IGAS.L Regulatory News (IGAS)

11 February 2011

IGas Energy plc ("IGas" or the "Company")

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA, SOUTH AFRICA OR JAPAN

IGas announces a placing of up to 27.5 million new ordinary shares

IGas announces today a placing of up to 27.5 million new ordinary shares (the "Placing Shares"), representing approximately 29.5 per cent. of the Company's existing issued share capital (the "Placing"), prior to the Acquisition referred to below.

The Placing is being conducted, subject to satisfaction of certain conditions, through an accelerated book-building process to be carried out by RBS Hoare Govett Limited ("RBS Hoare Govett"), which is acting as sole bookrunner (the "Bookrunner").

The timing of the closing of the book, pricing and allocations are at the discretion of the Bookrunner. The number of Placing Shares and the price at which the Placing Shares are to be placed (the "Placing Price") are subject to agreement between IGas and the Bookrunner at the close of the book-building process. Details of the number of Placing Shares and the Placing Price will be announced as soon as practicable after the close of the book-building process.

The Placing Shares will, when issued, be credited as fully paid and will rank pari passu in all respects with the existing ordinary shares of 50 pence each in the capital of the Company, including the right to receive all dividends and other distributions declared, made or paid on or in respect of such shares after the date of issue of the Placing Shares. The Placing will be made on a non-pre-emptive basis.

The Company will apply for admission of the Placing Shares to trading on the AIM market operated by the London Stock Exchange ("Admission"). It is expected that Admission will take place and that trading will commence on 7 March 2011.

The Placing is conditional upon, among other things, passing of a resolution at a General Meeting of the Company, convened for 4 March 2011,admission becoming effective and the proposed acquisition of Nexen Exploration UK Limited ("Nexen Exploration UK") becoming unconditional in all respects (see below for further information). The Placing is also conditional on the Placing Agreement between the Company and the Bookrunner becoming unconditional and not being terminated and shareholder approval of the Placing and the proposed acquisition of Nexen Exploration UK . It is anticipated that the settlement date will be 7 March 2011, subject to a non-statutory clearance in respect of the change of control of Nexen Exploration UK having been received from DECC prior to that date.

The Appendix to this announcement (which forms part of this announcement) sets out the terms and conditions of the Placing.

Background to and Reasons for the Placing

Proposed Acquisition of Nexen Exploration UK

On 31 January 2011, IGas announced that it had reached agreement on the terms of a proposal whereby IGas will acquire the entire issued share capital of Nexen Exploration UK. Nexen Exploration UK is the joint owner with Island Gas Limited (a wholly owned subsidiary of IGas) of 11 UK Petroleum Exploration and Development Licences ("PEDL") and three blocks within a seaward petroleum production licence. As a result of the acquisition, these licence interests will become wholly owned and operated by IGas, increasing IGas' contingent recoverable resource 2C (P50) by 115 per cent. to 1,736 bcf or 260 million barrels of oil equivalent and its current net production rate will almost triple. The Board considers that the acquisition marks a major turning point in the history of IGas. As a result of the Acquisition IGas will more than double its contingent resources, with a consequent effect on future production giving enough recoverable gas to supply electricity to fifteen per cent of UK homes for 15 years. Additionally, IGas will become operator of all its licence acreage increasing its ability to accelerate the delivery of its production plans. This should bring significant value not only to IGas shareholders but also to Nexen with its onshore UK gas interests now held in a company dedicated to delivering secure gas onshore.

Summary terms of the Acquisition

As part of the Acquisition, Nexen will receive 39,714,290 IGas shares equivalent to 29.9% of the enlarged issued share capital, prior to the Placing. These shares will be subject to a lock up agreement for nine months. The Agreement will also give IGas on-going access to Nexen's key personnel and thereby to unconventional gas technology. Nexen will have the right to be represented on the board of IGas by one director as long as their shareholding remains above 15%.

The closing of the transaction is subject to DECC approval of a change of control of Nexen Exploration UK, and the approval of the shareholders of IGas. The Acquisition is not conditional on the Placing and in the event of the Placing not proceeding the Acquisition would nevertheless complete. The Board is confident that in such circumstances in which the Placing didn't proceed, the business of the Company would be able to continue in the ordinary course, although certain plans and strategies, which are dependent, in part, upon the proceeds of the placing, may have to be delayed or deferred.

Current Cash Position

At the year ended 31 December 2010, IGas had cash balances of c. £12m and no debt. The existing funds will be used for the ongoing preparation of the first commercial production site and the preparation of further field development plans. Existing funds will also be used to progress land access at Point of Ayr where the offshore license has recently been extended by DECC as well as for ongoing G&A expenses.

Additional Funding Sought

The Board believes that, in order to position IGas to undertake this acceleration of the drilling programme across its acreage from 2011 onwards, it requires additional funding. The Board has concluded that it is in the interests of shareholders to seek to raise the required finance by means of the Placing.

Further details of the intended use of the proceeds of the placing are set out below under "Use of Proceeds".

