EXI.L Regulatory News (EXI)

Exillon Energy plc

Notification of class 2 transaction

20 December 2018 - Exillon Energy plc ("Exillon Energy", the "Company" or the "Group") (EXI.LN), a London Premium listed oil producer with assets in two oil-rich regions of Russia, Timan-Pechora ("Exillon TP") and West Siberia ("Exillon WS"), is pleased to announce that its wholly owned subsidiary Lanach Limited ("Lanach") on 10 December 2018 entered into a sale and purchase agreement (the "Acquisition Agreement") with Prodyline Consultants Limited ("Prodyline"), a Cypriot company, to acquire 67 shares (representing 67% of the share capital) (the "Sale Shares") of Joint Stock Company New Pechora Energy Company (NPEC) (the "Transaction").

The purchase price for the Sale Shares is USD 32 million, payable, under the terms of the Acquisition Agreement, within five business days after the transfer of the Sale Shares to Lanach's account opened with Registration Company Center-Invest JSC. The transfer of the Sale Shares to Lanach's account took place on 18 December 2018.

Following the Transaction, the remaining 33% of the NPEC shares continue to be held by Prodyline. Going forward, the Company may decide to buy the remaining 33% NPEC shares from Prodyline.

The Transaction helps to build up the Group's resource base. The asset is located in the same region as one of Exillon's existing assets (Nem Oil LLC in Timan Pechora) and may be managed by a single operator Ucatex Oil LLC, which has extensive experience in working with fields of the same age of development.

NPEC is engaged in the industrial exploitation of the Luzskoye field - production and sale of oil. The Luzskoye field was discovered in 1965 by drilling exploratory well No. 201. It was put into commercial development in October 2002.

The Luzskoye oil field is located in the Pechora district of the Komi Republic and is 72 km south-west of the district centre of the town of Pechora, and 32 km from the nearest railway station at Kadzhery. The region has well developed infrastructure.

Geologically, the field is located in the Izhma-Pechora oil and gas region of the Timan-Pechora oil and gas province. The Sunayelskoe, Yuzhno-Lyzhskoye, Sigaveyskoye and Isakovskoye oil fields are located in close proximity to the Luzskoye deposits.

In terms of recoverable reserves, the Luzskoye field belongs to the category of medium-sized deposits.

Over the period of operation, 25 wells have been drilled at the Luzskoye field, of which four have been closed. The operating stock of producing wells is 16, including 10 wells which are active. The operating stock of injection wells is one well which is active. Also at the field there are one control and observation well, one absorbing well and two water intake wells.

Industrial infrastructure includes oil storage for 855 cu. m, an oil receiving unit with a capacity park of 2,700 cubic meters. m and a piping system.

The main hydrocarbon of the Luzskoye field is oil. Dissolved gas is a companion feedstock. Also in the oil mixture are ethane, propane, butane and sulfur.

In accordance with the international classification of SPE-PRMS7 as of 12 December 2012, the oil reserves of the Luzskoye field were:

A) developed:

- proven (1P) - 168 million barrels;

- proved, possible (2Р) - 354 million barrels;

- proved, possible, probable (3Р) - 642 million barrels;

B) undeveloped:

- proven (1P) - not available;

- proved, possible (2Р) - 42,106 million barrels;

- proved, possible, probable (3Р) - 60,626 million barrels;

C) the amount of developed and undeveloped:

- proven (1P) - 168 million barrels;

- proved, possible (2Р) - 42,460 million barrels;

- proved, possible, probable (3Р) - 61,268 million barrels.

The Transaction constitutes a class 2 transaction for the purposes of the UK Financial Authority's Listing Rules and, as such, does not require the Company's shareholder approval. The gross assets of NPEC (in accordance with Russian GAAP) at 31 December 2017 were RUB 822 million. The net losses (in accordance with Russian GAAP) for 2017 were RUB 51 million.

Media contacts:

Tom Blackwell 

Blackwell@em-comms.com

+7 919 102 9064