.5p
Exercise price 100.0p–405.0p
Expected volatility 56.0%
Expected life 0–2 years
Risk free rate 0.5%
17. Other reserves – Group
At 31 December
2014 
US$ 000
2013 
US$ 000
Currency translation adjustment (76,049) (27,094)
Share grant expense 5,233 5,233
Total other reserves (70,816) (21,861)
18. Accumulated profit/(loss) – Group and Company
Group Company
At 31 December
2014 
US$ 000
2013 
US$ 000
2014 
US$ 000
2013 
US$ 000
Retained losses (30,779) (39,338) (5,797) (4,610)
Profit/(loss) for the year 13,058 8,559 (1,472) (1,187)
Equity dividends paid (3,038) – (3,038) –
Cancellation of share premium 165,873 – 165,873 –
Accumulated profit/(loss) 145,114 (30,779) 155,566 (5,797)
19. Trade and other payables
Group Company
At 31 December
2014 
US$ 000
2013 
US$ 000
2014 
US$ 000
2013 
US$ 000
Trade payables 268 432 16 10
Taxes other than profit tax 881 2,547 – –
Customer advances 524 890 – –
Total 1,673 3,869 16 10
The maturity of the Group’s and of the Company’s financial liabilities are all between zero to three months.
16. Share capital and share premium – Group continued
42 VOLGA GAS PLC  |  ANNUAL REPORT AND ACCOUNTS 2014 20. Investments – Company
Investments in subsidiaries, comprising ordinary share capital, are accounted for at cost. The Company’s subsidiaries are as follows:
Name Jurisdiction Nature of Operations % Owned From
Woodhurst Holdings Ltd. Cyprus Intermediate Holding Company 100% October 2005
Pre-Caspian Gas Company Russia Oil & gas exploration and production 100% May 2006
Gaznefteservice Russia Oil & gas exploration and production 100% September 2006
Shropak Investments Ltd Cyprus Dormant 100% June 2007
Volga Gas (Cyprus) Ltd. Cyprus Intermediate Holding Company 100% August 2007
Gazservice Russia Special purpose entity 99% October 2008
Volga Gas Finance Ltd. UK Intermediate Holding Company 100% March 2010
To avoid certain legal restrictions on land ownership in October 2008 Pre-Caspian Gas Company acquired a 99% shareholding in ZAO 
Gazservice. Subsequently, Pre-Caspian Gas Company sold an unimproved plot of land to ZAO Gazservice at cost basis.
Company
31 December 
2013 
US$ 000
Additions 
US$ 000
Disposals 
US$ 000
31 December 
2014 
US$ 000
Investments in Woodhurst Holdings 150,683 – – 150,683
Investments in Volga Gas (Cyprus) 1,551 – – 1,551
Total investments 152,234 – – 152,234
The Company funds its activities in the Russian Federation via Woodhurst Holdings, the Company’s Cyprus registered subsidiary.
21. Audit fees – Group and Company
During the year the Group (including its overseas subsidiaries) obtained the following services from the Company’s auditors and associates:
Year ended 31 December
2014 
US$ 000
2013 
US$ 000
Fees payable to Company’s auditor for the audit of Parent Company and consolidated financial statements 167 235
– Audit of the Company’s subsidiaries pursuant to legislation 24 19
– Other services pursuant to legislation 27 –
Total 218 254
22. Related Party Transactions – Group and Company
The Group is controlled by Baring Vostok Private Equity Funds III and IV, which respectively own 48.9% and 9.76% (in aggregate 58.66%) of the 
Company’s shares. The Baring Vostok Private Equity Funds exercise their control through a number of nominee holding companies. 
The remaining 41.34% of the shares are widely held.
The following transactions concerning purchases of goods and services were carried out by the Group with related parties:
Year ended 31 December
Related party Relationship Nature of transactions 2014 2013
Baring Vostok Cyprus Limited Affiliated with controlling shareholder Rent, services 5 127
Year-end balances arising from transactions with related parties.
31 December 
2014 
US$ 000
31 December 
2013 
US$ 000
Due to related parties
Baring Vostok (Cyprus) Limited 12 12
All transactions with related parties were made on commercial basis.