Use of Proceeds

As stated above under "Background to and Reasons for the Placing", the Group's existing cash balances and the anticipated proceeds of the Placing are expected to be used for:

1. Preparation of a first commercial production site

IGas intends to drill at least two additional production wells, it is anticipated that these will be at Doe Green. IGas is looking to commence activity on at least one further production site by early 2012 and with the proceeds of the Placing will commence additional site construction, to ensure sufficient flexibility to fully utilise rig equipment. There will be ongoing investment in the production facilities to coincide with the production drilling sequence. The Company also plans to drill a pilot well at the Point of Ayr site assuming land and planning consents are obtained.

2. Conversion of existing resources into reserves

The combination of established commercial production and continued drilling activity, coupled with approved Field Development Plans should allow the process of resource to reserve transfers to begin. There is also the possibility of engaging an additional rig in 2012 for which early discussions are underway.

The intention is to drill up to 3 boreholes, thus fulfilling the Company's outstanding licence commitments on 3 licences (PEDL 190, 184 and 193), with each well potentially being retained as a future production well on the site. Overall, civil construction for up to 5 sites will be carried out and the Company will continue progressing, inter alia, land & planning applications and production facilities design.

Any funds raised pursuant to the placing and not applied in the manner outlined above will be used for further evaluation activities on the Group's assets and for working capital purposes.

Following the Placing the Company will continue to review all available future funding options.

A circular will be posted to IGas shareholders on 14 February 2011.

Andrew Austin, Chief Executive of IGas Energy plc, commented:

"Following the Nexen transaction, IGas is now in a position to accelerate its forward drilling plans. With the completion of the Nexen transaction and with the proceeds of the proposed placing, 2011 is set to be a transformational year for IGas as the Company heads for commercial production and drilling at a number of new sites. In closing this acquisition and the placing we will have both the resources and the control to deliver production and reserves from our assets."

ENQUIRIES

For further information please contact:

NOTES TO THE EDITOR

IGas was set up to produce and market domestic sourced gas, primarily from unconventional reservoirs, particularly coal bed methane. IGas is now producing gas from its pilot production site at Doe Green in Warrington and selling electricity through its on-site generation, a UK first from CBM. Initial production rates indicate that the Company should exceed its threshold for commerciality.

Following the completion of the Nexen Exploration UK transaction, IGas will have 100 per cent ownership interests in eleven PEDLs in the UK, wholly own two methane drainage licences and have a 100 per cent interest in three offshore blocks under one seaward petroleum production licence. These licenses cover a gross area of approximately 1,756 km2. The post Acquisition mid case GIIP is 9,107Bcf (source: Equipoise Solutions Ltd), excluding any shale potential.

The coal seam both generates and traps the gas, which can be extracted by drilling into the seam and collected for use as fuel. CBM is exactly the same as other forms of natural gas, and is used to provide both industrial and domestic power and has the potential to be an important new source of energy for the UK.

IMPORTANT NOTICES

This announcement contains (or may contain) certain forward-looking statements with respect to certain of IGas' plans and its current goals and expectations relating to its future financial condition and performance and which involve a number of risks and uncertainties. IGas cautions readers that no forward-looking statement is a guarantee of future performance and that actual results could differ materially from those contained in the forward-looking statements. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements sometimes use words such as "aim", "anticipate", "target", "expect", "estimate", "intend", "plan", "goal", "believe", or other words of similar meaning. Examples of forward-looking statements include, amongst others, statements regarding or which make assumptions in respect of the future performance of the Company, the on-going exploration and appraisal of the Group's portfolio of assets, the timing of the commencement of any development of and future production (if any) from those assets, the ability of the IGas group to discover new reserves, the prices achievable by the IGas group in respect of any future production, the costs of exploration, development or production, future foreign exchange rates, interest rates and currency controls, the Group's future financial position, plans and objectives for future operations and any other statements that are not historical fact. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances, including, but not limited to, economic and business conditions, the effects of continued volatility in credit markets, market-related risks such as changes in the price of oil or changes in interest rates and foreign exchange rates, the policies and actions of governmental and regulatory authorities, changes in legislation, the further development of standards and interpretations under International Financial Reporting Standards ("IFRS") applicable to past, current and future periods, evolving practices with regard to the interpretation and application of standards under IFRS, the outcome of pending and future litigation or regulatory investigations, the success of future explorations, acquisitions and other strategic transactions and the impact of competition. A number of these factors are beyond IGas' control. As a result, IGas' actual future results may differ materially from the plans, goals, and expectations set forth in IGas' forward-looking statements. Any forward-looking statements made in this announcement by or on behalf of IGas speak only as of the date they are made. Except as required by the Financial Services Authority (the "FSA"), the London Stock Exchange, the AIM Rules or applicable law, IGas expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained in this announcement to reflect any changes in IGas' expectations with regard thereto or any changes in events, conditions or circumstances on which any such statement is based.

This announcement is for information purposes only and shall not constitute an offer to buy, sell, issue, or subscribe for, or the solicitation of an offer to buy, sell, issue, or subscribe for any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.

This announcement has been issued by IGas and is the sole responsibility of IGas. No representation or warranty, express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by RBS Hoare Govett or by any of their respective affiliates or agents as to, or in relation to, the accuracy or completeness of this announcement or any other written or oral information made available to or publicly available to any interested party or its advisers, and any liability therefore is expressly disclaimed.

