Gulfsands Petroleum Regulatory News (GPX)

Gulfsands Petroleum Plc

Proposed Open Offer to raise $22 million and Notice of General Meeting

27 August 2015

Gulfsands Petroleum Plc ("Gulfsands" or the "Company"), the AIM listed oil and gas company (AIM:GPX) with activities in Syria, Morocco, Tunisia and Colombia, today announces the publication of a Circular to Shareholders regarding a Capital Raising to raise gross proceeds of approximately US$22.0 million before costs by way of an Open Offer.

The Company is convening a General Meeting of Shareholders to be held at the offices of Shakespeare Martineau LLP, One America Square, Crosswall, London EC3N 2SG at 11.00am on Monday 14 September 2015 for the purposes of proposing the Resolutions in order to permit the Open Offer to proceed. A Circular will be posted to Shareholders on 28 August 2015 which sets out in more detail the background to and reasons for the Open Offer. All capitalised terms in this announcement are as defined in the Circular which is available free of charge on the Company's website: www.gulfsands.com.

1. Details of Open Offer

The Open Offer is to be made to all Qualifying Shareholders to provide an opportunity to subscribe for an aggregate of 354,838,709 Open Offer Shares at an Open Offer Price of 4.0 pence per Open Offer Share on the basis of:

3.01 Open Offer Shares for every 1 New Ordinary Share held as at the Record Date

Waterford and Mr. Griffiths, as existing Shareholders in the Company, have each irrevocably undertaken to subscribe for their full entitlements under the Open Offer and have undertaken to underwrite the remaining Open Offer Shares whereby they will acquire any of these shares that are not subscribed for by shareholders under the Open Offer.

The Open Offer and the Underwriting are conditional upon, among other things, the publication of an Open Offer Prospectus and upon the passing of certain resolutions by Shareholders at an Extraordinary General Meeting. The Company proposes to publish an Open Offer Prospectus, which will be lodged with the UKLA, in due course which will set out further details of the Open Offer including the proposed Open Offer timetable and details on how to apply for Open Offer Entitlements under the Open Offer. The Board has deemed it sensible that, before incurring the considerable costs involved in preparing the Open Offer Prospectus, Shareholders consent to the Proposals by voting in favour of the Resolutions which will allow the Open Offer to proceed.

If Shareholders do not approve the Resolutions, the Open Offer will not proceed and the Open Offer Prospectus will not be posted to Shareholders.

The purpose of the Open Offer is to raise proceeds sufficient to repay the full amount advanced under the Convertible Loan Facility with accumulated interest and fees and to fund the Company's ongoing working capital requirements. The Directors intend that the resources available following the Open Offer should support all of the Company's currently planned activities to 31 December 2016.

Should the Open Offer not proceed, the Company will not have sufficient working capital to continue its operations as a going concern and there is a possibility that the Directors may be required to consider placing the Company into an insolvency process. Furthermore the holders of the Convertible Loan Facility may issue a demand for repayment, and if the outstanding balance is not repaid the holders of the Convertible Loan Facility may exercise their security over some of the assets of the Group, namely the interests in Block 26, Syria, and the various interests in Morocco.

2. Waiver of Rule 9 of the Takeover Code

The Open Offer gives rise to certain considerations under the Takeover Code. Further detail on the background to these considerations is set out in the Circular.

The Panel has agreed, subject to Resolution 3 at the General Meeting being passed on a poll of the Independent Shareholders, to waive the requirement which might otherwise arise for Waterford, Mr. Griffiths or the Concert Party to make a general offer under Rule 9 of the Takeover Code in cash for the remaining ordinary shares in the Company as a result of the issue of the Open Offer Shares to the Concert Party. To be passed, Resolution 3 will require a simple majority of the votes cast on a poll by the Independent Shareholders. Accordingly, Independent Shareholders should be aware that, following completion of the Open Offer and dependent upon the take-up of other Qualifying Shareholders under the Open Offer, the Concert Party will hold more than 30 per cent. of the Company's Enlarged Share Capital and may hold more than 50 per cent. of the Company's Enlarged Share Capital. Furthermore, dependent upon the take-up of other Qualifying Shareholders, Waterford individually may hold more than 50 per cent. of the Company's Enlarged Share Capital and therefore any further increase in its shareholding may not be subject to the provisions of Rule 9 of the Takeover Code. In the event that either Waterford or Mr. Griffiths each holds more than 30 per cent. but not more than 50 per cent. of the Company's Enlarged Share Capital, any further increase in such shareholding would be subject to the provisions of Rule 9 of the Takeover Code.