STRATEGIC  
REPORT
GOVERNANCE FINANCIAL 
STATEMENTS
43 VOLGA GAS PLC  |  ANNUAL REPORT AND ACCOUNTS 2014 Notes to the IFRS Consolidated Financial Statements 
continued
The following transactions were carried out between the Company and its wholly-owned subsidiaries:
Year ended 31 December
Group Company Relationship Nature of transactions 2014 2013
Woodhurst Holdings Limited 100% directly-owned subsidiary Reduction of receivables due 11,092 343
Year-end balances arising from transactions with subsidiaries
31 December 
2014 
US$ 000
31 December 
2013 
US$ 000
Accounts receivable from subsidiaries
Woodhurst Holdings Limited 4,606 15,697
Accounts receivable to subsidiaries
Woodhurst Holdings Limited 1,357 1,357
Key management
Key management of the Company is considered to be the directors. Details of key management compensation are presented in the Directors’ 
Remuneration Report and in note 5(d) above.
23. Contingencies and Commitments
23.1 Capital commitments
As of the balance sheet date all material licence commitments have been met.
23.2 Taxation
Russian tax, currency and customs legislation is subject to varying interpretations and changes which can occur frequently. Management’s 
interpretation of such legislation as applied to the transactions and activity of the Group may be challenged by the relevant regional and 
federal authorities. Recent events within the Russian Federation suggest that the tax authorities may be taking a more assertive position in 
their interpretation of the legislation and assessments, and it is possible that transactions and activities that have not been challenged in the 
past may be challenged. As a result, significant additional taxes, penalties and interest may be assessed. Fiscal periods remain open to review by 
the authorities in respect of taxes for three calendar years preceding the year of review, but under certain circumstances, reviews may cover 
longer periods.
At 31 December 2014, management believes that its interpretation of the relevant legislation is appropriate and the Group’s tax, currency and 
customs positions will be sustained.
23.3 Restoration, rehabilitation, and environmental costs
The Group operates in the upstream oil industry in the Russian Federation and its activities may have an impact on the environment. The 
enforcement of environmental regulations in the Russian Federation is evolving and the enforcement posture of government authorities is 
continually being reconsidered. The Group periodically evaluates its obligation related thereto. The outcome of environmental liabilities under 
proposed or future legislation, or as a result of stricter interpretation and enforcement of existing legislation, cannot reasonably be estimated 
at present, but could be material.
Under the current levels of enforcement of existing legislation, management believes there are no significant liabilities in addition to amounts 
which are already accrued and which would have a material adverse effect on the financial position of the Group.
23.4 Oilfield licences
The Group is subject to periodic reviews of its activities by governmental authorities with respect to the requirements of its oilfield licences. 
Management of the Group correspond with governmental authorities to agree on remedial actions, if necessary, to resolve any findings 
resulting from these reviews. Failure to comply with the terms of a licence could result in fines, penalties, licence limitation, suspension or 
revocation. The Group’s management believes any issues of non-compliance would be resolved through negotiations or corrective actions 
without any materially adverse effect on the financial position or the operating results of the Group.
The principal licences of the Group and their expiry dates are:
Field Licence Holder
Licence 
expiry date
Karpenskiy OOO Pre-Caspian Gas Company 2021
Urozhainoye-2 OOO Pre-Caspian Gas Company 2032
Vostochny-Makarovskoye OOO Gaznefteservice 2026
Dobrinskoye OOO Gaznefteservice 2026
22. Related Party Transactions – Group and Company continued
44 VOLGA GAS PLC  |  ANNUAL REPORT AND ACCOUNTS 2014 Notice is hereby given that the annual general meeting (the “AGM”) of Volga Gas plc (the “Company”) will be held at the London office of Akin 
Gump Strauss Hauer & Feld at Ten Bishops Square, London E1 6EG on 5 June 2015 at 10.00 a.m. for the following purposes:
Ordinary Resolutions
1. To receive and adopt the Company’s accounts for the year ended 31 December 2014 and the directors’ report.
2.  To declare a dividend of US$0.0125 per ordinary share for the year ended 31 December 2014.
3. To reappoint Michael Calvey, who retires by rotation, as a director.
4. To reappoint Mikhail Ivanov, who retires by rotation, as a director.
5. To reappoint Vladimir Koshcheev, who retires by rotation, as a director.
6. To appoint Andrey Zozulya as a director.
7. To reappoint KPMG LLP as auditor of the Company until the conclusion of the next general meeting at which accounts are laid before the 
members of the Company.