RBS Hoare Govett, which is authorised and regulated in the United Kingdom by the FSA, is acting for IGas and for no-one else in connection with the Placing, and will not be responsible to anyone other than IGas for providing the protections afforded to customers of RBS Hoare Govett nor for providing advice to any other person in relation to the Placing or any other matter referred to herein.

The distribution of this announcement and the offering of the Placing Shares in certain jurisdictions may be restricted by law. No action has been taken by IGas or the Bookrunner that would permit an offering of such shares or possession or distribution of this announcement or any other offering or publicity material relating to such shares in any jurisdiction where action for that purpose is required. Persons into whose possession this announcement comes are required by IGas and the Bookrunner to inform themselves about, and to observe such restrictions.

The price of shares and the income from them may go down as well as up and investors may not get back the full amount invested on disposal of the shares.

MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THIS ANNOUNCEMENT (INCLUDING THE APPENDIX) AND THE TERMS AND CONDITIONS SET OUT IN THIS ANNOUNCEMENT ARE FOR INFORMATION PURPOSES ONLY AND ARE DIRECTED ONLY AT PERSONS WHO ARE: (A) (I) INVESTMENT PROFESSIONALS FALLING WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 (THE "ORDER"), OR (II) PERSONS FALLING WITHIN ARTICLE 49(2)(A) TO (D) ("HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC") OF THE ORDER, OR (III) PERSONS TO WHOM IT MAY OTHERWISE BE LAWFULLY COMMUNICATED; AND (B) (I) PERSONS IN MEMBER STATES OF THE EUROPEAN ECONOMIC AREA WHO ARE QUALIFIED INVESTORS (AS DEFINED IN ARTICLE 2(1)(E) OF EU DIRECTIVE 2003/71/EC (THE "PROSPECTUS DIRECTIVE")), AND/OR (II) PERSONS IN THE UNITED KINGDOM WHO ARE QUALIFIED INVESTORS (ALL SUCH PERSONS WITHIN BOTH (A) AND (B) ABOVE TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS"). THIS ANNOUNCEMENT (INCLUDING THE APPENDIX) AND THE TERMS AND CONDITIONS SET OUT IN THIS ANNOUNCEMENT MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS ANNOUNCEMENT (INCLUDING THE APPENDIX) AND THE TERMS AND CONDITIONS SET OUT IN THIS ANNOUNCEMENT RELATE IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. THIS ANNOUNCEMENT (INCLUDING THE APPENDIX) DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN IGAS PLC.

Persons (including individuals, funds or otherwise) by whom or on whose behalf a commitment to acquire Placing Shares has been given ("Placees") will be deemed to have read and understood this announcement, including the Appendix, in its entirety and to be making such offer on the terms and conditions, and to be providing the representations, warranties, acknowledgements, and undertakings contained in the Appendix. In particular, each such Placee represents, warrants and acknowledges that it is: (i) a Relevant Person (as defined above) and undertakes that it will acquire, hold, manage or dispose of any Placing Shares that are allocated to it for the purposes of its business; (ii) not within the United States; (iii) not within Australia, Canada, South Africa, Japan or any other jurisdiction in which it is unlawful to make or accept an offer to acquire the Placing Shares; and (iv) not acquiring the Placing Shares for the account of any person who is located in the United States, unless the instruction to acquire was received from a person outside the United States and the person giving such instruction has confirmed that it has the authority to give such instruction, and that either (a) it has investment discretion over such account or (b) it is an investment manager or investment company and, in the case of each of (a) and (b), that it is acquiring the Placing Shares in an "offshore transaction" (within the meaning of Regulation S under the United States Securities Act of 1933, as amended (the "Securities Act"); and (v) it is not acquiring the Placing Shares with a view to the offer, sale, resale, transfer, delivery or distribution, directly or indirectly, of any such Placing Shares into the United States or any other jurisdiction referred to in (iii) above.

This announcement, including the Appendix, is not for distribution directly or indirectly in or into the United States (including its territories and possessions, any state of the United States and the District of Columbia), Canada, Australia, South Africa or Japan or any jurisdiction into which the same would be unlawful. This announcement does not constitute or form part of an offer or solicitation to purchase or subscribe for shares in the capital of IGas in the United States, Canada, Australia, South Africa or Japan or any jurisdiction in which such an offer or solicitation is unlawful. In particular, the Placing Shares referred to in this announcement have not been, and will not be, registered under the Securities Act or under the securities legislation of any state of the United States, and may not be offered or sold in the United States absent registration or pursuant to an exemption from, or in a transaction not subject to, the registration requirements under the Securities Act. The Placing Shares referred to in this announcement are being offered and sold only outside the United States in accordance with Regulation S under the Securities Act. No public offering of securities of IGas will be made in connection with the Placing in the United Kingdom, the United States or elsewhere.

The relevant clearances have not been, and nor will they be, obtained from the securities commission of any province or territory of Canada; no prospectus or admission document has been lodged with, or registered by, the Australian Securities and Investments Commission, the South African Financial Services Board or the Japanese Ministry of Finance; and the Placing Shares have not been, and nor will they be, registered under or offered in compliance with the securities laws of any state, province or territory of Canada, Australia, South Africa or Japan. Accordingly, the Placing Shares may not (unless an exemption under the relevant securities laws is applicable) be offered, sold, resold or delivered, directly or indirectly, in or into the United States, Canada, Australia, South Africa or Japan or any other jurisdiction outside the United Kingdom.

