ECHO.L Regulatory News (ECHO)

FOR IMMEDIATE RELEASE

10 May 2016

Independent Resources plc

("IRG" or the "Company")

Creditor and cost reduction arrangements

Financial update

Update on East Ghazalat

IRG announces a reduction of c.£500,000 in indebtedness and puts in place plans to substantially reduce holding company cash outgoings to c.£700,000 over next 12 months

Key points:

· A £297,989 reduction in trade creditors through the issue to certain such creditors of 245,788,895 new ordinary shares of 0.01p each in the Company ("Shares") at prices of 0.1p and 0.25p per Share

· A further c.£202,000 debt reduction, through the Company's directors ("Directors") accepting, in principle, payment in Shares for past services, at a price yet to be agreed, but which is intended to be at a significant premium to the Company's pre-announcement share price of 0.085 pence per Share; and

· A planned reduction in the Company's annual cash costs to c.£700,000 for the twelve months commencing 1 May 2016 with a plan to reduce ongoing costs to £50,000 per month thereafter.

The issue prices of 0.1p and 0.25p per Share represents premia of 17.6 per cent. and 194.1 per cent. respectively to the Company's closing mid-price of 0.085 pence on 9 May 2016, being the latest practicable business day prior to this announcement.

The Board of Independent Resources PLC ("the Company" or "IRG") has entered into arrangements which will reduce the Company's existing trade creditors to approximately £500,000. The Company is progressing debt reduction discussions with other trade creditors and will update the market as and when further progress is made.

Reduction in creditors

On 8 April 2016, when the Board announced the proposals to be made to shareholders at the recent general meeting, it explained that in order to cut cash expenditure as far as possible, it intended where possible to settle obligations of some existing creditors in equity or equity related instruments, thereby significantly reducing the cash burn of the Group.

The arrangements agreed with creditors comprise:

· the issue of 34,000,000 Shares ("Creditors' Shares") to a trade creditor of the Company at a price of 0.25p per Share in payment of £87,000 of indebtedness;

· the issue of 210,988,895 Shares ("Creditors' Shares") to certain trade creditors of the Company at a price of 0.1p per Share in payment of £210,989 of indebtedness; and

· as previously announced, the Directors accepting, in principle, payments totalling c.£202,000 in Shares ("Directors' Shares") for past services, at a price yet to be agreed, but which is intended to be at a significant premium to the pre-announcement share price of 0.085 pence per Share. The Company also intends to introduce a new employee share scheme ("New Share Scheme") which will issue the Directors' Shares as restricted shares, the restrictions on the Shares imposed as a condition of their award will include continuing employment with the Company for a specified period of time.

The total number of Creditors' Shares which are to be issued pursuant to the arrangements set out above total 245,788,895, representing approximately 36.9 per cent of the enlarged issued share capital of the Company following their Admission.

Following the issue of Creditors' Shares referred to above, there will be 665,694,771 ordinary shares of 0.01p each in the Company in issue. The figure of 665,694,771 Shares may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest, or a change to their interest, in the Company under the Disclosure and Transparency Rules.

The Creditors' Shares and the Directors' Shares will rank pari passu with the Company's existing ordinary shares of 0.01p each. Application will be made for the Creditors' Shares to be admitted to trading on AIM ("Admission").

It is expected that Admission will become effective and dealings in the Creditors' Shares will commence at 8.00 a.m. on 16 May 2016.

Reduction in future cash costs and financial update

The Company has identified substantial cost saving measures which it intends to implement over the next six months and which, once effected, will result in the Company incurring cash costs of approximately £700,000 over the next 12 months, compared to its current level of approximately £1,200,000 per annum.

These costs savings are attributable, amongst other things, to a combination of streamlining the Company's advisory relationships, reducing employee costs, lower office costs, and the effect of various employees and third party contractors agreeing, in principle, to be paid in Shares over the next 12 months, as described below. The Directors are setting a target of ongoing average monthly cash expenditure for the Company of no more than £50,000 per calendar month from November 2016 onwards, until the Company, by growing its business, achieves the financial strength necessary to enable it to incur higher levels of cash costs.

As previously announced, as part of reducing the Company's future cash costs, the Directors and a third party consultant have agreed, in principle, to accept payments in Shares for their services for the 12 months commencing 1 April 2016, which are estimated to total c.£408,000, the number to be awarded being calculated by reference to prices yet to be agreed, but which is anticipated to represent a significant premium to the pre-announcement share price of 0.085 pence per Share. The Directors will be issued restricted shares under the New Share Scheme referred to above to give effect to these arrangements.

The restricted Share awards to Directors will be made in due course and pursuant to applicable rules and regulations, including when the Company is no longer in a close period as defined by the AIM Rules for Companies.

As at 30 April 2016, the Company had cash reserves of approximately £0.04 million (unaudited). The Company actively continues to pursue discussions with a number of sources over the availability of debt and/or equity funding to address its cash position in the very near term, in order to provide additional working capital and to remain trading as a going concern.

Update on East Ghazalat

Independent Resources Egypt Ltd ("IRE") is the Company's joint venture vehicle with Nostra Terra Oil and Gas Company plc ("NTOG"), which owns a 50% interest in the East Ghazalat concession.

IRE continues to make progress on the registration process with the Egyptian Government. This will allow it to receive its share of the East Ghazalat revenues from 1 July 2015.

As announced on 25 January 2016, IRE remains in dispute with North Petroleum International SA the operator of East Ghazalat. IRE remains entitled to its share of revenues notwithstanding the dispute and expects the formalities with the Egyptian authorities to allow it to receive those revenues to be completed within approximately two months. IRE will receive directly from Egyptian General Petroleum Corporation its shares of revenue from East Ghazalat. IRG will make a further announcement on completion of those formalities.

As part of the terms of the acquisition of East Ghazalat as announced on 15 October 2015, IRE issued a US$2.5m loan note to TransGlobe Petroleum International Inc. ("TransGlobe") the vendor of East Ghazalat, repayable by 30 September 2017 (the "Loan Note"). IRG is jointly and severally liable with NTOG for the Loan Note.

The amount to be repaid to TransGlobe pursuant to the terms of the Loan Note is subject to adjustment to reflect East Ghazalat's working capital position on 30 June 2015, together with the net cash flow attributable to the assets from 30 June 2015 until the 14 October 2015, the date of completion of the acquisition ('the adjustment"). The scale of the adjustment has not yet been agreed.

CEO comment

Commenting on these initiatives to reduce the Company's debt and future cash costs, and improve its liquidity and working capital, Greg Coleman, CEO of Independent Resources said:

"I am pleased to have received the support of a number of our creditors who have shown confidence in the Company by agreeing to accept shares as payment of the debt owed to them by the Company, at prices which represent a substantial premium to our prevailing market price. This debt reduction, together with the substantial reduction in cash costs which we intend to achieve puts the Company on a sounder financial footing. The Company remains committed to generating positive cash flow from its existing asset base and continues to seek sources of finance to support its current operations and to acquire assets which meet demanding risk adjusted returns."

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