SOURCE: O.A.O. Tatneft

June 26, 2006 04:33 ET

O.A.O. Tatneft announces Delisting from NYSE

Taterstan -- (MARKET WIRE) -- June 26, 2006 --

June 26, 2006

On June 26, 2006, OAO Tatneft issued the following press release:

June 26, 2006

For immediate release

OAO Tatneft announces its intention to delist from the New York Stock Exchange and to terminate its registration with the SEC

OAO Tatneft (NYSE: TNT; LSE: ATAD) (the "Company") announced today that it plans to delist voluntarily from the New York Stock Exchange (the "NYSE") so as to concentrate trading in its equity securities outside of the Russian Federation on the London Stock Exchange(the "LSE"). In addition, when circumstances permit, the Company intends to apply for termination of the registration of its ordinary shares with the U.S. Securities and Exchange Commission (the "SEC").

The decision to delist from the NYSE and to terminate the registration with the SEC has been taken following a review of the appropriateness of maintaining multiple international listings. The Company is the only major Russian issuer to have a listing in both London and New York. Given the increase in recent years in costs associated with the registration of the Company's securities with the SEC, a decision was made to concentrate international trading of the Company's equity securities in London. The Company believes that direct cost savings, resulting from the planned de-listing and deregistration in the United States, can be realized for shareholders and that the focus on a single international trading market for the Company's equity securities may increase liquidity.

The Company currently expects to file its application for delisting from the NYSE in mid-August 2006. Following delisting from the NYSE and pending the filing of the Company's application for deregistration from the SEC, the Company will remain subject to the regulations of the SEC. To facilitate termination of the registration of its ordinary shares with the SEC, the Company is considering amendments to the deposit agreement relating to its ADR facility (the "Deposit Agreement") that would prevent persons resident in the United States (other than certain "qualified institutional buyers" identified by the Company acting in its sole discretion) from participating in the facility. The Company currently expects that The Bank of New York, the depositary for the ADR facility (the "Depositary") and the Company will sign these amendments, and that the Depositary will give formal notice of the amendments to registered owners of ADRs, on or about July 10, 2006. The Company intends to reserve the right to refrain from implementing the proposed amendments to the Deposit Agreement in the event that the SEC adopts new rules relating to deregistration in a form that would permit the Company to deregister without implementing those amendments.

The Company's representatives will discuss the planned delisting and deregistration and U.S. GAAP financial highlights for 2004 and the first half of 2005 on a conference call at 9 a.m., Eastern Daylight Time, 2 p.m. British Summer Time, 5 p.m. Moscow time on Tuesday, June 27, 2006. To participate in this conference call, dial one of the following numbers using participant code C915967:

 

U.K.: +44 (20) 8996 3920 
U.S.: +1 (888) 481 7939 (toll free from the U.S.) 
U.S.: +1 (617) 847 8707 

Further information on the Company's current expectations regarding timing of the various steps associated with the planned delisting and the proposed amendments to the Deposit Agreement can be found in Appendix A. Further information regarding the proposed amendments to the Deposit Agreement and related matters can be found in Appendix B.

For additional information, please contact:


Media
UK        Greg Quine
          Jon Simmons
          Andrew Dowler
          Financial Dynamics, London
          +44 (20) 7831 3113

USA       Brian Maddox
          Greg Jawski
          Financial Dynamics, New York
          +1 (212) 850 5600

Russia    Michael Guerin
          Financial Dynamics, Moscow
          +7 (495) 795 0623


Investor Relations:

Vladlen Voskoboinikov
Vasily Mozgovoi
OAO Tatneft
+7 (495) 980 5226

Important disclaimer:

This document contains "forward-looking statements" as that term is defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are identified by the words "expects," "intends," "will," "seeks," "plans," "proposes," "anticipates" and similar expressions. Forward-looking statements are based on current plans, estimates and projections. A number of factors could cause actual results or outcomes to differ materially from those expressed in or implied by the forward-looking statements, including the risk of legal or regulatory action that may delay amendment of the Deposit Agreement, termination of registration of the Company's ordinary shares with the SEC or other proposed measures described in this press release, the risk that trading in the Company's securities may not develop as currently expected, as well as the risks described in the documents that the Company has filed with the SEC, including the Annual Report on Form 20-F for 2004 as filed with the SEC on the date of this press release. Investors and security holders can obtain a free copy of documents that the Company has filed with the SEC at www.sec.gov. Forward-looking statements speak only as of the date they are made, and the Company does not undertake any duty to update or revise forward-looking statements.

                              Appendix A

                          Expected Timetable

The Company currently expects to proceed with the delisting from the NYSE and the amendments to the Deposit Agreement on the timetable set forth below, which is subject to change in the discretion of the Company. The proposed amendments to the Deposit Agreement and the establishment of a new Rule 144A deposit facility (as defined in Appendix B) also are subject to the Company obtaining any regulatory approvals that may be required in the Russian Federation or elsewhere.