3. Notice of General Meeting

The Company is convening a General Meeting of Shareholders to be held at the offices of Shakespeare Martineau LLP, One America Square, Crosswall, London EC3N 2SG at 11.00am on Monday 14 September 2015 for the purposes of proposing the Resolutions in order to permit the Open Offer to proceed. The Resolutions to be proposed at the General Meeting are as follows:

Resolution 1

Resolution 1, which will be proposed as a special resolution, is proposed to authorise the Company to reorganise its share capital by subdividing each of the existing ordinary shares (being the Existing Shares and the Treasury Shares) into one New Ordinary Share of 1.0 pence and one Deferred Share of 4.7142865 pence and to amend the Existing Articles to set out the rights of the Deferred Shares so arising and other consequential amendments.

Resolution 2

Resolution 2, which will be proposed as an ordinary resolution and is conditional upon the passing of Resolution 1, is proposed to enable the Directors to allot New Ordinary Shares in the capital of the Company in respect of the Open Offer Shares in connection with the Capital Raising.

Resolution 3

Resolution 3, which will be proposed as an ordinary resolution and is conditional upon the passing of Resolutions 1 and 2, proposes that the grant by the Panel of the Rule 9 Waiver (which is explained in paragraph 6.4 of Part I of the Circular entitled "Waiver of Rule 9 of the Takeover Code") be approved, subject to and conditional upon the completion of the Open Offer by the Whitewash Long Stop Date. Resolution 3 will be taken on a poll of the Independent Shareholders (being the Shareholders other than the Concert Party). This resolution must be approved on a poll by Independent Shareholders who together represent a simple majority of the issued shares held by Independent Shareholders being voted (whether in person or by proxy) at the General Meeting.

For further information in relation to all of the Resolutions to be proposed at the General Meeting, please see the Notice of General Meeting at the end of the Circular, which contains the Resolutions.

4. Recommendation

The Independent Directors, being the entire Board excluding Mr. Alastair Beardsall and Mr. James Ede-Golightly, having been so advised by Cantor Fitzgerald, consider the Proposals, including the Whitewash to be in the best interests of Independent Shareholders and the Company as a whole. Accordingly, the Independent Directors unanimously recommend that Independent Shareholders vote in favour of the Resolutions to be proposed at the General Meeting.

The Independent Directors who are also Shareholders and who are eligible to vote, intend to vote in favour of all of the Resolutions in respect of their own beneficial holdings of Existing Shares which amount to 140,144 Existing Shares in respect of Resolutions 1, 2 and 3.

Further, the Company has obtained letters of intent from other Independent Shareholders who in aggregate hold 14,213,660 Existing Shares representing approximately 19.5 per cent. of the voting rights held by Independent Shareholders, to vote in favour of the Resolutions.

Alastair Beardsall, Executive Chairman of Gulfsands, said:

"The Directors have given consideration as to the best way to structure a proposed Capital Raising to secure the future of the Company, and have concluded that the structure of the fundraising by way an Open Offer is the most suitable option available to the Company and its Shareholders as a whole. Shareholders should note that should the Open Offer not proceed, the Company will not have sufficient working capital to continue its operations as a going concern and there is a possibility that the Directors may be required to consider placing the Company into an insolvency process. On this basis, the Independent Directors consider the Proposals, including the Whitewash to be in the best interests of Independent Shareholders and the Company as a whole and unanimously recommend that Independent Shareholders vote in favour of the Resolutions to be proposed at the General Meeting."

For further information, please refer to the Company's website www.gulfsands.com or contact:

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

Full details of the Open Offer will be published in the Open Offer Prospectus and the Directors recommend Shareholders to review the Open Offer Prospectus for further information on the Open Offer. In the meantime if Shareholders have any queries on the Open Offer, they should contact Capita Asset Services on 0371 664 0321 or if calling from outside the UK on +44 (0) 208 639 3399. Calls are charged at the standard geographic rate and will vary by provider. Calls outside the United Kingdom will be charged at the applicable international rate. Capita Asset Services is open between 9.00 a.m. to 5.30 p.m., Monday to Friday excluding public holidays in England and Wales. Please note that Capita Asset Services cannot provide any financial, legal or tax advice and calls may be recorded and monitored for security and training purposes.

If any of the details contained in the timetable above should change, the revised times and dates will be notified by means of an announcement through a Regulatory Information Service. Certain of the events in the timetable above are conditional upon, inter alia, the approval of the Resolutions.

All times are London times and each of the times and dates are subject to change.

OPEN OFFER STATISTICS

* the closing price on AIM on 26 August 2015, being the latest practicable business day prior to the publication of the Circular