The Placing Shares have not been approved or disapproved by the US Securities and Exchange Commission, any State securities commission or any other regulatory authority in the United States, nor have any of the foregoing authorities passed upon or endorsed the merits of the Placing or the accuracy or adequacy of this announcement. Any representation to the contrary is unlawful.

Persons (including, without limitation, nominees and trustees) who have a contractual or other legal obligation to forward a copy of the Appendix or this announcement should seek appropriate advice before taking any action.

The Placing Shares to which this announcement relates may be illiquid and / or subject to restrictions on their resale. Prospective purchasers of the Placing Shares offered should conduct their own due diligence on the Placing Shares. If you do not understand the contents of this announcement you should consult an authorised financial advisor.

The Placing Shares to be issued pursuant to the Placing will not be admitted to trading on any stock exchange other than the AIM market operated by the London Stock Exchange. Neither the content of IGas' website nor any website accessible by hyperlinks on IGas' website is incorporated in, or forms part of, this announcement.

APPENDIX

TERMS AND CONDITIONS

TERMS AND CONDITIONS

IMPORTANT INFORMATION FOR PLACEES ONLY REGARDING THE PLACING

Details of the Placing

The Bookrunner has entered into an agreement with IGas (the "Placing Agreement") under which, subject to the conditions set out in that agreement, the Bookrunner has agreed as agent and on behalf of the Company to use reasonable endeavours to procure subscribers for Placing Shares at a price determined following completion of the bookbuilding process in respect of the Placing (the "Bookbuild"), described in this announcement and set out in the Placing Agreement.

The Placing Shares will, when issued, be credited as fully paid and will rank pari passu in all respects with the existing ordinary shares of IGas including the right to receive all dividends and other distributions declared in respect of such ordinary shares after the date of issue of the Placing Shares.

As part of the Placing, IGas has agreed that it will not issue or sell any ordinary shares for a period of 180 days after Admission, without the prior consent of RBS Hoare Govett. This agreement does not however prevent IGas from granting or satisfying exercises of options granted pursuant to existing employee share schemes of IGas or in accordance with compensation arrangements for non-executive directors.

Application for admission to trading

Application will be made to the London Stock Exchange for admission of the Placing Shares to trading on AIM. It is expected that Admission will become effective on or around 7 March 2011 and that dealings in the Placing Shares will commence at that time.

Bookbuild

The Bookrunner will today commence the Bookbuild to determine demand for participation in the Placing by Placees. This Appendix gives details of the terms and conditions of, and the mechanics of participation in, the Placing. No commissions will be paid to Placees or by Placees in respect of any Placing Shares.

The Bookrunner shall be entitled to effect the Placing by such alternative method to the Bookbuild as it may, in its sole discretion following consultation with IGas, determine.

Participation in, and principal terms of, the Placing

1. RBS Hoare Govett is acting as bookrunner and agent of IGas.

2. Participation in the Placing will only be available to persons who may lawfully be, and are, invited to participate by the Bookrunner. The Bookrunner and its affiliates are each entitled to enter bids in the Bookbuild as principal.

3. The Bookbuild will establish a single price payable to the Bookrunner by all Placees whose bids are successful (the "Placing Price"). The Placing Price and the number of Placing Shares to be issued will be agreed between the Bookrunner and IGas following completion of the Bookbuild. The Placing Price and the number of Placing Shares will be announced on a Regulatory Information Service following the completion of the Bookbuild.

4. To bid in the Bookbuild, Placees should communicate their bid by telephone to their usual sales contact at the Bookrunner. Each bid should state the number of Placing Shares which the prospective Placee wishes to subscribe for at either the Placing Price, which is ultimately established by IGas and the Bookrunner, or at prices up to a price limit specified in its bid. Bids may be scaled down by the Bookrunner on the basis referred to in paragraph 9 below.

5. The Bookbuild is expected to close no later than 4.35 p.m. (London time) on 11 February 2011, but may be closed earlier or later at the discretion of the Bookrunner. The Bookrunner may, in agreement with IGas, accept bids that are received after the Bookbuild has closed. IGas reserves the right (upon the agreement of the Bookrunner) to reduce or seek to increase the amount to be raised pursuant to the Placing, in its absolute discretion.

6. Each prospective Placee's allocation will be agreed between the Bookrunner and IGas and will be confirmed orally by the Bookrunner as agent of IGas following the close of the Bookbuild. That oral confirmation will constitute an irrevocable legally binding commitment upon that person (who will at that point become a Placee) in favour of the Bookrunner and IGas to subscribe for the number of Placing Shares allocated to it at the Placing Price on the terms and conditions set out in this Appendix and in accordance with IGas' memorandum and articles of association.

7. Each Placee will also have an immediate, separate, irrevocable and binding obligation, owed to the Bookrunner as agent of IGas, to pay the Bookrunner (or as it may direct) in cleared funds, an amount equal to the product of the Placing Price and the number of Placing Shares such Placee has agreed to subscribe and IGas has agreed to allot and issue to that Placee.

