AAOG.L Regulatory News (AAOG)

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF REGULATION 596/2014 ("MAR").

Anglo African Oil & Gas plc ("AAOG" or "the Company")

Put and call option with Zenith

Anglo African Oil & Gas plc, an independent oil and gas developer, announces that it has today entered into a term sheet for a put and call option agreement with Zenith Energy Ltd ("Zenith") over the residual holding of 20 per cent in Anglo African Oil & Gas Congo SAU ("AAOG Congo") that AAOG will retain ("the Residual Shares") following the disposal by the Company of 80 per cent of its interest in AAOG Congo to Zenith (the "Disposal"), assuming shareholders vote in favour of the resolutions effecting the Disposal at the general meeting of AAOG to be held today.

The term sheet for the put and call option provides for the following key provisions:

Call option

The Call Option over the Residual Shares requires AAOG, at Zenith's request, to sell the Residual Shares to Zenith. The Call Option may only be exercised by Zenith on 16 January 2021 and can only be exercised if, as at 15 January 2021, the total production at the Tilapia oil field has never exceeded an average of at least 2,000 boepd for any consecutive 30 day period prior to 15 January 2021.

If the Call Option is exercised, the consideration payable by Zenith for the Residual Shares shall be an amount of £1,000,000 ("Call Option Consideration"). The Call Option Consideration is to be settled by the issue of ordinary shares in Zenith, the number of ordinary shares to be issued being calculated based on a VWAP (volume-weighted average price) of Zenith's ordinary shares in the 15-day period immediately prior to exercise of the Call Option.

Put option

The Put Option over the Residual Shares requires Zenith, at AAOG's request, to acquire the Residual Shares from AAOG. The Put Option may only be exercised by the Company on 16 January 2021 and can only be exercised if, as at 15 January 2021, the total production at the Tilapia oil field has been an average of at least 4,000 boepd for any 30 consecutive day period prior to 15 January 2021.

If the Put Option is exercised, the consideration payable by Zenith for the Residual Shares shall be an amount of £2,500,000 ("Put Option Consideration"). The Put Option Consideration is to be settled by the issue of ordinary shares in Zenith, the number of ordinary shares to be issued being calculated on a VWAP of Zenith's ordinary shares in the 15-day period immediately prior to exercise of the Put Option.

The Company is in the process of agreeing and entering into the final form of the Put and Call Option agreement and a further announcement will be made on this in due course.

Sarah Cope, chair of AAOG, said, "We are very pleased to have agreed these terms with Zenith which protects the upside value for shareholders in AAOG in the event that Zenith succeed in increasing production to 4000 boepd. The board believes that this will give the Company's shareholders comfort in AAOG's ability to liquidate its holding in a successful AAOG Congo following the investment that Zenith has committed to make into Tilapia."

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