Hague and London Oil Regulatory News (HNL)

28 September 2015

Hague and London Oil PLC

("Company", "HALO")

Unaudited Interim Results for the Half-Year ended 30 June 2015

Hague and London Oil PLC (AIM: HNL), the hydrocarbon exploration company, is pleased to announce unaudited interim results for the half-year ended 30 June 2015.

Highlights

Strategic

· Integration and restructuring of the Company following acquisition of HALO BV by Wessex Exploration PLC now completed.

· Strategic focus shifted toward lower-risk opportunities in Southeast Asia after integration of SC54A, Philippines within the portfolio.

· New Directors subsequently focused on cost-effectively scaling up the business.

· HALO's efforts during 1H15 culminated in the Duyung transaction, announced on 23 September 2015.

Operational

· Technical and commercial evaluation of many opportunities; terms agreed and documents finalised for proposed acquisition of 85% interest in, and operatorship of, the Duyung PSC containing the Mako Gas Discovery.

· Technical studies on-going with respect to SC54A in the Philippines with minimal expenditure planned in 2016; no commitments until 2018.

· Awarded three new Blocks, offshore United Kingdom; 3D seismic data merging, processing and interpretation was started and is near completion.

· Offshore activity and third party information in Northwest Africa is being used to continue to evaluate HALO's SADR blocks; continuation of these licenses into 2016 is probable.

· French Guyana has seen little activity though drilling success, and more activity in nearby basins may raise its profile within the industry in 2016.

· Options under consideration regarding Juan de Nova following Global Petroleum's withdrawal from the application process; HALO unlikely to pursue further.

Financial

· Loss before taxation of £0.76 million (6 months ended 30 June 2014: loss £0.67 million).

· Fully funded for existing commitments in 2015 with cash of £0.95 million as at 30 June 2015.

Post-period and outlook

· First strategic transaction post-Wessex deal with the acquisition of 85% in Duyung PSC in Indonesia, combined with the 15% interest in SC54A in Philippines, creating core Southeast Asia portfolio.

· Efforts have shifted toward lower-risk opportunities with existing discoveries such as SC54A (Tindalo/Yakal discoveries) and Duyung (Mako discovery).

· Near-term focus is on completion of the Duyung transaction and development of the natural gas appraisal programme for 2016.

· Screening of other, complementary, opportunities with focus on value-accretive projects with synergies within core portfolio.

· Considering opportunities to rationalise portfolio, where possible, and focus on core elements of the HALO assets.

· Long-term incentive and retention scheme adopted by Remuneration Committee.

Andrew Cochran, Chairman and Interim CEO, commented:

"The first six months following the integration of HALO were an extremely busy period for us. We have identified, analysed and progressed on selective basis a wide number of acquisition opportunities to capitalise on the challenging market environment. Discipline has been at the core of our efforts and consequentl,y we believe, we have now executed on the best opportunity in the current environment. As a result, HALO has announced the expansion of the Southeast Asia shallow-water appraisal portfolio with the inclusion of an 85% interest in the Duyung PSC, offshore Indonesia. We believe that such a lower-risk, lower-cost approach in energy-hungry economies is the correct path to value creation today within this challenging market situation."

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Chairman's review

During the first half of the year we focused on the prompt implementation of the revised strategy. The market environment became increasingly challenging; however, we worked hard to capitalise on the opportunities this presented at the same time as keeping a tight rein on costs. This is a genuinely privileged position, enabled by our disciplined management team, and we are determined to grow the business on the virtually commitment-free platform of the current portfolio.

The integration of HALO BV and Wessex Exploration is now complete, with headquarters permanently relocated to The Hague, with lower operating costs and access to a wide pool of industry experts and advisers. The Company has been able to reduce its already low overheads for 2015 by 10% during the course of the year.

