Hague and London Oil Regulatory News (HNL)

BLUEBIRD ENERGY PLC

(AIM: BBE)

Proposed distribution by way of dividend in specie of part of Bluebird's holding

in Wessex Exploration PLC

Bluebird Energy plc ("Bluebird" or "the Company") announces that it is seeking approval from shareholders to authorise the Directors to make a distribution in specie of part of its ordinary share holding in Wessex Exploration PLC.

Bluebird currently holds 64,743,934 ordinary shares in Wessex ("the Wessex Shares") representing approximately 8.98 per cent. of the issued share capital of Wessex. If shareholders so approve, it is proposed that a committee of the Board, comprising James Ede-Golightly and Brian Marshall, who are the directors who are not also on the board of Wessex ("the Independent Directors"), will be formed to determine the terms of and declare the Interim Dividend which will give effect to the Distribution.

Background to and reasons for the Distribution

In the Chairman's statement accompanying the interim results of the Company for the six months ended 31 December 2011, it stated that the Company would continue to evaluate new oil and gas exploration and development projects and in parallel review the potential for returning any excess cash or financial assets directly to shareholders.

Subsequent to the sale of the Company's sole producing asset following a change of operator in July 2011, the Directors have reviewed the remaining oil and gas assets and have concluded that its holding of a significant though minority interest in Wessex is not core to the Company's strategic development as an independent company.

In addition, the Directors are of the view that the Company's market value does not fully reflect the current market value of the Wessex Shares and that a distribution of the Wessex Shares may assist shareholders in realising further value attributable to the Wessex Shares. As at 11 May 2012, the latest practicable date before publication of this Document, the gross value of the Wessex Shares was approximately £5.47m based on the closing mid-price of Wessex on that date; on the same date Bluebird's market capitalisation was approximately £4.73m. As at 30 April 2012 Bluebird held a net cash position of approximately £1.36m.

Further and in view of the recent approach by Total SA for Wessex (which has now lapsed), the Directors consider it advisable that the decision, wherever possible, whether or not to accept any offer that might subsequently be made for Wessex should be taken by individual shareholders, not least because they are best placed to consider their own respective tax positions in deciding whether or not to accept any such offer if made.

The Distribution

The Distribution can only legally be made out of distributable reserves, and, in addition, the Committee will consider the Company's ongoing working capital requirements and the effect on those requirements of any tax liability (with reference to the market value of the Wessex Shares at the date of Distribution) that the Company may incur in making the Distribution.

Under the Company's Existing Articles, any dividend in specie is required to be approved by Shareholders at a general meeting of the Company. In addition, it is possible that, due to the value of that part of the Company's holding in Wessex which is expected to be distributed relative to the Company's overall value, it would be a requirement of the AIM Rules that the Distribution be approved by Shareholders. The Distribution is therefore conditional on (1) the passing of the Resolutions set out in the Notice as ordinary and special resolutions of the Company; and (2) the declaration and payment of the Interim Dividend to effect the Distribution following the Resolutions being passed.

It is expected that the final terms of the Distribution will be announced at 7 a.m. on the date of the General Meeting to be held on 30 May 2012 at 11 a.m. at the offices of Osborne Clarke at 2 Temple Back East, Temple Quay, Bristol BS1 6EG.

Current trading and prospects

On 15 March 2012, the Company reported its interim results for the six months to 31 December 2011.

Following the disposal of its interest in Centurion, the Company's operational focus of activity in the United States is its Solitaire asset where the Company has a 100 per cent interest. Bluebird is currently marketing Solitaire to potential farm-in partners with a view to commencing seismic work later in the year. The Company's interests in its Marcellus Shale and Revloc assets are up for sale.

Outside the US, project evaluation activity includes the Republic of Ireland where an out of round oil and gas application in respect of acreage in the Dublin Basin was lodged in May 2011 and, once opened, may include involvement in the forthcoming 14th Landward Licensing Round in the UK.

At the time of the interim report it was stated that the Board was on target to achieve a significant reduction in administration costs in the second half of the financial year although the full benefits of these changes would not be in place until the end of the financial year. Savings since the turn of the year have now been secured totalling approximately £240,000 which are either already in place or will be effective by the end of the current financial year. This relates to recurring expenses which have either been re-negotiated, restructured or terminated. It includes approximately £100,000 attributable to a 50 per cent. reduction in director's fees and salaries by board members.

In addition, non-contractual savings have resulted from the reduced level of activity within the business. For example, the company incurred just under £80,000 in travel, subsistence and hotel expenses in the six month period ended December 2011 (the bulk of this relating to activity around the disposal of the Centurion project) whereas in the first four months of 2012 the comparable expense has been under £2,000.

Expected timetable of principal events

These times and/or dates are subject to the satisfaction of the Conditions and may therefore be subject to change.

If any of the above times and/or dates change, the revised times and/or dates will be notified to Shareholders by announcement through the Regulatory News Service of the London Stock Exchange.

The Circular

A circular will today be posted to all shareholders which will include further information on the Distribution along with the notice of GM ("the Circular"). All capitalised terms in this announcement are as defined in the Circular which will be available from the Company's website, www.bluebirdenergy.net.

Request to send or supply documents and information via a website

A letter accompanies the Circular seeking Shareholders' consent to send or supply documents and information via the Company's website. Increased use of electronic communications will deliver significant savings to the Company in terms of administration, printing and postage costs, as well as speeding up the provision of information to Shareholders. The reduced use of paper will also have environmental benefits.