8. To authorise the directors to determine the remuneration of the auditor of the Company.
9. That the directors be and they are hereby generally and unconditionally empowered to exercise all the powers of the Company to allot 
shares in the Company and/or to grant rights to subscribe for or to convert any security for shares in the Company (together “Relevant 
Securities”) up to a maximum aggregate nominal amount of £1,000,000 to such persons and at such times and on such terms as they think 
proper, provided that this authority shall expire the earlier of (i) 15 months from the passing of this resolution, or (ii) the conclusion of the 
AGM of the Company to be held in 2016 (unless renewed, varied or revoked by the Company prior to or on such date), save that this 
authority shall allow the Company to make offers or agreements before the expiry of such authority which would or might require Relevant 
Securities to be allotted after such expiry and the directors shall be entitled to allot Relevant Securities pursuant to any such offer or 
agreement as if this authority had not expired; and all unexercised authorities previously granted to the directors to allot Relevant Securities 
be and are hereby revoked.
Special Resolutions
10. That the directors be and they are hereby empowered pursuant to Sections 570 and 573 of the Companies Act 2006 (the “Act”) to allot 
equity securities (as defined in Section 560 of the Act) for cash; pursuant to the authority conferred by resolution 9 set out in this Notice 
convening the AGM (the “Notice”) as if Section 561 of that Act did not apply to any such allotment, provided that this power shall be limited 
to:
(a) the allotment of equity securities in connection with a rights issue, open offer or other offer of securities in favour of the holders of 
ordinary shares on the register of members at such record date(s) as the directors may determine where the equity securities 
respectively attributable to the interests of the ordinary shareholders are proportionate (as nearly as may be) to the respective numbers 
of ordinary shares held by them on any such record date(s), subject to such exclusions or other arrangements as the directors may deem 
necessary or expedient to deal with fractional entitlements or legal or practical problems arising under the laws of any overseas territory 
or the requirements of any regulatory body or stock exchange or by virtue of shares being represented by depositary receipts or any 
other matter; and
(b) the allotment (otherwise than pursuant to sub-paragraph (a) above) to any person or persons of equity securities up to an aggregate 
nominal amount of £150,000.
 And the power conferred hereby shall expire upon the expiry of the general authority conferred by resolution 7 set out in this Notice (unless 
renewed, varied or revoked by the Company prior to or on such date), save that the Company shall be entitled to make offers or agreements 
before the expiry of such power which would or might require equity securities to be allotted after such expiry and the directors shall be 
entitled to allot equity securities pursuant to any such offer or agreement as if the power conferred hereby had not expired.
11. That the Company be generally and unconditionally authorised for the purposes of section 701 of the Act, to make market purchases (within 
the meaning of section 693 of the Act) of fully-paid ordinary shares of 1p each (“Shares”) on such terms and in such manner as the directors 
of the Company may decide provided that:
(i)  the maximum number of Shares that may be purchased by the Company pursuant to this authority is 12,144,000 (representing 
approximately 14.99% of the Company’s issued ordinary share capital at the date of this Notice;
(ii) the minimum price (exclusive of expenses) which may be paid for any such Shares shall not be less than the nominal value of that Share at 
the time of purchase;
(iii)  the maximum price (exclusive of expenses) which may be paid for any Shares purchased pursuant to this authority is an amount equal to 
the higher of (a) an amount equal to 105% of the average of the middle market prices shown in the quotations for the Company’s Shares 
in the London Stock Exchange Daily Official List for the five business days immediately preceding the day on which that Share is 
contracted to be purchased; and (b) an amount equal to the higher of the price of the last independent trade of an ordinary share and 
the highest current independent bid for an ordinary share as derived from the London Stock Exchange; and
(iv)  unless previously varied, revoked or renewed, the authority conferred by this resolution shall expire on the earlier of 30 June 2016 or at 
the end of the next annual general meeting of the Company to be held in 2016, but the Company may make a contract to purchase 
Shares under this authority before its expiry which will or may be completed wholly or partly after the expiry of this authority, and may 
complete such a purchase as if this authority had not expired.
