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Mayan Energy Ltd / Index: AIM / Epic: MYN/ ISIN: VGG6622A1057 / Sector: Oil and Gas

 30 April 2019

Mayan Energy Ltd ('Mayan' or 'the Company')

To Acquire 100% of Attis Oil & Gas Ltd, Directorate Change, Capital Raise and Name Change

Mayan Energy Ltd (London AIM: MYN) is pleased to announce that it has entered into a conditional share purchase agreement to acquire 100% of Attis Oil & Gas Limited and its subsidiaries, affiliates and related entities (collectively referred to as "Attis"), a proven US oil & gas operator which holds a 50% interest in the Fort Worth Field, TX and operates 98 wells across 5,100 acres in the Fort Worth Basin ('the Acquisition'). In addition, Attis has already been instrumental in successfully optimising production at Mayan's Austin Field and is currently reworking the Company's Zink Ranch Field. The consideration for the Acquisition is £1.33m to be satisfied by the issue of 952,197,460 new Ordinary Shares at a price of 0.14 pence per Ordinary Share ("Consideration Shares"). The Acquisition is conditional on completion of the Placing, as detailed below.

The Company also intends to raise up to £700,000 gross proceeds ("Placing") via the issue of new ordinary shares of no par value in the capital of the Company (the "Placing Shares") to fund further field enhancement work at Austin Chalk, initiation of operations at Zink Ranch, a five well workover programme at the Fort Worth Field, and sub-surface studies at Zink Ranch and Austin Chalk. The Acquisition is conditional on the completion of the Placing.

Key Shareholders of Attis including the incoming executive director have indicated their intention to subscribe for Placing Shares in the Placing following publication of this Announcement. The details of these subscriptions will be announced separately in due course.

Following the Acquisition, it is proposed that the Company change its name to Attis Oil and Gas Limited. A further announcement will be made once the timing for this change is agreed with a new TIDM and website address to be announced at that time.

Overview:

· Acquisition to transform combined group's revenue / cash flow profile and provides Mayan with an in-house, experienced, operating team

· Attis has a 50% interest in 98 wells across 5,100 acres in the Fort Worth Field, Texas which currently produces 41 boepd net to Attis

· As operator of the Fort Worth Field asset, Attis generates approximately US$34,000 per calendar month in additional operating revenue

· Attis' oilfield services division, which also provides third parties with oilfield services, opens up an additional business line with growth potential

· Acquisition increases Mayan's acreage and net production to 8,841 acres and 98 boepd respectively, based on Mayan current net production of 57 boepd and transforms Mayan into a cash flow positive operator:

o Pro forma group turnover of approximately US$190,000 per month (based on current combined production and Attis operator revenues)

o Economies of scale savings generated across the new entities with initial combined company cost savings of c. US$20,000 per month due to elimination of third party operator charges for Mayan's Zink Ranch and Austin fields

· Thom Board, Attis' CEO and current Mayan technical advisor will join Mayan as its Chief Operating Officer and executive director - Mr. Board will be in charge of all of the day to day operations of the combined entities in the US

· £1.33m acquisition cost to be settled via issue of 952,197,460 new Ordinary Shares in Mayan at 0.14p per share ("Consideration Shares") representing 23.8% of the enlarged issued share capital following the Placing and Acquisition

· Attis shareholders have indicated their intention to invest £165,000 in the Placing.

Paolo Amoruso, Chairman of Mayan, said, "The rationale for this merger is one of operational efficiency, economies of scale, increased acreage and production, exposure to a service provider and the creation of a cash flow positive platform from which to grow the enlarged group further.

"Over the last six months, we have undertaken a systematic review of Mayan's portfolio of assets, engaged Attis to rework our Austin Field and now implement an optimisation programme at Zink Ranch. During this time, we focused on improving our internal organisation and balance sheet and have been extremely impressed with Mr. Board and his operating team. We quickly recognised that to transition to the next phase we needed an experienced operational team and we jointly recognised that the combined entities would strongly benefit from an amalgamation in order to build a solid, profitable oil and gas production company. This is an exciting period for Mayan, as we transition away from the asset review period and begin our next phase of transformation with work programmes underway across the enlarged group's portfolio. I look forward to providing further updates on our progress."

Rationale of the transaction:

As Mayan transitions to assume full operator status in both Texas and Oklahoma, the acquisition of Attis is highly beneficial as it provides a US based oilfield operations team that will be crucial in the development of the existing fields, as well as expertise in the assessment and acquisition of additional properties. It is expected that the integration of Attis into the Mayan structure will deliver an initial direct cost saving of c. US$20,000 per month due to the removal of third-party operator charges that currently apply at the Zink Ranch and Austin fields.

