Cabot Energy Regulatory News (CAB)

Prior to publication, the information contained within this announcement was deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. With the publication of this announcement, this information is now considered to be in the public domain.

2 September 2019

Cabot Energy Plc

("Cabot", the "Group" or the "Company")

Term Sheet for Canada Loan Facility of up to C$5.0 million

Subscription to raise US$0.3 million from H2P

Company to commence Open Offer in October 2019 with H2P committed participation of a minimum additional US$0.7 million

Cabot Energy Plc (AIM: CAB), the AIM quoted oil and gas company focussed on creating predictable production growth in Canada, is pleased to provide an update on its financial position.

Highlights

·; Cabot Energy Inc. has entered into a non-binding term sheet for an asset-level loan facility of up to C$5.0 million with a private energy lender to fund a winter work programme (the "Winter Work Programme")

·; Subscription Agreement signed with High Power Petroleum LLC ("H2P") to subscribe for US$0.3 million to fund the commencement of a late summer work programme (the "Summer Work Programme")

·; Open Offer to be launched in October 2019; H2P have committed to participate in the Open Offer for a minimum amount of US$0.7 million

Cabot's wholly-owned Canadian subsidiary, Cabot Energy Inc. ("Cabot Inc"), has entered into a non-binding term sheet for an asset-level loan facility of up to C$5.0 million (the "Loan Facility") with a Calgary-based private energy lender (the "Lender") which provides financial support to junior oil and gas producers. Once executed, the Loan Facility will enable Cabot to commence a Winter Work Programme, which is expected to commence in Q4 2019.

The Company has also secured a total equity commitment of a minimum of US$1.0 million from H2P to fund a Summer Work Programme in September and October 2019. This will be raised via a subscription of US$0.3 million, as set out in more detail below, followed by a committed participation of a minimum US$0.7 million in an Open Offer, which is to be launched in October 2019.

C$5.0 Million Asset-Based Term Loan Facility

The terms of the proposed Loan Facility to Cabot Energy Inc. include provisions for the funds to be made available in tranches. It is anticipated that the first advance of C$2.5 million will be drawn down on or about 30 November 2019 and a second advance of C$2.5 million is likely to be drawn down in early 2020. Both advances are subject to the satisfaction of customary conditions precedent, including the completion of the Lender's due diligence, Lender security, a demonstrably successful Summer Work Programme and certain minimum production levels immediately prior to the drawdown dates.

The loan is non-recourse to Cabot Energy plc and the loan advances will mature on 30 September 2021. The proposed costs associated with the Loan Facility are: interest chargeable at 11.5% per annum, payable monthly in arrears; commitment fees totalling C$75,000; and a 2% participatory interest in gross revenue growth achieved in excess of pre-agreed base revenue over the term of the loan.

The Winter Work Programme

Once completed, the Loan Facility will be utilised to fund the Winter Work Programme consisting primarily of four new horizontal development wells to produce existing proven reserves.

US$0.3 Million Subscription by H2P and The Summer Work Programme

Cabot has entered into an agreement with H2P to raise US$300,000 gross, before expenses, by way of a subscription for 8,130,066 ordinary shares of 1 pence each ("Ordinary Shares") at 3 pence per ordinary share (the "Issue Price") (the "Subscription Shares") (the "Subscription").

The Issue Price is equal to a 14.3 per cent discount to the closing price of 3.5p on 30 August 2019, being the last trading day prior to this announcement. Following the completion of the Subscription, H2P will be interested in 33,103,569 Ordinary Shares, representing approximately 72.2 per cent of the Company's enlarged issued share capital.

The net proceeds of the Subscription will be used to provide sufficient working capital to commit to the commencement of the Summer Work Programme which will consist of nine workovers, a critical maintenance programme and simulations in proven reserve wells in September and October at a total budgeted cost of US$1 million. Following the Subscription, the Company will have sufficient funds until October 2019.

Open Offer and H2P Commitment

In October 2019, the Company intends to launch an Open Offer to all shareholders on the proposed open offer price of 3p. This is intended to provide the balance of working capital funding needed to complete the Summer Work Programme. As part of the Open Offer, H2P has committed to the Company that it will invest a minimum of US$0.7 million, bringing up its total equity commitment in the current round of fundraising to at least US$1.0 million.

Related Party Transaction

H2P is a substantial shareholder in the Company and therefore the Subscription constitutes a related party transaction in accordance with AIM Rule 13. James Dewar, Rachel Maguire and Paul Lafferty, who are independent Directors for these purposes, having consulted with the Company's Nominated Adviser, consider the terms of the Subscription by H2P, as a related party, to be fair and reasonable insofar as all of Cabot's shareholders are concerned.

James Dewar, Interim Non-Executive Chairman, commented: "We are pleased to have entered into a term sheet to debt-fund the Winter Work Programme and secure equity funding from our supportive majority shareholder, H2P, to fund the Summer Work Programme. On behalf of the Board, I would like to thank H2P for their continued support at this crucial time. We are always mindful of our other shareholders and look forward to providing them with the opportunity to participate in an equity fundraising, via an Open Offer on the same terms, in October. I would like to thank the management team who have worked hard to access non-equity finance in order to minimise further shareholder dilution, which is an endorsement of the quality of both the Company's management team and the assets' potential. In late 2019, we intend to further strengthen our capital structure for the remainder of 2019 and the entirety of 2020 once the Summer Work Programme has been successfully executed."

Scott Aitken, Chief Executive Officer of Cabot, said: "Signing a term sheet for a significant amount of credit with a specialist lender in Calgary is an important building block in our plans to execute our growth strategy. With the H2P funding we can commence a Summer Work Programme of nine well workovers and stimulations which will, subject to the satisfaction of the Loan Facility conditions precedent, enable access to the debt facility, then undertake a Winter Work Programme of drilling four new horizontal development wells totalling a minimum US$7.0 million investment. Following this investment, management believe the Winter Work Programme will have a positive impact on operations and overall production levels."

Admission of the Subscription Shares and Total Voting Rights

Application will be made to the London Stock Exchange for the 8,130,066 Subscription Shares to be admitted to trading on AIM ("Admission"). These shares will rank pari passu with existing Ordinary Shares in all respects. It is expected that Admission will occur and that dealings in the Subscription Shares will commence at 8.00 a.m. on 6 September 2019.

Following the issue of the Subscription Shares, the Company will have 45,845,122 Ordinary Shares in issue and no shares are held in treasury. Accordingly, this figure will be the total number of voting rights in the Company and may be used by shareholders as the denominator for the calculations by which they determine whether they are required to notify their interest in, or change to their interest in, the Company under the FCA's Disclosure Guidance and Transparency Rules.

-Ends-

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Note to Editors:

Cabot Energy Plc (AIM: CAB) is an oil and gas company focussed on creating predictable production growth in Canada. Comprehensive information on Cabot and its oil and gas operations, including press releases, annual reports and interim reports are available from Cabot's website: www.cabot-energy.com