Registered Office:
Ground Floor 
17-19 Rochester Row 
London 
SW1P 1QT
BY ORDER OF THE BOARD
Tony Alves
Company Secretary
24 April 2015
Notice of Meeting
STRATEGIC  
REPORT
GOVERNANCE FINANCIAL 
STATEMENTS
45 VOLGA GAS PLC  |  ANNUAL REPORT AND ACCOUNTS 2014 Notice of Meeting continued
Notes:
1. Resolutions 1-9 are ordinary resolutions. For these resolutions to be passed, a simple majority of the votes cast at the Company’s AGM must be in favour of the resolutions. 
Resolutions 10 and 11 are special resolutions. For these resolutions to be passed, at least three-quarters of the votes cast at the AGM must be in favour of the resolution.
2. Resolution 2 sets the final dividend which, if approved, will be paid on 10 June 2015 to shareholders on the register of members of the Company on 15 May 2015.
3. Share buy-back (Resolution 11). The purpose of Resolution 11 is to permit the Company to purchase its own shares in the market under the terms described therein. Shares so 
purchased would be cancelled and the issued share capital of the Company accordingly reduced.
4. Only those members entered on the register of members of the Company at 6.00 p.m. on 3 June 2015 or, in the event that this meeting is adjourned, in the register of members as 
at 6.00 p.m. on the day two days before the date of any adjourned meeting, shall be entitled to attend and vote at the meeting in respect of the number of ordinary shares 
registered in their names at that time. Changes to the entries on the register of members after 6.00 p.m. on 3 June 2015 or, in the event that this meeting is adjourned, in the 
register of members after 6.00 p.m. on the day two days before the date of the adjourned meeting, shall be disregarded in determining the rights of any person to attend or vote at 
the meeting.
5. A member entitled to attend, speak and vote at the meeting convened by the notice set out above is entitled to appoint a proxy to attend, speak and, on a poll, to vote in his place. 
To appoint more than one proxy you may photocopy this form. Please indicate the proxy holder’s name and the number of shares in relation to which they are authorised to act as 
your proxy (which, in aggregate, should not exceed the number of shares held by you). Please also indicate if the proxy instruction is one of multiple instructions being given. All 
forms must be signed and should be returned together in the same envelope.
6. A form of proxy is enclosed. To be effective, it must be deposited at the office of the Company’s registrars (Capita Asset Services, PXS, 34 Beckenham Road, Beckenham, Kent BR3 
4TU) so as to be received not later than 48 hours before the time appointed for holding the AGM. Completion of the proxy does not preclude a member from subsequently 
attending and voting at the meeting in person if he or she so wishes.
7. To change your proxy instructions simply submit a new proxy appointment using the methods set out in notes 4 and 5 above. Note that the cut-off time (in note 4 above) for receipt 
of proxy appointments also apply in relation to amended instructions; any amended proxy appointment received after the relevant cut-off time will be disregarded.
 Where you have appointed a proxy using the hard-copy proxy form and would like to change the instructions using another hard-copy proxy form, please contact the Company’s 
registrars. If you submit more than one valid proxy appointment, the appointment received last before the latest time for the receipt of proxies will take precedence.
8. In order to revoke a proxy instruction you will need to inform the Company using one of the following methods:
(a) by sending a signed hard copy notice clearly stating your intention to revoke your proxy appointment to the Company’s registered office address. In the case of a member which 
is a company, the revocation notice must be executed under its common seal or signed on its behalf by an officer of the company or an attorney for the company. Any power of 
attorney or any other authority under which the revocation notice is signed (or duly a certificated copy of such power of authority) must be included with the revocation notice; 
or
(b) by sending an email to info@volgagas.com.
 In either case, the revocation notice must be received by the Company’s registrars no later than the cut-off time set out in note 3 above.