It is our belief that a market downturn is the right time to grow the business within a carefully measured approach. Whilst opportunities are abundant, it is important to stay focused and remain disciplined regarding cost and quality. To date, we have screened a dozen potential asset and corporate acquisition opportunities, but fewer than half of them progressed to the stage of commercial negotiations. This list was reduced further on the basis of our dynamic appraisal of risk versus value balance, and so metrics have changed during the course of the year. Additionally, the strategic focus has also been altered to place more emphasis on opportunities with less exposure to oil price and within a smaller geographic circle.

Duyung is an excellent example of the results of this dynamic process. The Company believes it has identified a lower-cost, lower-risk opportunity for natural gas appraisal within the previously suggested core area of energy-hungry Southeast Asia created through the combination of Wessex and HALO in late 2014 and the inclusion of the Philippines' discoveries.

The primary challenges ahead will be delivering on a successful operations plan for Duyung in 2016 while HALO transitions to become a fully-fledged operator in Southeast Asia, whilst maintaining the same cost discipline followed to date. The Company believes that through the acquisition of Duyung more, value-accretive, opportunities will become available to HALO in the coming year.

Financial review

In the period under review, the loss before taxation was £0.76 million (6 months ended 30 June 2014: loss £0.67 million) and loss per share stood at 3.15p (6 months ended 30 June 2014: loss 3.68p). Administration costs were £762,256 (6 months ended 30 June 2014: £934,337).

As at 30 June 2015, the Company had a cash balance of £0.95 million (31 December 2014: £1.80 million).

Shareholder funds as at 30 June 2015 stood at £1.79 million (31 December 2014: £2.53 million).

Project Review

Indonesia

On 23 September 2015 HALO announced that it has entered into a conditional agreement to acquire a material interest in the Duyung Production Sharing Contract (PSC).

Situated in the major oil and gas producing and exporting Natuna Sea basin, Duyung covers an area of 1,673km2 in water depths ranging from 60 metres to 100 metres. HALO believes that the PSC has significant shallow gas potential with multiple stacked reservoirs, as has been demonstrated in the Mako Discovery. According to an independent report by Panterra Geoconsultants B.V. dated 24 April 2015, Gas Initially in Place is estimated to be up to 902Bcf (150 mmboe); recovery factors for such gas accumulations may be in the range of 21-52% based on example fields elsewhere.

The Mako Discovery, which is currently undeveloped, is covered by legacy high-resolution 2D seismic plus log data from three previous wells and covers an area of 430 km2. The Mako-1 exploration well was drilled in March 1999 by LASMO and targeted large-scale channel seismic facies which were interpreted as incised valley fill. The well encountered 23 feet of net gas filled sand at the top of the seismic anomaly followed by 60 feet of mudstone above a further 12 feet of net water-wet sand at the base of the channel feature. Wireline logs confirmed gas-down-to and water-up-to values consistent with the pre-drill gas water contact modelling of 1,420-1,450 feet. HALO believes that the existing data is sufficient to enable it to identify the location of the potential appraisal well, Mako South-1X, to be drilled in 2016, the aim of which is to improve reservoir understanding and, more importantly, reservoir performance on a drill stem test in order to establish other properties, particularly permeability, saturation and ultimate recovery.

The PSC benefits from favourable economic terms, including full cost recovery, and is expected to be viable at current commodity prices. As Contractor, HALO would receive 71.4% of profit gas and net a ca. 40% "take" post-tax. The Mako Discovery is also commercially attractive due to the extensive nearby infrastructure, including the West Natuna Transport System which delivers gas to local Indonesian markets, as well as neighbouring Singapore, through the gas export pipeline. Recent gas sales in Indonesia have been in excess of US$6/mmbtu; the onshore Aceh Block A gas development has recently contracted for the sale of gas at US$9.45/mmbtu (at the Belawan pipeline tie-in point).

Philippines

The Company (through its wholly owned subsidiary HALO BV) holds a 15% interest in Service Contract SC54A in the NW Palawan Basin, offshore Philippines. A change in partners was announced in June 2015 following the disposal by Kairiki to IMC Oil and Gas Investments Ltd of its entire 30.1% interest in SC54A.  Other partners remained unchanged with Bangchak (operator, 42.4%) and TG World (BV) Corp. (12.5%).