8. The Bookrunner may choose to accept bids, either in whole or in part, on the basis of allocations determined in agreement with IGas and may scale down any bids for this purpose on such basis as they may determine. The Bookrunner may also, notwithstanding paragraphs 4 and 5 above, subject to the prior consent of IGas (i) allocate Placing Shares after the time of any initial allocation to any person submitting a bid after that time and (ii) allocate Placing Shares after the Bookbuild has closed to any person submitting a bid after that time.

9. A bid in the Bookbuild will be made on the terms and subject to the conditions in this announcement and will be legally binding on the Placee on behalf of which it is made and except with the consent of the Bookrunner will not be capable of variation or revocation after the time at which it is submitted.

10. Irrespective of the time at which a Placee's allocation pursuant to the Placing is confirmed, settlement for all Placing Shares to be acquired pursuant to the Placing will be required to be made at the same time, on the basis explained below under "Registration and Settlement".

11. All obligations under the Bookbuild and Placing will be subject to fulfilment of the conditions referred to below under "Conditions of the Placing" and to the Placing not being terminated on the basis referred to below under "Termination of the Placing Agreement".

12. By participating in the Bookbuild, each Placee will agree that its rights and obligations in respect of the Placing will terminate only in the circumstances described below and will not be capable of rescission or termination by the Placee.

13. To the fullest extent permissible by law, neither the Bookrunner nor any of its affiliates shall have any liability to Placees (or to any other person whether acting on behalf of a Placee or otherwise). In particular, neither the Bookrunner nor any of its affiliates shall have any liability (including to the fullest extent permissible by law, any fiduciary duties) in respect of its conduct of the Bookbuild or of such alternative method of effecting the Placing as the Bookrunner may determine.

Conditions of the Placing

The obligations of the Bookrunner under the Placing Agreement are conditional on, amongst other things:

(a) shareholder approval at a meeting convened for 4 March 2011;

(b) the acquisition agreement relating to the proposed acquisition of Nexen Exploration UK becoming unconditional in all respects;

(c) agreement being reached between IGas and the Bookrunner on the Placing Price and the number of Placing Shares;

(d) none of the representations and warranties contained in the Placing Agreement not being, or ceasing to be, true and accurate on the date of the Placing Agreement or at any time down to and including Admission (by reference to the facts and circumstances then existing);

(e) IGas complying with its obligations under the Placing Agreement to the extent the same fall to be performed or satisfied prior to Admission; 

(f) Admission taking place by 8.00 a.m. (London time) on 7 March 2011 (or such later date as IGas and the Bookrunner may otherwise agree); and

(g) in the opinion of the Bookrunner, there not having been a material adverse change in, or any development likely to involve a prospective material adverse change in the condition (financial, operational, legal or otherwise), or in the earnings, business affairs, trading position or business prospects of IGas and its subsidiaries, whether or not arising in the ordinary course of business since the date of the Placing Agreement.

If any of the conditions contained in the Placing Agreement in relation to the Placing Shares are not fulfilled or waived by the Bookrunner, by the respective time or date where specified (or such later time and/or date as IGas and the Bookrunner may agree), the Placing will not proceed and the Placee's rights and obligations hereunder in relation to the Placing Shares shall cease and terminate at such time and each Placee agrees that no claim can be made by the Placee in respect thereof.

The Bookrunner may, at its discretion and upon such terms as it thinks fit, waive compliance by IGas with the whole or any part of any of IGas' obligations in relation to the conditions in the Placing Agreement save that the conditions in the Placing Agreement relating to Admission taking place, the acquisition being approved by Shareholders and the acquisition agreement becoming unconditional in all respects may not be waived. Any such extension or waiver will not affect Placees' commitments as set out in this announcement.

None of the Bookrunner, IGas or any other person shall have any liability to any Placee (or to any other person whether acting on behalf of a Placee or otherwise) in respect of any decision they may make as to whether or not to waive or to extend the time and / or the date for the satisfaction of any condition to the Placing nor for any decision they may make as to the satisfaction of any condition or in respect of the Placing generally, and by participating in the Placing each Placee agrees that any such decision is within the absolute discretion of the Bookrunner.

Termination of the Placing Agreement

The Bookrunner is entitled, at any time before Admission, to terminate the Placing Agreement in relation to its obligations in respect of the Placing Shares by giving notice to IGas if, amongst other things:

(a) (i) any of IGas' warranties, representations or undertakings contained in the Placing Agreement are not or cease to be true and accurate or (ii) there is a failure by IGas to comply with its obligations under the Placing Agreement; or

(b) it shall come to the notice of the Bookrunner that any statement contained in this announcement, or any other document or announcement issued or published by or on behalf of IGas in connection with the Placing (together the "Placing Documents"), is or has become untrue, incorrect or misleading, or any matter has arisen, which would, if the Placing were made at that time, constitute a material omission from the Placing Documents, or any of them, in each case in a manner which, in the good faith opinion of the Bookrunner, is material in the context of the Placing; or