Following the results reported from Mayan's Austin Field on 15th April 2019, the combined group is expected to generate revenue of approximately US$190,000 (US$60 WTI/$US2.60 NYMEX Gas) per calendar month. The combined acreage of the group following the Acquisition will total 8,481 acres which is comprised of 1,378 acres at the Austin Field, TX; 1,640 acres at Zink Ranch, OK; and 5,153 acres at the Fort Worth Field, TX.

The combined group's existing acreage offers near term production upside including the recent workover of six wells at the Austin Field. In addition, a five well workover programme is planned for May 2019 at the Attis operated Fort Worth Field, TX in tandem with an initial field operations clean up at Zink Ranch which has commenced. The combined Mayan /Attis development platform is expected to generate a pipeline of opportunities through operating contracts and new field development.

Further, Attis has developed an oilfield service function that is beginning to grow into a standalone business. This function will allow for diversification of services across business lines and provide opportunities to grow the technical and operational capacity in-house in the near future.

Attis Summary

Attis is a 50% JV owner of the Fort Worth Field, with APEG Palo Pinto LP. The Fort Worth Field, TX is operated by Attis which currently produces 580 MCFPD of gas and 5bbl. of oil per day - net 41 boepd to Attis. In addition, Attis currently generates US$34,000 per month of operational income from operating the Fort Worth JV.

The Attis operating team currently provides a wide range of operational services for 98 owner operated oil & gas wells in the Fort Worth Field, Texas Panhandle and West Texas where it is also executing a well workover and development plan. As previously announced, Attis currently operates the Austin and Zink Ranch fields for Mayan.

The Attis operations team is headquartered in Borger, TX with a field office in Mineral Wells, TX. Attis' employees are complemented by additional field personnel, including operations managers, pumpers, roustabout, accounting, reporting and geology personnel.

For the year ended 31 December 2018, being the latest period available, Attis made a loss before tax of US$35,153 on turnover of US$53,405 and had net assets of $195,000. During the first quarter of 2019 Attis generated turnover of approximately US$299,000 and US$46,000 in free cashflow.

Directorate Changes

Thom Board, CEO of Attis, will join the board of Mayan as Executive Director and will be appointed the Chief Operating Officer and CEO of US operations and Russell Lamming, CEO of AIM-traded Keras Resources PLC, will be appointed as a non-executive director. Both appointments are subject to Nomad due diligence checks and approval which have commenced. At the time of their appointment, JD McGraw, a Non-Executive Director, will retire from the Mayan board.

Executive Share Option Scheme

Following completion of the Acquisition, it is the intention of the Board to put in place an executive incentive plan for up to 10% of the enlarged share capital. Further details of the plan and awards of Executive Options will be announced in due course.

Details of the Placing

The Company intends to raise up to £700,000 gross proceeds via a placing of 500,000,000 new ordinary shares of no par value in the capital of the Company (the "Ordinary Shares") (the "Placing Shares") with certain existing and new investors and Directors of the Company at a price of 0.14p per share (the "Placing").

The funds raised by the Placing will be used for the further field enhancement at Austin Chalk, initiation of Zink Ranch operations, a five well workover programme at the Fort Worth Field and sub-surface studies at Zink Ranch and Austin Chalk. The Placing is expected to close no later than 30 April 2019. Details of the number of Placing Shares to be subscribed for in the Placing will be announced as soon as practicable after the close of the Bookbuild.

The Attis shareholder group has indicated their intention to participate in the Placing to the extent of £165,000 cash subscription. Following the Placing, the Attis Shareholders will hold 26.7% in Mayan equity.

Special note concerning the Market Abuse Regulation:

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No 596/2014 ("MAR"). Market soundings, as defined in MAR, were taken in respect of the Subscription, with the result that certain persons became aware of inside information, as permitted by MAR. That inside information is set out in this announcement. Therefore, those persons that received inside information in a market sounding are no longer in possession of inside information relating to the Company and its securities.

**ENDS**

For further information visit www.mayanenergy.co.uk or contact the following:

Notes:

Mayan Energy Limited is an AIM listed (London Stock Exchange) North American based energy company. It is actively pursuing a primary recovery oil strategy focused on re-stimulating wells within mature producing basins with immediate cash flow leveraging commercially available technologies and projects that are shallow, low risk with low levels of capex and infrastructure already in place. It also remains interested in creating shareholder value by strategic investments in similar projects with high cash generative potential and by forming beneficial development partnerships that enable the use of pioneering and leading extraction technologies.

Technical sign off

All of the technical information, including information in relation to reserves and resources that is contained in this announcement has been reviewed by, Mr Thom Board. Mr Board is a member of the Society of Petroleum Engineers who is a suitably qualified person with over 24 years' experience operating and developing oil and gas assets. Mr Board has reviewed the release and consents to the inclusion of the technical information.