FTO.L Regulatory News (FTO)

24 JULY 2014

FORTUNE OIL PLC

("Fortune Oil", "the Company" or "the Group")

Annual Financial Report Announcement 2014

Fortune Oil (LSE: FTO.L) is a company focusing on crude oil, natural gas and resource supply operations and investments primarily in China. The Company is quoted on the main market of the London Stock Exchange and has its headquarters in Hong Kong.

Following its change of year end to 31 March, Fortune Oil today reports its results for the 15 month reporting period from 1 January 2013 to 31 March 2014 (the "Reporting Period"). The results for 2014 therefore are not directly comparable with the twelve month review period in the audited 2012 annual report. For reference, there is a comparison of the twelve months ended 31 December 2013 against the twelve months ended 31 December 2012 in the twelve month interim report issued on 26 February 2014 and available on the Fortune Oil website; www.fortune-oil.com.

CORPORATE HIGHLIGHTS

§ Completed the transformational combination of Fortune Oil's natural gas business with that of China Gas Holdings Limited for a consideration of £262.5 million (US$400 million).

§ Strengthened Fortune Oil's long term strategic investment in China Gas Holdings Limited which has operations in over 200 cities across China.

§ New 20 year joint venture agreement with Sinopec in respect to the Maoming SPM, effective from 1 January 2014.

FINANCIAL HIGHLIGHTS

§ Revenues including share of jointly controlled entities and associates increased by 67 per cent to £1,232.2 million (2012: £739.4 million).

§ Group revenues from all operations excluding jointly controlled entities and associates increased to £377.8 million for the Reporting Period (2012: £214.6 million).

§ Profit from operations, excluding other gains and losses (including share of other gains in jointly controlled entities) (see page 27 of annual report for detail), decreased by 3 per cent to £27.6 million (2012: £28.5 million).

§ Profit after tax attributable to Fortune Oil's shareholders increased 1,141 per cent to £194.4 million (2012: £15.7 million).

§ Net profit from continuing operations increased 1,308 per cent to £66.6 million (2012: £4.7 million).

§ Share in Bluesky Aviation's net profit increased 49 per cent to £17.2 million (2012: £11.5 million).

§ Special dividend of 2.36p per share paid to shareholders in October 2013.

OPERATIONAL HIGHLIGHTS

§ Bluesky Aviation fuel sales volumes increased 44 per cent to 4.3 million tonnes (2012: 3.0 million tonnes).

§ Bluesky Aviation started supplying aviation fuel to three more airports bringing the total number of airports Bluesky supplies to 20.

§ Maoming Single Point Mooring sales volumes in Q1 2014 were 3.1 million tonnes.

§ The Company and the Company's joint venture China Gas Group Limited together held 916,565,463 shares in China Gas Holdings Limited ("CGH") representing 18.31 per cent of CGH total issued shares of 5,006,088,561, as per CGH's latest public information.

OUTLOOK

§ The completion of the CGH transaction has further strengthened our position in the Chinese natural gas business.

§ Bluesky Aviation has plans to supply aviation fuel to an additional 13 new airports by 2020 and a further 13 new airports by 2030 across the five provinces where Bluesky operates.

§ The Maoming Single Point Mooring joint venture has plans which will include the development of a new pipeline and buoy, increasing the capacity of the terminal.

§ Expanding opportunities to supply and trade other hydrocarbons including fuel oil and diesel.

§ Well positioned to benefit from the continuing urbanisation and industrialisation of China which will require increased oil products and natural gas supplies.

Mr Qian Benyuan, Chairman of Fortune Oil, commented:

"Fortune Oil has continued the programme to build a stronger and better performing company and strengthen the position of our oil and gas operations in China. The Company's strong position, significant industry experience and clear strategic focus has allowed us to benefit from opportunities that have arisen and we remain confident of continued success in the coming years.

"We are excited about the growth prospects for Fortune Oil. We continue to strengthen our position in the China gas industry through our long term strategic investment in China Gas Holdings Limited while still seeking opportunities in the oil sector. Given Fortune Oil's attractive position within China's expanding energy and resource markets, we remain confident of delivering further success in the future."