(c) in the good faith opinion of the Bookrunner, there has been a material adverse change in, or any development reasonably likely to involve a prospective material adverse change in the condition (financial, operational, legal or otherwise), or in the earnings, business affairs, trading position or business prospects of IGas and its subsidiaries, whether or not arising in the ordinary course of business since the date of the Placing Agreement; or

(d) there has occurred (i) any material adverse change in the financial markets in the United States, the United Kingdom, a member state of the European Union or in the international financial markets, (ii) any outbreak or escalation of hostilities or other calamity or crisis or (iii) any change or development involving a prospective change in national or international political, financial or economic conditions, or currency exchange rates, in each case the effect of which is such as to make it, in the opinion of the Bookrunner (arrived at after such consultation with IGas as shall be reasonably practicable in the circumstances), impracticable or inadvisable to market the Placing Shares or to proceed with the Placing in the manner contemplated in the Placing Documents or which may adversely affect the success of the Placing or dealings in the Placing Shares following Admission; or

(e) trading in Ordinary Shares on AIM is cancelled, suspended or limited or there are certain other disruptions, limitations or suspensions in respect of the operations of certain stock exchanges or a banking moratorium is declared by certain authorities.

Upon such termination, the parties to the Placing Agreement shall be released and discharged (except for any liability arising before or in relation to such termination) from their respective obligations under or pursuant to the Placing Agreement subject to certain exceptions.

By participating in the Placing, Placees agree that the exercise by the Bookrunner of any right of termination or other discretion under the Placing Agreement shall be within the absolute discretion of the Bookrunner and that they need not make any reference to Placees and that they shall have no liability to Placees whatsoever in connection with any such exercise or failure so to exercise.

No prospectus

No offering document, prospectus or admission document has been or will be submitted to be approved by the FSA or submitted to the London Stock Exchange in relation to the Placing and Placees' commitments will be made solely on the basis of the information contained in this announcement (including this Appendix) released by IGas today, and subject to the further terms set forth in the contract note to be provided to individual prospective Placees.

Each Placee, by accepting a participation in the Placing, agrees that the content of this Announcement (including this Appendix) is exclusively the responsibility of IGas and confirms that it has neither received nor relied on any other information, representation, warranty, or statement made by or on behalf of IGas or the Bookrunner or any other person and none of the Bookrunner or IGas nor any other person will be liable for any Placee's decision to participate in the Placing based on any other information, representation, warranty or statement which the Placees may have obtained or received. Each Placee acknowledges and agrees that it has relied on its own investigation of the business, financial or other position of IGas in accepting a participation in the Placing. Nothing in this paragraph shall exclude the liability of any person for fraudulent misrepresentation.

Registration and settlement

Settlement of transactions in the Placing Shares following Admission will take place within the system administered by Euroclear UK & Ireland Limited ("CREST"), subject to certain exceptions. IGas reserves the right to require settlement for and delivery of the Placing Shares (or a portion thereof) to Placees in certificated form if, in the Bookrunner's opinion, delivery or settlement is not possible or practicable within the CREST system or would not be consistent with the regulatory requirements in the Placee's jurisdiction.

Following the close of the Bookbuild for the Placing, each Placee allocated Placing Shares in the Placing will be sent a contract note stating the number of Placing Shares to be allocated to it at the Placing Price and settlement instructions.

Each Placee agrees that it will do all things necessary to ensure that delivery and payment is completed in accordance with the standing CREST or certificated settlement instructions that it has in place with the Bookrunner.

IGas will deliver the Placing Shares to a CREST account (Participant ID: 521; Member Account: AGENT) operated by RBS Hoare Govett as agent for IGas and RBS Hoare Govett will enter its delivery (DEL) instruction into the CREST system. The input to CREST by a Placee of a matching or acceptance instruction will then allow delivery of the relevant Placing Shares to that Placee against payment.

It is expected that settlement will take place on 7 March 2011, on a delivery versus payment basis.

Interest is chargeable daily on payments not received from Placees on the due date in accordance with the arrangements set out above at the rate of two percentage points above LIBOR as determined by the Bookrunner.

Each Placee is deemed to agree that, if it does not comply with these obligations, the Bookrunner may sell any or all of the Placing Shares allocated to that Placee on such Placee's behalf and retain from the proceeds, for the Bookrunner's account and benefit, an amount equal to the aggregate amount owed by the Placee plus any interest due. The relevant Placee will, however, remain liable for any shortfall below the aggregate amount owed by it and may be required to bear any stamp duty or stamp duty reserve tax (together with any interest or penalties) which may arise upon the sale of such Placing Shares on such Placee's behalf.

If Placing Shares are to be delivered to a custodian or settlement agent, Placees should ensure that the trade confirmation is copied and delivered immediately to the relevant person within that organisation. Insofar as Placing Shares are registered in a Placee's name or that of its nominee or in the name of any person for whom a Placee is contracting as agent or that of a nominee for such person, such Placing Shares should, subject as provided below, be so registered free from any liability to UK stamp duty or stamp duty reserve tax. Placees will not be entitled to receive any fee or commission in connection with the Placing.