Following the extension obtained by the operator, the partners have until August 2017 to evaluate the results of the discoveries made and decide whether or not to commit to the drilling of a single well in 2018. At present, HALO is evaluating the data in-house in order to propose a work programme to the partners for the coming year. However, given the outlook for oil price it is unlikely that a development would be proposed or sanctioned. The likely committed budget for 2016 would be minimal and require little investment by HALO. The block remains prospective and commerciality of existing discoveries could arise in the next two years with a material deflation of costs and only a relatively minor increase in oil price.

United Kingdom

HALO, as Licence Administrator (i.e. Operator) of Promote Blocks 98/7b, 98/8a and 98/12 (northern part), holds a 35% interest through its wholly owned subsidiary Wessex Hydrocarbons Limited. Its partner, NWE Mirrabooka (UK) Pty. Ltd (a wholly owned subsidiary of ASX-listed Norwest Energy NL) has a 65% interest.

In May 2015, the UK Department of Energy and Climate Change executed the formal documentation related to Licence P2265 over blocks 98/7b, 98/8a and 98/12 (northern part), following the provisional award. This allows HALO and NWE to explore the licence for an initial period of two years commencing December 2014.

These Blocks are on trend with the giant Wytch Farm field and Beacon discovery in the adjacent block to the west, in a parallel fault block down-dip of these fields. The blocks are almost entirely covered by 3D seismic data already but the existing data under previous processing technology is not sufficient to de-risk this at present. This data has been reprocessed to assess trap integrity and decide on the best plan forward. The interpretation of the re-processed seismic data is likely to be completed in 3Q15.

Western Sahara (Saharawi Arab Democratic Republic, "SADR")

Maghreb Exploration Limited (a wholly owned subsidiary of HALO) and Comet Petroleum (SADR) Limited (a wholly-owned subsidiary of Tower Resources plc) each hold a 50% interest in three licence blocks under Assurance Agreements in the SADR - Bojador, Guelta and Imlili.

The Assurance Agreements are valid for periods of up to ten years and confer the right to convert to Production Sharing Agreements upon the meeting of certain external conditions, including the recognition of SADR sovereignty and formulation of comprehensive tax laws. Agreement was reached with the SADR authorities in October 2014 to renew the Imlili block for a period of three years. As the Bojador and Guelta blocks are also due to expire in October 2016, the Company approached the authorities with a proposal to align the end dates of all three Assurance Agreements to a uniform date in December 2020.

We continue to be encouraged by the results of third party drilling activity in Northwest Africa, which confirmed the presence of the elements of a working petroleum system within the tertiary deltaic sediments. Whilst no commercial discovery was announced, the presence of gas and condensate in these clastic reservoirs over a sizeable interval is promising for the potential of hydrocarbons in the area with respect to reservoir and a thermally mature source rock. Other than annual licence fees for the Permits, HALO plans only a care and maintenance budget for the coming year requiring very little capital expenditure.

Juan de Nova

The current Juan de Nova Permit expired on 30 December 2013 and was suspended since then awaiting determination by the French Authorities of the renewal application. In July 2015, Global Petroleum, which was leading the application process, announced its withdrawal from the application process due to the lack of progress.

HALO has the right to apply to take legal title to a 50% non-operated working interest, in the event that a renewal is successful. The Company is now reviewing its rights and options regarding the situation in Juan de Nova as it considers the factors that resulted in the lack of progress in the application process. However, in the current climate and in response to the pace of the renewal process it is likely that HALO will cease to pursue the Juan de Nova permit and re-allocate capital to other core aspects of the portfolio.

French Guyana

The Company holds a 44.11% interest in Northpet Investments Limited ("Northpet"), giving it a 1.103% beneficial interest in the Guyane Maritime Permit. The remaining interest in Northpet is owned by Northern Petroleum plc. Northpet holds a 2.5% interest in this Permit in partnership with Shell (operator, 45%), Tullow (27.5%) and Total (25%).

