Echo Energy Regulatory News (ECHO)

6 October 2015

INDEPENDENT RESOURCES PLC

("Independent Resources", "IRG" or the "Company")

Acquisition of producing assets in Egypt

On 21 September 2015 IRG announced the intention to establish a strategic joint venture company ("JVCO") owned 50-50 with Nostra Terra Oil & Gas Company plc ("Nostra Terra") focused on the acquisition of producing assets in the North Africa region.

IRG and Nostra Terra are pleased to announce that it has reached agreement with TransGlobe Energy Corporation ("TransGlobe") for the acquisition by JVCO of a 50 per cent non-company operated interest in the East Ghazalat concession in Egypt (the "Acquired Interest") from TransGlobe (the "Acquisition") for a headline consideration of US$3.5 million. JVCO and TransGlobe signed the Acquisition Agreement on 2 October 2015. The Acquisition Agreement contains certain conditions precedent to completion. JVCO expects completion to occur later in October 2015.

Highlights

· Current gross production from East Ghazalat is approximately 880 barrels of oil per day (bopd), (based on average June 2015 production levels) (440 bopd net to JVCO)

· 2P reserves attributable to the Acquired Interest at the effective date of 30 June 2015 are estimated at 1,008,922 barrels of oil (management estimate). In addition there are two natural gas discoveries on the concession

· There is an implied acquisition cost of US$3.47 per barrel of 2P oil reserves and US$7,955 per barrel of daily oil production attributable to the Acquired Interest

· The concession also includes two gas discoveries mentioned by TransGlobe on 28 August 2013 and 3 September 2014 in North Dabaa 1X and North Dabaa 2X respectively. North Dabaa 1X tested at an average rate of 16 million cubic feet per day (MMCFD) and 1,620 barrels per day of condensate. North Dabaa 2X tested at 18.7 MMCFD and 542 barrels per day of condensate. No reserves have been attributed for these discoveries.

· The Acquisition Agreement provides that:

o JVCO is to acquire the entire issued share capital of TransGlobe GOS Inc ("TransGlobeGOS") a company incorporated in the Turks and Caicos Islands from TransGlobe Petroleum International Inc., a wholly owned subsidiary of TransGlobe which holds a 50 per cent interest in the East Ghazalat concession

o Headline consideration of US$3.5 million to be satisfied by:

§ US$1.0 million in cash at legal completion; and

§ The issue of a loan note from TransGlobe for US$2.5 million.

§ US$1.0m is due at legal completion. US$200,000 of this has been paid as a transaction deposit. The remaining cash element due will be initially funded from cash and an existing third party loan facility arranged by Nostra Terra.

o The deferred consideration, in the form of a loan note (the "Deferred Consideration Loan Note"), is to be paid within two years of legal completion. The principal of US$2.5 million repayable on the Deferred Consideration Loan Note will be adjusted to reflect:

§ the amount of net working capital at the effective date of 30 June 2015;

§ net cash flow attributable to the assets since the effective date of 30 June 2015; and

§ deductions for valid claims under warranty and indemnity provisions contained in the sale and purchase agreement.

o The Deferred Consideration Loan Note bears interest at 10 per cent annum, payable on a semi-annual basis.

o The principal is repayable on or before the second anniversary of legal completion.

o The Acquisition should complete later this month (subject to satisfaction of certain conditions precedent specified in the Acquisition Agreement).

Concession overview

The East Ghazalat Concession (the "Concession"), located in the Western Desert region of Egypt, approximately 240 kilometres southwest of the city of Cairo in a platform region over the Sharib-Sheiba high, includes two Development Permits totalling 62 square kilometres. Field facilities are located 130 km south south west of El Alamein, a city located on the Mediterranean coast 106 km west of Alexandria.

The Concession is limited to the north by the southwestern extension of the Alamein Basin. The southern part of the concession is situated in the Abu Gharadig and Margin Basins, the former of which holds significant hydrocarbon potential in the Western Desert of Egypt.

The Concession is operated by North Petroleum, a subsidiary of China ZhenHua Oil Co. Ltd, a state owned oil company of China. It consists of two development licences covering approximately 62 km2 awarded in July 2011 and February 2014 as shown in the table below.

*With a 5 year option to extend for a further 5 years.

There are currently six wells on production. Drilling activities for 2016 will be reviewed with partners in the Concession in forthcoming months.

Rationale for the Acquisition

IRG has been actively appraising a number of acquisition opportunities of producing assets in Egypt since 2013. The Acquisition will provide IRG and Nostra Terra, through JVCO, with access to a future production revenue stream and operational cashflows that can be recycled into field development or used for other purposes by the Joint Venture.

The Directors of IRG and Nostra Terra believe that the Acquisition offers IRG and Nostra Terra through JVCO the opportunity to buy production on attractive commercial terms. Management's technical evaluation suggests that there is significant potential development upside in the Concession reinforcing the strategy of acquiring stakes in producing assets with the potential to deliver good shareholder returns through field management and development.

Egypt is a well-established hydrocarbon province with a well-managed regulatory structure with the Egyptian General Petroleum Company ("EGPC") as the primary regulator and has good commercial terms on offer for concession holders.

The revenue sharing arrangements for the Concession are governed by a profit sharing agreement with EGPC. The cost oil and gas percentage is 25 per cent of revenues and 20 per cent of the remaining oil and gas revenue is allocated to the account of the contractor consortium as profit oil. Operating costs can be recovered in the period while drilling and capital expenditure costs are recovered over a five year period.

Onshore licenses in the Western Desert offer the potential for relatively cheap development drilling with short pay back periods. At 30 June 2015, there was an unrecovered historical working interest cost pool of US$27 million on the concession.

Independent Resources and Nostra Terra through JVCO look forward to working with their partners in the Concession and EGPC to drive further efficiencies while actively developing the field in an economically justified way.

In conjunction with Nostra Terra, we continue through JVCO to appraise a number of other opportunities in Egypt and Tunisia, our countries of focus.

Financial information

TransGlobe GOS is a single asset company whose sole operation relates to its interest in the Concession.

It reported revenues of circa US$11.0 million and profit before tax and impairment charge of $1.1m respectively in the 12 month period to 31 December 2014. It reported a loss after tax after an impairment charge of US$15.5 million. At 31 December 2014, TransGlobe GOS had gross assets of US$10.6 million.

Timing of completion

The Acquisition is expected to complete in October 2015. Completion is subject to the satisfaction of certain conditions precedent and completion of final due diligence.

Greg Coleman, CEO of Independent Resources, commented:

"This marks the first of what I hope to be several asset acquisitions where we can demonstrate the value we can bring to oil and gas assets by good cost management, a rigorous approach to decision making and the application of appropriate technology to optimize oil and natural gas production and reserves for the benefit of the Arab Republic of Egypt and our shareholders."

For more information, please visit www.ir-plc.com or contact:

William Gregory Coleman, Chief Executive Officer of Independent Resources, has reviewed this announcement for the purposes of the current Guidance Note for Mining, Oil and Gas Companies issued by the London Stock Exchange in June 2009. Mr Coleman is a registered Professional Engineer in the Province of Alberta, Canada. He is also a member of the Society of Petroleum Engineers.