June 30, 2006                 Board of Directors of the
                              Company considers a
                              resolution authorizing the
                              Company to (a) amend Deposit
                              Agreement, (b) enter into new
                              deposit agreement relating to
                              the Rule 144A Deposit
                              Facility,
                              (c) apply for delisting from
                              the NYSE, and (d) apply, when
                              circumstances permit, for
                              termination of registration
                              of the Company's ordinary
                              shares with the SEC

July 7, 2006                  The Company files with the
                              SEC a post-effective
                              amendment to the Registration
                              Statement on Form F-6
                              relating to the ADRs to
                              remove from registration all
                              previously registered but
                              unissued ADRs

July 10, 2006                 The Company and the
                              Depositary sign amendments to
                              Deposit Agreement; Depositary
                              gives notice of amendments to
                              Owners (as defined in Deposit
                              Agreement)

August 10, 2006               Amendments to Deposit
                              Agreement take effect

August 18, 2006               The Company files its
                              application for delisting
                              from the NYSE

August 18, 2006               Expected date of announcement
                              of the Certification Date (see Appendix B)

Fourth quarter, 2006          Filing with the SEC of the Company's 
                              annual report on Form 20-F for the year 
                              ended December 31, 2005

Fourth quarter, 2006          Certification Date (see Appendix B)

Fourth quarter, 2006 (within  Depositary commences sale
few business days after the   (outside the U.S.) of
Certification Date)           ordinary shares underlying
                              all GDRs except those
                              beneficially owned by persons
                              who (i) have certified that
                              they are not "resident in the
                              United States" or
                              (ii) have certified that they
                              are QIBs and have been
                              approved by the Company

Fourth quarter, 2006          Beneficial owners other than
(following completion of      those who (i) have certified
sales of ordinary shares by   that they are not "resident
the Depositary)               in the United States" or (ii)
                              have certified that they are
                              QIBs and have been approved
                              by the Company, may receive
                              pro rata net proceeds of sale
                              of shares underlying their
                              GDRs against surrender of
                              their GDRs and payment of the
                              Depositary's fee and any
                              other applicable charges and
                              taxes

Appendix B

Proposed Amendments to Deposit Agreement

The proposed amendments to the Deposit Agreement would include principally the following:


  * Requiring that, on or before a date designated by the Company and the
    Depositary with at least 30 days' prior notice to owners of ADRs 
    (the "Certification Date"), beneficial owners of the ADRs must 
    certify either (i) that they are not resident in the United States or 
    (ii) that they are "qualified institutional buyers" or "QIBs" and 
    that they request to be permitted to continue to hold GDRs following
    the Certification Date;(1)
  * Redesignating the ADRs as "Global Depositary Receipts" ("GDRs") with
    effect as of a few business days after the Certification Date;
  * Introducing a provision that the ordinary shares underlying all GDRs
    except those beneficially owned by persons who, on or before the
    Certification Date, (i) have certified that they are not "resident in 
    the United States" or (ii) have certified that they are QIBs and have 
    been approved by the Company, will be sold by Depositary outside the 
    United States pursuant to Regulation S under the U.S. Securities Act 
    of 1933, as amended (the "Securities Act"), and that, upon completion 
    of those sales, the proceeds of those sales will be transferred to 
    the beneficial holders of such GDRs;
  * Introducing a provision that deposits into the restructured GDR 
    facility will be accepted only from persons who are not resident in 
    the United States; and
  * Introducing a provision that transfers of the GDRs may not be made to
    U.S.-resident persons other than to QIBs who take delivery pursuant 
    to a new deposit facility that the Company intends to establish to 
    permit (i) purchase and holding of depositary receipts representing 
    the Company's ordinary shares by U.S.-resident QIBs and (ii) trading 
    in such depositary receipts among U.S.-resident QIBs (the "Rule 144A 
    Deposit Facility").

The amendments to the Deposit Agreement would provide that the Company may instruct the Depositary to refrain from selling ordinary shares underlying GDRs beneficially owned by certain QIBs identified by the Company acting in its sole discretion, even if such QIBs are resident in the United States. The Company currently expects to exercise this discretion to permit certain U.S.-resident QIBs with the largest holdings of ADRs prior to the Certification Date to continue to hold GDRs after the Certification Date, so long as this does not in the Company's view jeopardize the Company's ability to terminate the registration of its ordinary shares with the SEC under applicable rules. The amendments to the Deposit Agreement also would provide that the Company may, from time to time, serve a mandatory notice on any one or more such QIBs (identified by the Company, acting in its sole discretion) requiring them to transfer their GDRs to a non-U.S. resident person or, upon expiration of a reasonable period, to require the ordinary shares underlying the GDRs beneficially owned by such QIBs to be sold by the Depositary outside the United States pursuant to Regulation S under the Securities Act, and that, upon completion of those sales, the proceeds of those sales will be transferred to such QIBs. The new deposit agreement that the Company and the Depositary propose to enter to establish the Rule 144A Deposit Facility would contain a similar provision.

The GDRs would remain listed on the LSE. The depositary receipts issued from the Rule 144A Deposit Facility would not be listed on the LSE or on any other securities exchange.

The Company is aware that the SEC has proposed new rules governing termination of registration of securities under the Securities Exchange Act of 1934, as amended. Such rules, when adopted by the SEC, may permit the Company to terminate the registration of its ordinary shares with the SEC without the need to amend its Deposit Agreement as described above. If and when such rules are adopted, the Company intends to reassess the Deposit Agreement (and the new deposit agreement relating to the Rule 144A Deposit Facility) to determine whether restrictions on participation in the related depositary receipt facilities by persons resident in the United States could be relaxed without jeopardizing the Company's ability to terminate the registration of its ordinary shares with the SEC.

--------------------------

(1) Under the amendments to the Deposit Agreement, a beneficial owner's certification that he, she or it either (i) is not "resident in the United States" or (ii) is a QIB and requests permission to continue to hold GDRs will not be effective unless the beneficial owner, together with the certification, deposits its GDR with the Depositary or transfers the relevant GDRs to a blocked account with The Depository Trust Company, in either case until after the Certification Date. The purpose of this requirement is to prevent beneficial owners that have either (i) certified non-U.S. residence or (ii) certified QIB status and requested permission to continue to hold GDRs from transferring their ADRs to a person who is resident in the United States prior to the Certification Date.

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