The Company placed French Guyana under strategic review and has fully impaired the asset value at the end of 2014. Management is currently evaluating its options and in the meantime the asset continues to be viewed as non-core with respect to the new strategic direction of the business.

However, recent activity in neighbouring countries and nearby basins has potentially raised the profile of French Guyana within the industry. This is now being factored into the strategic review. Regardless, the ongoing and upcoming net commitments for HALO are a very minimal cost only.

Change of Accounting Reference Date

As announced on 30 March 2015, the Company changed its Accounting Reference Date from 30 June to 31 December to align its financial calendar with the sector. As a result, the Company has issued two consecutive interim reports (6 months to 31 December 2014 and 6 months to 30 June 2015). Full audited results for the 18-month period ending 31 December 2015 will be published on or before 31 March 2016.

Andrew Cochran

Chairman and Interim Chief Executive

Hague and London Oil PLC

Independent Review Report

Introduction

We have been engaged by the Company to review the condensed set of financial statements in the half-yearly report for the six months ended 30 June 2015 which comprises a Condensed Consolidated Income Statement, A Condensed Consolidated Balance Sheet, a Condensed Consolidated Cash Flow Statement and related notes.

We have read the other information contained in the half-yearly report and considered whether it contains any apparent misstatements or material inconsistencies with the financial information in the condensed set of financial statements.

This report is made solely to the Company in accordance with the terms of our engagement to assist the Company in meeting the requirements of the AIM Rule 18. Our review has been undertaken so that we might state to the Company those matters we are required to state to it in this report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company for our review work, for this report or for the conclusions we have reached.

Directors' responsibilities

The half-yearly report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly report in accordance with AIM Rule 18.

As disclosed in note 1 the annual financial statements of the group are prepared in accordance with IFRS as adopted by the European Union. It is the responsibility of the directors to ensure that the condensed set of financial statements included in this half-yearly report have been prepared on a basis consistent with that which will be adopted in the Group's annual financial statements.

Our responsibility

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly report based on our review.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures.

A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly report for the six months ended 30 June 2015 is not prepared, in all material respects, in accordance with the requirements of the AIM rules.

Nexia Smith & Williamson Audit Limited

Portwall Place

Portwall Lane

Bristol

BS1 6NA

Date: 28 September 2015

Unaudited Condensed Consolidated Income Statement

for the six months ended 30 June 2015

Unaudited Condensed Consolidated Balance Sheet

as at 30 June 2015

Unaudited Condensed Consolidated Cash Flow Statement

for the six months ended 30 June 2015

Notes to the Unaudited Financial Information for the six months ended 30 June 2015

1 Accounting Policies

Basis of preparation

These condensed Half Yearly financial statements are for the six-month period ended 30 June 2015.

The financial information for the six months ended 30 June 2015 and 30 June 2014 is unaudited.

The interim financial information in this report has been prepared on the basis of the accounting policies set out in the audited financial statements for the year ended 30 June 2014 which complied with International Financial Reporting Standards as adopted for use in the European Union ("IFRS").

IFRS is subject to amendment and interpretation by the International Accounting Standards Board ("IASB") and the IFRS Interpretations Committee and there is an ongoing process of review and endorsement by the European Commission.

The financial information has been prepared on the basis of IFRS that the Directors expect to be applicable for the period ended 31 December 2015.

Financial information contained in this document does not comprise the Group's statutory financial statements as defined in section 434 of the Companies Act 2006.

The statutory financial statements for the year ended 30 June 2014 have been delivered to the Registrar of Companies. The auditors reported on these financial statements: their report was unqualified, did not contain a statement under section 498(2) or 498(3) of the Companies Act 2006, and did not include references to any matters to which the auditor drew attention by way of emphasis.

2 Loss per Share Attributable to the Equity Shareholders of the Company

Basic loss per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period.The calculation of diluted earnings per share assumes conversion of all potentially dilutive ordinary shares, all of which arise from share options. A calculation is done to determine the number of shares that could have been acquired at fair value, based upon the monetary value of the subscription rights attached to outstanding share options. Share options are anti-dilutive and are therefore not included below.