9. The register of interests of the directors and their families in the share capital of the Company and copies of contracts of service of directors with the Company or with any of its 
subsidiary undertakings will be available for inspection at the registered office of the Company during normal business hours (Saturdays and public holidays excepted) from the 
date of this notice until the conclusion of the AGM.
10. To appoint a proxy or to give or amend an instruction to a previously appointed proxy via the CREST system, the CREST message must be received by the issuer’s agent RA10 no later 
than forty eight hours before the meeting date. For this purpose, the time of receipt will be taken to be the time (as determined by the timestamp applied to the message by the 
CREST Applications Host) from which the issuer’s agent is able to retrieve the message. After this time any change of instructions to a proxy appointed through CREST should be 
communicated to the proxy by other means. CREST Personal Members or other CREST sponsored members, and those CREST Members who have appointed voting service 
provider(s) should contact their CREST sponsor or voting service provider(s) for assistance with appointing proxies via CREST. For further information on CREST procedures, 
limitations and system timings please refer to the CREST Manual. We may treat as invalid a proxy appointment sent by CREST in the circumstances set out in Regulation 35(5) (a) of 
the Uncertificated Securities Regulations 2001. In any case your proxy form must be received by the Company’s registrars no later than forty eight hours before the meeting date.
11. Any corporation which is a member can appoint one or more corporate representatives who may exercise on its behalf all of its powers as a member provided they do not do so in 
relation to the same shares.
12. Under section 319A of the 2006 Act, the Company must cause to be answered any question relating to the business being dealt with at the Annual General Meeting put by a 
member attending the meeting unless answering the question would interfere unduly with the preparation for the meeting or involve the disclosure of confidential information, or 
the answer has already been given on a website in the form of an answer to a question, or it is undesirable in the interests of the Company or the good order of the meeting that the 
question be answered.
 Members who have any queries about the Annual General Meeting should contact the Company Secretary by email on info@volgagas.com. Members may not use any electronic 
address or fax number provided in this notice or in any related documents (including the Form of Proxy) to communicate with the Company for any purpose other than those 
expressly stated.
13. Information regarding the Annual General Meeting, including information required by section 311A of the 2006 Act, and a copy of this notice of Annual General Meeting is available 
from www.volgagas.com.
46 VOLGA GAS PLC  |  ANNUAL REPORT AND ACCOUNTS 2014 2-D seismic geophysical data that depicts the subsurface strata in two dimensions.
3-D seismic geophysical data that depict the subsurface strata in three dimensions. 3-D seismic typically provides a more 
detailed and accurate interpretation of the subsurface strata than 2-D seismic.
abandonment application of a cement plug to close a well and welding of a steel plate to the top of the well; the well is then 
plugged and abandoned.
bbl the standard barrel of crude oil or other petroleum product is 42 US gallons (approximately 159 litres).
bcf billion cubic feet.
bcm billion cubic metres.
best estimate the term “best estimate” is used here as a generic expression for the estimate considered to be the closest to the 
quantity that will actually be recovered from the accumulation between the date of the estimate and the time of 
abandonment.
boe barrels of oil equivalent, being for natural gas the energy equivalent on one barrel of oil. The usual ratio is to equate 
6,000 cubic feet to one barrel of oil equivalent.
condensate liquid hydrocarbons associated with the production from a primarily natural gas reservoir.
field means an area consisting of either a single reservoir or multiple reservoirs, all grouped on or related to the same 
individual geological structural feature and/or stratigraphic condition.
gas natural gas.
gas processing facilities together with the laboratory, gathering pipelines and storage facilities (if any), a plant comprising one or more units 
such that after conditioning the gas will be of pipeline quality as, specified by Gazprom, such units may include 
dehydration, sweetening and separation of natural gas liquids.
gas-water contact bounding surface in a reservoir above which predominantly gas occurs and below which predominantly water occurs.
hydrocarbons compounds formed from the elements hydrogen (H) and carbon (C) and existing in solid, liquid or gaseous forms.
