NOVY NEFT II LIMITED - Further Repurchase of Shares in the Market

In the announcements the Directors reiterated that the Company would buy back Shares in the market for cancellation should they become available, in order to address any imbalance between the supply and demand for the Company's Shares.

To date the Company has bought back and cancelled 3,840,274 Ordinary Shares or 38% of the issued share capital of the Company.

At a meeting of the Directors held on 15 March 2005, the Directors resolved that the Company may repurchase up to a further 10% of its issued share capital (based on the issued share capital as at 19 August 2004) at a discount to Net Asset Value.

In order to address a continued imbalance between supply and demand, the Directors have determined that they will offer to buy back up to a further 10% of the issued share capital of the Company at the end of March 2005.

So as not to disadvantage the remaining shareholders, the price at which shares will be bought back will be determined by reference to the average price at which the underlying Gazprom structures are sold in the market in order to raise the cash necessary to pay the selling shareholders and will be at a 1% discount to that price.

A copy of this announcement (to include a reply slip for use by those Shareholders who may wish to participate in the buy back) is to be distributed to all Shareholders.  Those Shareholders wishing to participate should complete the reply slip as directed and return as soon as possible, and in any event no later than 5pm on 29 March 2005 to the Registrar and transfer agent, Bermuda Trust (Isle of Man) Limited, PO Box 34, 12/13 Hill Street, Douglas, Isle of Man IM1 1EF, British Isles (Fax: (44) 1624 637778).

If demand is received for more than 10% of the shares to be bought back and cancelled, then Shares will be bought back on a pro rata basis.  The record date for the buy back will be 29 March 2005.

The Directors would like to remind shareholders that the Company's Prospectus states that at each annual general meeting falling after the anniversary of the Company's launch €˜an ordinary resolution shall be proposed that the Company continue as an investment company. If that resolution is not passed, the Directors are required to formulate proposals to be put to shareholders for the winding up or other reorganisation or reconstruction of the Company'.

The Company was structured to ensure that mechanisms were put in place designed to prevent the shares of the Company trading at a substantial discount to Net Asset Value.  The inclusion of a continuation resolution at each annual general meeting falling after the anniversary of the Company's launch is one such mechanism.  If the resolution is not passed, the Directors are required to formulate proposals to be put to Shareholders for the winding-up or other reorganisation or reconstruction of the Company.  The annual general meeting is due to be held before the end of July 2005 and the Directors would like to confirm that there will be no further tender or buy back of Shares before that date.

Additionally, the Placing Memorandum provided that:

€˜ The Directors believe that the investment rationale of the Company may cease to exist if the Russian Government lifts the current foreign ownership restrictions pertaining to the local shares of Gazprom.  In these circumstances the Directors currently would intend to call an extraordinary general meeting of the Company to propose to Shareholders that the Company proceed to a voluntary winding-up.'

Expected Timetable

Receipt of Buyback Requests                                              29 March 2005

Buy Back Price Determined                                                          31 March 2005 

Shares Repurchased and Cancelled                     31 March 2005

Details of Buyback announced                                           1 April 2005

Distribution of Proceeds                                                              By 29 April 2005

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