 ENQUIRIES:

FORTUNE OIL PLC

("Fortune Oil", "the Company" or "the Group")

Annual Financial Report Announcement 2014

In accordance with the Disclosure and Transparency Rules, we set out below the extracts from the 2014 Annual Report and Accounts in unedited full text. The Annual Report and Accounts is available on the Company's website www.fortune-oil.com and will be posted to shareholders who have elected to receive a hard copy of this document.

CHAIRMAN'S LETTER

Dear Shareholders,

Fortune Oil has continued the programme to build a stronger and better performing company and strengthen the position of our oil and gas operations in China.

This has been a busy reporting period for Fortune Oil, with two significant transactions. The Group completed the sale of Fortune Gas Investment Holdings Limited ("FGIH") to China Gas Holdings Limited ("CGH") (the "FGIH Transaction"). Fortune Oil is now one of the largest shareholders of CGH, enhancing Fortune Oil's exposure to China's natural gas business. Pursuant to the Share Purchase Agreement ("SPA") of the FGIH Transaction, Ms Li Ching has been appointed as an executive director of CGH with effect from the 10 January 2014. Ms Li's responsibilities include overseeing the Group's interests in CGH, encompassing the FGIH city gas and piped gas businesses, LNG ship and coal bed methane ("CBM") development and operations. Together with Mr Liu Ming Hui, our joint venture partner in China Gas Group Ltd. ("CGG"), who is the CGH executive chairman, managing director, and president, the Group has strengthened its involvement and influence in CGH.

With 237 city gas concessions CGH is one of the largest city gas companies in China and is well positioned to take advantage of the continued expansion of China's natural gas market. Through our long term strategic investment in CGH our shareholders will continue to have good exposure to this rapidly expanding market through a company where commensurate dividend growth is anticipated.

The second area where we have been successful was to enter into a new 20 year joint venture agreement with Sinopec in respect to the Maoming Single Point Mooring ("SPM"). This is again a measure of our strong relationships with the major state owned enterprises since we achieved this new agreement despite the original joint venture having expired. The new joint venture has been expanded with the potential development of a new pipeline and buoy system, although we no longer have a controlling stake.

As a result of the FGIH Transaction and the change of status of the SPM joint venture, the Company was no longer able to maintain a Premium Listing on the London Stock Exchange but became a standard listed company, with effect from 20 March 2013. We will continue to evaluate options such that Fortune Oil's listing status meets the best interests of the Company and its shareholders.

The Board has reviewed the KPI's following the FGIH Transaction and decided to remove the natural gas based KPI and replaced it with a new KPI; "Total Shareholder Return". This measure is used by many of our peers in the oil sector on the London Stock Exchange and we have reported this measure in the remuneration section of the annual reports in previous years. We have also revised the KPI on "Revenues" to include shared revenues of associates to reflect the performance of the Group after completion of the FGIH Transaction and the set-up of the new SPM joint venture. The KPI has been amended to "Revenue including share of jointly controlled entities and associates". We feel this set of KPI's continues to be valuable in assessing how well the Group has been performing against its strategic objectives. For the review period we met or exceeded six out of the six KPIs (see the Annual Report and Accounts).

In view of the changes to the business structure the Company is principally an investment holding company at the present time with dividend income from each business unit as the core cash inflow to the Company. The Board has reviewed its dividend policy in light of these changes, the overall Group profitability, as well as the future cash flow position of the Group, and has therefore concluded not to recommend any further dividend for this Reporting Period and that future dividend payments will be dependent on dividend income from each business unit.

I would like to end by thanking you, the shareholders for your continued support. I also want to thank all the efforts of our employees who continue to drive your company forward every working day and I'm looking forward to our next year and the continued development of the Company.

QIAN Benyuan

Chairman

24 July 2014

 CHIEF EXECUTIVE'S LETTER

Dear shareholders

During the Reporting Period, Fortune Oil continued to make steady progress against its strategic priorities. I am particularly pleased that we have completed the FGIH Transaction with CGH and the two companies are now integrated at the operating levels.

Our intention is to continue to participate in the Chinese natural gas market through a long term strategic investment in CGH, one of the largest city gas companies in China. CGH supplied 8.0 billion cubic metres ("bcm") of natural gas, in the twelve months ended 31 March 2014, an increase of 18 per cent over the previous year. That is an increase of 1.2 bcm of natural gas compared to 0.5 bcm of natural gas that FGIH sold in the twelve months ended 31 December 2012 and demonstrates the tremendous growth potential of CGH.