Kungurian Salt a layer of salt laid down during the lower Permian age which occurs in the Northern Caspian Petroleum Province.
licence area the particular subsoil plot specified in the subsoil licence issued by the applicable Russian federal authority, which 
the licence holder has the right to use for the purpose and on the terms specified in the subsoil licence. A licence 
area may contain one or more fields or may encompass only a portion of a field.
liquidation abandonment.
mmbbls million barrels.
mcm thousand cubic metres.
mmBOE million barrels of oil equivalent.
natural gas hydrocarbons that are gaseous at one atmosphere of pressure at 20°C. It can be divided into lean gas, primarily 
methane but often containing some ethane and smaller quantities of heavier hydrocarbons (also called sales gas) 
and wet gas, primarily ethane, propane and butane as well as smaller amounts of heavier hydrocarbons; partially 
liquid under atmospheric pressure.
petroleum naturally occurring liquids and gases which are predominantly comprised of hydrocarbon compounds.
possible reserves are those unproven reserves that, on the available evidence and taking into account technical and economic factors, 
have a 10% chance of being produced.
probable reserves are those reserves in which hydrocarbons have been located within the geological structure with a lesser degree of 
certainty because fewer wells have been drilled and/or certain operational tests have not been conducted. Probable 
reserves are those reserves that, on the available evidence and taking into account technical and economic factors, 
have a better than 50% chance of being produced.
prospective resources are those quantities of hydrocarbons which are estimated, on a given date, to be potentially recoverable from 
undiscovered accumulations.
proved reserves include reserves that are confirmed with a high degree of certainty through an analysis of development history and/
or volume method analysis of the relevant geological and engineering data. Proved reserves are those that, based 
on the available evidence and taking into account technical and economic factors, have a better than 90% chance of 
being produced.
proved plus 
probable reserves
sum of the proved reserves and the probable reserves calculated in accordance with SPE standards.
reserves quantities of petroleum which are anticipated to be commercially recoverable from known accumulations from a 
given date forward.
reservoir a porous and permeable underground formation containing a natural accumulation of producible natural gas and/or 
oil that is confined by impermeable rock or water barriers and is separate from other reservoirs.
risk factor for contingent resources means the estimated chance, or probability, that the volumes will be commercially 
extracted; for prospective resources means the chance or probability of discovering hydrocarbons in sufficient 
quantity for them to be tested to the surface, this, then, is the chance or probability of the prospective resource 
maturing into a contingent resource.
SPE standards reserves definitions consistent with those approved in March 1997 by the Society of Petroleum Engineers and the 
World Petroleum Congresses.
sub-salt below the Kungurian salt layer.
supra-salt above the Kungurian salt layer.
Glossary of T echnical T erms
STRATEGIC  
REPORT
GOVERNANCE FINANCIAL 
STATEMENTS
47 VOLGA GAS PLC  |  ANNUAL REPORT AND ACCOUNTS 2014 Corporate Directory
Registered Office
Ground Floor, 17-19 Rochester Row
London SW1P 1QT
United Kingdom
Company Secretary
Tony Alves
of the registered office
Nominated Adviser and Broker
Stifel Nicolaus Europe Limited
150 Cheapside
London EC2V 6ET
United Kingdom
Auditor
KPMG LLP
15 Canada Square
London E14 5GL
United Kingdom
Lawyers and Solicitors to the Company as to English and Russian Law
As to English law:
Akin Gump Strauss Hauer & Feld
8th Floor, Ten Bishops Square
London E1 6EG
United Kingdom
As to Russian law:
Akin Gump Strauss Hauer & Feld LLP
Geneva House 7 Petrovka Street
Moscow 107031
Russian Federation
Registrar
Capita Registrars
The Registry
34 Beckenham Road, Beckenham
Kent BR3 4TU
United Kingdom
Corporate Communications/PR
FTI Consulting
200 Aldersgate, Aldersgate Street
London EC1A 4HD
United Kingdom
48 VOLGA GAS PLC  |  ANNUAL REPORT AND ACCOUNTS 2014 Karpensky
Vostochny
Makaroyskoye
Dobrinskoye
Russia
Moscow
Karpensky
Vostochny
Makaroyskoye
Dobrinskoye
BLACK 
SEA Volga Gas plc
Ground Floor
17–19 Rochester Row
London
SW1P 1QT
www.volgagas.com
VOLGA GAS PLC  |  ANNUAL REPORT AND ACCOUNTS 2014