Gulfsands Petroleum Regulatory News (GPX)

GULFSANDS PETROLEUM PLC

Certain statements included herein constitute "forward-looking statements" within the meaning of applicable securities legislation. These forward-looking statements are based on certain assumptions made by Gulfsands and as such are not a guarantee of future performance. Actual results could differ materially from those expressed or implied in such forward-looking statements due to factors such as general economic and market conditions, increased costs of production or a decline in oil and gas prices. Gulfsands is under no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable laws.

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). Upon the publication of this announcement via Regulatory Information Service ("RIS"), this inside information is now considered to be in the public domain. If you have any queries on this, then please contact Andrew Morris, the Finance Director of the Company (responsible for arranging release of this announcement) at 4th Floor, 1 Royal Exchange Avenue, London EC3V 3LT or on +44 (0) 207 464 4490.

16 February 2017

Secured Term Financing Facility of up to £4 million

Gulfsands Petroleum plc ("Gulfsands", the "Group" or the "Company" - AIM: GPX), the oil and gas company with activities in Syria, Tunisia, Colombia and Morocco, is pleased to announce that it has today finalised a Secured Term Facility of up to £4 million (the "Facility") with its Major Shareholders (the "Lenders").

The Lenders are Waterford Finance & Investment Limited, Blake Holdings Limited (a company controlled by Mr. Richard Griffiths) and ME Investments Limited. Their participation levels within the Facility are as follows:

The Facility is available for drawdown by the Company in five equal tranches of £800,000, the first available immediately upon the satisfaction of various administrative conditions precedent, and the further tranches being available on or after 31 March 2017, 30 June 2017, 30 September 2017 and 31 December 2017. The first two tranches, being the immediate tranche and the one on 31 March 2017, are committed by the Lenders, while the final three tranches, although the terms are agreed, are subject to re-approval by each of the Lenders prior to each drawdown request.

Interest on loans made (together with accrued fees and interest) shall run at 7% per annum. A commitment fee of 1% per annum shall run on any undrawn proportion of the Facility. All fees and interest accrue quarterly until maturity.

All, or part, of the undrawn portion of the Facility may be cancelled at any time by the Company. The Company may prepay the whole or any part (if at least £800,000) of the outstanding amounts at any time subject to paying a 10% premium on the amount pre-paid.

The proceeds will be used for general and administrative expenses of the Group and for working capital purposes and, based on current forecasts, if fully drawn down, are anticipated to fund the Company through to the first half of 2018. It is the intention of the Board to seek equity financing for the Group in due course. If an equity raise takes place the Lenders will be entitled to be pre-paid on the terms noted above, provided the Lenders agree that the full amount to be pre-paid is subscribed for equity in such equity raise.

The maturity date of the Facility is 3 years from the first drawdown date, at which date all outstanding amounts will be repayable in cash unless the Company has exercised an equity conversion right. Pursuant to that right, the outstanding amounts to be repaid may be converted at the Company's option into shares of the Company at a price equal to the lower of (i) the 90 day average closing price at the time of repayment and (ii) the lowest price at which the Company has raised equity capital during the life of the Facility.

The Facility is secured: by a mortgage over the shares of the Company's direct subsidiary, Gulfsands Petroleum Limited; by a charge over certain intercompany receivables of the Company; by a charge over certain bank accounts of the Company (should the Lenders require such a charge to be created); and through the issue of one ordinary share in the share capital of Gulfsands Petroleum Limited to the security trustee. The security trustee for the Facility is Weighbridge Trust. The articles of association of Gulfsands Petroleum Limited have also been amended to include certain reserved matters requiring unanimous shareholder consent, pre-emption provisions and compulsory transfer provisions. In addition to the right to enforce the security, on an insolvency-related event of default, the Lenders have the right to convert outstanding amounts under the Facility into a direct equity holding in Gulfsands Petroleum Limited, at a fair price (from a financial point of view taking into account all relevant circumstances) to be determined by an expert at the time.

Entering into this Facility Agreement by the Lenders is considered a related party transaction pursuant to the AIM Rules. The independent Directors of Gulfsands for the purposes of this transaction (being John Bell, Andrew Morris, Richard Milne and Joe Darby) consider, having consulted with the Company's Nominated Adviser, that the terms of the Facility are fair and reasonable insofar as the shareholders of Gulfsands are concerned.

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