Key to CGH's future is the exclusive concession rights to 237 city gas pipeline projects. As gas supplies increase we see tremendous growth potential for the CGH natural gas business as more of these cities are converted to natural gas and the gas penetration rates increase from the low levels they are at today. The recent natural gas supply agreement signed between Russia and China will increase the availability of gas, particularly in the northern provinces where CGH operates.

Fortune Oil continues to expand its oil business in China. We have entered into a new 20 year joint venture agreement with Sinopec in respect of the SPM. The scope of the new joint venture has been expanded with the potential development of a new pipeline and buoy system.

Finally, our aviation fuel business continues to perform well. We continue to see increasing demand for air travel in China despite the general slowing down in China's economic growth rate. We now supply aviation fuel at 20 airports and see considerable growth opportunities from the regions served by Bluesky.

The China energy landscape continues to evolve and China's current leadership is encouraging foreign investment in some of the sectors which were previously the exclusive remit of the major state owned enterprises. Both Sinopec and PetroChina recently announced that they will seek foreign investment in their downstream fuels marketing and pipeline sectors. We believe that this new trend of opening up China's energy sector will present increased opportunities for Fortune Oil. We have a major advantage since we have been working with these companies for so many years already. We have been a good partner in China for over 20 years already and this will stand us in good stead going forward.

In October 2013 Fortune Oil put in place a US$300 million (£180 million) loan facility to aid future expansion of the Group and we continue to evaluate investment opportunities aligned to our strategy.

The Board remains optimistic about about the medium term growth prospects for the Company in both the oil and gas sectors in China even though the Chinese economy is expected to grow at a more subdued pace in future. Fortune Oil continues to strengthen its position in the Chinese natural gas industry through our investment in CGH whilst our oil businesses are well placed to take advantage of the continued expansion of China's oil demand.

The Armenia iron ore development is still under evaluation and, as with all our projects, we are continuing to assess the project's economic viability. However, the Group will not make any material investment in the development of the project unless there is an economically viable investment case. As a consequence of higher than anticipated rail freight costs and the softening in the long term iron ore price, Fortune Oil has recognised a non-cash impairment loss of £41.0 million in respect of the assets in the Armenian iron ore project.

I have been working for Fortune Oil since 1999 and it gives me tremendous pleasure to have this opportunity to manage a company with such potential, working in one of the most dynamic energy markets in the world. Fortune Oil is well placed to continue to grow in China with a strong set of assets and strategic investments, established partnerships with major companies, and a dedicated and committed working team of employees.

I'm looking forward to the 2015 financial year and continue our progress to strengthen the company. We have a Company which is fully focused and energised and set to be stronger and safer as we continue to deliver the energy to our customers. I would like to thank you all for your continued faith and belief in Fortune Oil.

TIAN Jun

Acting Chief Executive

24 July 2014FORTUNE OIL PLC

Annual Report 2014

Consolidated Income Statement for the period ended 31 March 2014

FORTUNE OIL PLC

Annual Report 2014

Consolidated Statement of Other Comprehensive Income for the period ended 31 March 2014

FORTUNE OIL PLC

Annual Report 2014

Consolidated Statement of Financial Position at 31 March 2014

FORTUNE OIL PLC

Annual Report 2014

Consolidated Statement of Financial Position at 31 March 2014 (cont.)

FORTUNE OIL PLC

Annual Report 2014

Consolidated Cash Flow Statement for the period ended 31 March 2014

FORTUNE OIL PLC

Annual Report 2014

Consolidated Statement of Changes in Equity for the period ended 31 March 2014

FORTUNE OIL PLC

Annual Report 2014

Notes to the Condensed Set of Financial Statements for the 15 months ended 31 March 2014

1. General information

The financial information set out in this announcement does not constitute the Company's statutory accounts for the 15 months ended 31 March 2014 or the year ended 31 December 2012, but is derived from those accounts. Statutory accounts for 2012 have been delivered to the Registrar of Companies and those for 2014 will be delivered before 30 September 2014. The auditors have reported on those accounts; their reports were unqualified, did not draw attention to any matter by way of emphasis without qualifying their reports and did not contain statements under s498(2) or (3) of the Companies Act 2006.