Representations and warranties

By participating in the Placing each Placee (and any person acting on such Placee's behalf) irrevocably acknowledges, confirms, undertakes, represents, warrants and agrees (as the case may be) with the Bookrunner (in its capacity as underwriter of settlement of the Placing Shares and bookrunner and placing agent of the Company, in each case as a fundamental term of their application for Placing Shares), the following:

1. that it has read this announcement, including the Appendix, in its entirety;

2. that (i) no offering document, listing particulars, prospectus or admission document has been or will be prepared in connection with the Placing and (ii) it has not received a prospectus, admission document or other offering document in connection with the Bookbuild, the Placing or the Placing Shares;

3. that the ordinary shares in the capital of IGas are admitted to trading on AIM, and IGas is therefore required to publish certain business and financial information in accordance with the rules and practices of AIM (collectively, the "Exchange Information"), which includes a description of the nature of IGas' business and IGas' most recent balance sheet and profit and loss account and that it is able to obtain or access (i) such Exchange Information and (ii) such information or comparable information concerning any other publicly traded company, in each case without undue difficulty;

4. that none of the Bookrunner or IGas nor any of their affiliates nor any person acting on behalf of any of them has provided, and will not provide, it with any material regarding the Placing Shares or IGas or any other person other than this announcement; nor has it requested any of the Bookrunner, IGas, any of their affiliates or any person acting on behalf of any of them to provide it with any such information;

5. that the Placing Shares have not been and will not be registered under the securities legislation of the United States, Australia, Canada, South Africa or Japan and, subject to certain exceptions, may not be offered, sold, transferred, delivered or distributed, directly or indirectly, in or into those jurisdictions;

6. that (i) it is not within the United States; (ii) it is not within Australia, Canada, South Africa, Japan or any other jurisdiction in which it is unlawful to make or accept an offer to acquire the Placing Shares; (iii) it is not acquiring the Placing Shares for the account of any person who is located in the United States, unless the instruction to acquire was received from a person outside the United States and person giving such instruction has confirmed that it has the authority to give such instruction, and that either (a) it has investment discretion over such account or (b) it is an investment manager or investment company and, in the case of each of (a) and (b), that it is acquiring the Placing Shares in an "offshore transaction" (within the meaning of Regulation S under the Securities Act); and (iv) it is not acquiring the Placing Shares with a view to the offer, sale, resale, transfer, delivery or distribution, directly or indirectly, of any such Placing Shares into the United States or any other jurisdiction referred to in (ii) above;

7. that the content of this announcement is exclusively the responsibility of IGas and that neither the Bookrunner nor any person acting on its behalf has or shall have any liability for any information, representation or statement contained in this announcement or any information previously published by or on behalf of IGas and will not be liable for any Placee's decision to participate in the Placing based on any information, representation or statement contained in this announcement or otherwise. Each Placee further represents, warrants and agrees that the only information on which it is entitled to rely and on which such Placee has relied in committing itself to subscribe for the Placing Shares is contained in this announcement and any information previously published by IGas by notification to a Regulatory Information Service, such information being all that it deems necessary to make an investment decision in respect of the Placing Shares and that it has neither received nor relied on any other information given or representations, warranties or statements made by the Bookrunner or IGas and neither of the Bookrunner or IGas will be liable for any Placee's decision to accept an invitation to participate in the Placing based on any other information, representation, warranty or statement. Each Placee further acknowledges and agrees that it has relied on its own investigation of the business, financial or other position of IGas in deciding to participate in the Placing;

8. that neither the Bookrunner nor any person acting on behalf of it nor any of its affiliates has or shall have any liability for any publicly available or filed information, or any representation relating to IGas, provided that nothing in this paragraph excludes the liability of any person for fraudulent misrepresentation made by that person;

9. that neither it, nor the person specified by it for registration as a holder of Placing Shares is, or is acting as nominee or agent for, and that the Placing Shares will not be allotted to, a person who is or may be liable to stamp duty or stamp duty reserve tax under any of sections 67, 70, 93 and 96 of the Finance Act 1986 (depositary receipts and clearance services);

10. that it has complied with its obligations under the Criminal Justice Act 1993, section 118 of the Financial Services and Markets Act 2000 ("FSMA") and in connection with money laundering and terrorist financing under the Proceeds of Crime Act 2002 (as amended), the Terrorism Act 2000, the Terrorism Act 2006, the Money Laundering Regulations 2007 (the "Regulations") and the Money Laundering Sourcebook of the FSA and, if making payment on behalf of a third party, that satisfactory evidence has been obtained and recorded by it to verify the identity of the third party as required by the Regulations;

11. that it is acting as principal only in respect of the Placing or, if it is acting for any other person (i) it is duly authorised to do so, and (ii) it is and will remain liable to IGas and/or the Bookrunner for the performance of all its obligations as a Placee in respect of the Placing (regardless of the fact that it is acting for another person);

12. if a financial intermediary, as that term is used in Article 3(2) of EU Directive 2003/71/EC (the "Prospectus Directive") (including any relevant implementing measure in any member state), that the Placing Shares subscribed by it in the Placing will not be acquired on a non-discretionary basis on behalf of, nor will they be acquired with a view to their offer or resale to, persons in a member state of the European Economic Area other than to qualified investors, or in circumstances in which the prior consent of the Bookrunner has been given to the proposed offer or resale;