The number of shares for the period ended 30 June 2015 takes into account the 40:1 share consolidation carried out in December 2014. The numbers of shares for comparative periods have been restated accordingly.

3 Taxation

There was no tax charge for the half yearly period due to the loss incurred (6 months ended 30 June 2014: £ nil). A deferred tax asset in respect of trading losses and share-based payments has not been recognised due to the uncertainty over timing of future profits. The trading tax losses are recoverable against suitable future trading profits.

4 Acquisition of Hague and London Oil B.V. - restatement of 31 December 2014

The accounting for the acquisition of Hague and London Oil B.V. was completed during the six months to June 2015. Provisional amounts recognized at 31 December 2014 were retrospectively adjusted as new information was obtained about facts and circumstances as at the acquisition date and the 31 December 2014 balance sheet has been restated accordingly.

5 Acquisition of interest in Duyung PSC

On 23 September 2015 the Company announced it had entered into a conditional agreement to acquire an 85% interest in the Duyung Production Sharing Contract ("PSC"), Natuna Sea, Indonesia.

The proposed transaction will see HALO acquire 85% and the operatorship of Duyung from West Natuna Exploration Ltd ("WNEL"), a private Singapore-based entity, who will retain a 15% stake.

As part of the transaction, HALO has agreed to provide the partnership with US$0.5 million of working capital and to acquire long-lead items and/or contract services for the drilling of an appraisal well on the licence, Mako South-1X. If the Company proceeds with the transaction, then HALO would carry WNEL for its net 15% working interest share of costs, capped at US$10 million (gross) inclusive of the upfront US$0.5 million working capital payment (i.e. a capped carry of US$1.5 million net to WNEL). Any net costs incurred by WNEL beyond the US$1.5 million will be paid in accordance with the Joint Operating Agreement on a net working interest basis.

The minimum remaining work programme is expected to include the Mako South-1X appraisal well, and the partners may commit to more work as part of a wider appraisal and development programme of the Mako Natural Gas discovery ("the Mako Discovery") contained within the Duyung PSC.

The terms of the transaction grant HALO preferential recovery of all audited and approved costs expended on the Mako Discovery from WNEL's and HALO's share of hydrocarbons produced, including the historic cost pool (ca. US$12 million gross). Following cost recovery from the Mako Discovery, all costs incurred and hydrocarbons produced from the licence will be shared in accordance with the Joint Operating Agreement on a net working interest basis.

6  Long Term Incentive and Retention Scheme

On 23 July 2015, following the recommendation of the Remuneration Committee, the Board adopted a long term incentive and retention scheme ("LTIS") intended as a means of providing incentives based on Company share performance to personnel and retaining them over at least a five year period. Participants would only benefit if shareholders do by reason of accretion of share price over periods of 2.5 years (30 months) and 5 years (60 months).

An award to a participant would vest in two tranches, 50% at each of 30 month and 60 months from the date of issue of a bonus certificate. Save in the case of a takeover and subject to the Board's discretion, the bonus would become payable 30 days after vesting. The aggregate number of shares that can be the subject of bonus payment calculations is limited to the number of HALO shares in issue at the date of adoption of the LTIS. Bonus payments are calculated for each of the two tranches vesting, being the product of 50% the number of shares specified in the relevant bonus certificate and the increase in the market value of such shares since the scheme was adopted.

The issue of bonus certificates pursuant to the scheme is at the discretion of the Board and would be made on the recommendation of the Remuneration Committee. Payments following vesting are in any event subject to discretion of the Board as to whether any payment is to be made and, if so, how much and when. At present no awards have been made pursuant to the scheme.

7 Copies of the Half Yearly Report

A copy of this Half Yearly Report is available on the Company's website at: www.haloil.co.uk

Glossary of terms

Bcf billion cubic feet

mcf thousands of standard cubic feet

mmboe million barrels of oil equivalent

mmbtu million British thermal units