The Company has changed its financial year-end date from 31 December to 31 March. Accordingly, the Company's statutory accounts will be in respect of the 15 months to 31 March 2014. The change is to align the Company's financial year-end with China Gas Holdings Limited ("CGH") to facilitate the efficiency of preparation of the Company's consolidated financial statements and accounts.

Following the decision to dispose of the Group's shareholding in Fortune Gas Investment Holdings Limited ("FGIH") and its sub-group to CGH (the "FGIH Transaction"), it has been classified in the consolidated financial position as held for sale starting at 31 December 2012 until completion of its disposal in August 2013 and in addition the Maoming SPM business is in dissolution following the expiration of the joint venture contract in February 2013. Consequently, the results of the Group's natural gas business and the Maoming SPM business are presented as discontinued operations in the consolidated income statement and cash flow statement for the 15 months ended 31 March 2014, and the results for 31 December 2012 have also been presented on the same basis.

Basis of preparation

The financial information set out in the announcement is extracted from the Company's full financial statements for the 15 months ended 31 March 2014. Whilst the financial reporting included in this dissemination announcement has been computed in accordance with the recognition and measurement criteria of International Financial Reporting Standards (IFRSs), this announcement does not itself contain sufficient information to comply with IFRSs. The Company has published full financial statements that comply with IFRSs at the same day of this announcement. The accounting policies applied are consistent with those adopted and disclosed in the Company's financial statements for the year ended 31 December 2012.

The directors are satisfied that the Group has sufficient resources to continue in operation for the foreseeable future, a period of no less than 12 months from the date of this report. Accordingly, they continue to adopt the going concern basis in preparing the condensed financial statements. Detail of the factors that which have been taken into account in assessing the Group's going concern status are set out on page 32 of the going concern statement in the annual report.

2. Segmental reporting

The Group has adopted IFRS 8 Operating Segments to identify eight operating segments on the basis of internal reports about components of the Group which are reviewed regularly by the chief operating decision maker in order to allocate resources to the segment and to assess its performance.

The Group has classified the operating divisions and the reportable segments under IFRS 8 as "Investment in China Gas Holdings Ltd", "Natural Gas", "Single point mooring facility", "Aviation Refuelling", "Trading", "Products Terminal", "Resources" and "Others".

Information regarding these segments is presented below.

(a) Operating segments

(a) Operating segments (cont.)

(b) Geographical operations

All Group's revenues are attributed to PRC and Hong Kong and all of the Group's non-current assets are held in PRC and Hong Kong (2012: non-current assets amounting to of £34.4 million are located in Armenia). The directors are of the opinion that the PRC and Hong Kong form one geographical segment.

(c) Analysis of group revenue

(d) Major customers

None of the customers individually account for more than 10% of the Group's revenue during the current and previous year.

(e) Segment information

i) Revenues attributable to the natural gas segment are derived from the sale of gas, connection fees and the operation of gas stations in the PRC;

ii) Revenues attributable to the single point mooring facility are based on volume throughput;

iii) Revenues attributable to the aviation refueling segment are derived from the sale and storage of jet fuel in the PRC;

iv) Revenues attributable to the trading segment are derived from the trading of petroleum products in the PRC and Hong Kong; and

v) Revenues attributable to the product terminal segment are derived from the storage of petroleum products in the PRC.

3. Profit for the period/year

Profit for the period/year is arrived at after charging/(crediting) the following:

4. Other gains, net

During 2013, the Group has completed an extensive assessment of the Armenian iron ore project, which indicated that the assets may not be developed economically, and as a consequence, the Group recognised an impairment of Exploration and Evaluation ("E&E") and other assets related to the Armenia iron ore project of £36.6 million and £4.4 million respectively.

In March 2014, the Group has impaired the property, plant and equipmentand receivables from non-controlling interests of Beijing Everthriving Energy Technology Company Limited of £0.1 million and £2.2 million respectively.

5. Income tax charge

The taxation charge for the period/year is analysed below:

The tax charge for the period/year differs from the standard rate of corporation tax and is explained below.

The above reconciliation uses a 25% (2012: 25%) standard rate of tax, being the standard rate of tax payable in the PRC, where the majority of the Group's activities take place.

The Group tax charge above does not include any amounts for jointly controlled entities and associates, whose results are disclosed in the income statement net of tax.

6. Dividends