G3 Exploration Regulatory News (G3E)

25 September 2019

G3 EXPLORATION LTD.

("G3 Exploration", "G3E" or the "Company") 

Bond and Dividend Update

G3 Exploration Ltd. (LSE: G3E), an independent specialist in the exploration and development of coal bed methane gas (CBM), with roots in China and a focus on international expansion, announces that the Nordic Trustee, the Trustee for its 10% Senior Secured Callable Bonds, has called a Nordic Bond Holders informational conference call on Monday 30th September at 1330 BST .

The Nordic Trustee AS (as bond Trustee in the above mentioned bond issue) intends to provide Bondholders with information on the current status of the Bond and to allow Borrelli Walsh, its recently appointed receivers to the Company's subsidiary Greka Gas China Ltd, to provide an update on the restructuring options currently being considered with the Company.

The Company previously announced a Dividend in Specie to its shareholders of record on 29th March, 2019 in order to provide them with a direct interest in Green Dragon Gas ("GDG"), the 100% owned subsidiary which holds all of the Company's commercially producing assets. Following the Dividend in Specie, which requires the Nordic and Convertible Bond Holder consents or repayment prior to issuance, the Company will retain all of its exploration and development assets and continue to focus on executing its core exploration and appraisal strategy.

In accordance with the previously announced execution plan, GDG is working with its bank and advisors to place a Reserve Based Loan ("RBL") which, if successful, will enable GDG to repay the Company sufficient proceeds in respect of its existing $270m intercompany loan so as to enable repayment to the Bond holders by the Company.

Randeep S. Grewal, Executive Chairman, commented:

"We believe that the intended GDG Dividend in Specie, which was announced earlier this year, continues to be the most attractive route to unlocking the potential of G3E. Today's announcement demonstrates that we are continuing to seek a solution which will satisfy bondholders and unlock the remaining potential for G3E shareholders.

Part of the rationale for the Dividend in Specie is to enable the current balance sheet constraints to be resolved and in order to proceed we must gain approval from the Bond Holders who put up capital for the development of the now producing assets. The RBL placement will enable the repayment of the outstanding debt to our Bond Holders and therefore an opportunity to favourably satisfy our balance sheet objectives. The Dividend in Specie will then enable G3E to focus on its core specialty of exploration and appraisal whilst shareholders can choose to retain exposure to the now producing assets."

For further information on the Company and its activities, please refer to the website at www.g3-ex.com or contact:

About G3 Exploration Ltd.

G3E is a leading independent gas producer with operations in China and is listed on the main market of the London Stock Exchange (LSE: G3E). The Company has 377 Bcf of 2P reserves and 2,044 BCF of 3P reserves across eight production blocks covering over 7,566km² of license area in the Shanxi, Jiangxi, Anhui and Guizhou provinces. It holds six Production Sharing Agreements with strong, highly capitalised Chinese partners including CNOOC, CNPC and PetroChina, and has infrastructure in place to support multiple routes to monetise gas production.

The company is committed to an exploration and appraisal focused business plan in coal bed methane development across three geographies concurrently. It has a well-established track record and has demonstrated perseverance in going the distance to monetise shareholder value through three basic principles:

·; Focus on core intellectual aptitude in developing coal bed methane

·; Develop assets in an environmentally and socially prudent manner

·; Protect accreted shareholder value