13. that it has not offered or sold and, prior to the expiry of a period of six months from Admission, will not offer or sell any Placing Shares to persons in the United Kingdom, except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their business or otherwise in circumstances which have not resulted and which will not result in an offer to the public in the United Kingdom within the meaning of section 85(1) of FSMA;

14. that it has not offered or sold and will not offer or sell any Placing Shares to persons in the European Economic Area prior to Admission except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their business or otherwise in circumstances which have not resulted in and which will not result in an offer to the public in any member state of the European Economic Area within the meaning of the Prospectus Directive (including any relevant implementing measure in any member state);

15. that it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of FSMA) relating to the Placing Shares in circumstances in which section 21(1) of FSMA does not require approval of the communication by an authorised person;

16. that it has complied and will comply with all applicable provisions of FSMA with respect to anything done by it in relation to the Placing Shares in, from or otherwise involving, the United Kingdom;

17. (A) that it is a person falling within Article 19(5) and / or Article 49(2)(a) to (d) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 or is a person to whom this Announcement may otherwise be lawfully communicated; and

(B) that any offer of Placing Shares may only be directed at persons to the extent in member states of the European Economic Area who are "qualified investors" within the meaning of Article 2(1)(e) of the Prospectus Directive (Directive 2003/71/EC) and represents and agrees that it is such a qualified investor;

18. that it is entitled to purchase the Placing Shares under the laws of all relevant jurisdictions which apply to it, and that its subscription/purchase of the Placing Shares will be in compliance with applicable laws and regulations in the jurisdiction of its residence, the residence of the Company, or otherwise;

19. that it (and any person acting on its behalf) will make payment for the Placing Shares allocated to it in accordance with this announcement on the due time and date set out herein, failing which the relevant Placing Shares may be placed with other subscribers or sold as the Bookrunner may in its discretion determine and without liability to such Placee;

20. that its allocation (if any) of Placing Shares will represent a maximum number of Placing Shares which it will be entitled, and required, to subscribe for, and that IGas may call upon it to subscribe for a lower number of Placing Shares (if any), but in no event in aggregate more than the aforementioned maximum;

21. that neither the Bookrunner, nor any of its affiliates, nor any person acting on its or their behalf, is making any recommendations to it, advising it regarding the suitability of any transactions it may enter into in connection with the Placing and that participation in the Placing is on the basis that it is not and will not be a client of the Bookrunner and that the Bookrunner has no duties or responsibilities to it for providing the protections afforded to their clients or customers or for providing advice in relation to the Placing nor in respect of any representations, warranties, undertakings or indemnities contained in the Placing Agreement nor for the exercise or performance of any of its rights and obligations thereunder including any rights to waive or vary any conditions or exercise any termination right;

22. that the person whom it specifies for registration as holder of the Placing Shares will be (i) itself or (ii) its nominee, as the case may be. Neither the Bookrunner nor IGas will be responsible for any liability to stamp duty or stamp duty reserve tax resulting from a failure to observe this requirement. Each Placee and any person acting on behalf of such Placee agrees to participate in the Placing and it agrees to indemnify IGas and the Bookrunner in respect of the same on the basis that the Placing Shares will be allotted to the CREST stock account of RBS Hoare Govett who will hold them as nominee on behalf of such Placee until settlement in accordance with its standing settlement instructions;

23. that these terms and conditions and any agreements entered into by it pursuant to these terms and conditions and any non-contractual obligations arising out of or in connection with such agreements shall be governed by and construed in accordance with the laws of England and Wales and it submits (on behalf of itself and on behalf of any person on whose behalf it is acting) to the exclusive jurisdiction of the English courts as regards any claim, dispute or matter arising out of any such contract, except that enforcement proceedings in respect of the obligation to make payment for the Placing Shares (together with any interest chargeable thereon) may be taken by IGas or the Bookrunner in any jurisdiction in which the relevant Placee is incorporated or in which any of its securities have a quotation on a recognised stock exchange;

24. that IGas and RBS Hoare Govett will rely upon the truth and accuracy of the representations, warranties and acknowledgements set forth herein and which are irrevocable and it irrevocably authorises IGas and RBS Hoare Govett to produce this announcement, pursuant to, in connection with, or as may be required by any applicable law or regulation, administrative or legal proceeding or official inquiry with respect to the matters set forth herein;

25. that it will indemnify and hold IGas, the Bookrunner and their respective affiliates harmless from any and all costs, claims, liabilities and expenses (including legal fees and expenses) arising out of or in connection with any breach of the representations, warranties, acknowledgements, agreements and undertakings in this Appendix and further agrees that the provisions of this Appendix shall survive after completion of the Placing;

26. that it will acquire any Placing Shares subscribed by it for its account or for one or more accounts as to each of which it exercises sole investment discretion and it has full power to make the acknowledgements, representations and agreements herein on behalf of each such account;

27. that its commitment to subscribe for Placing Shares on the terms set out herein and in the contract note will continue notwithstanding any amendment that may in future be made to the terms of the Placing and that Placees will have no right to be consulted or require that their consent be obtained with respect to IGas' conduct of the Placing. The foregoing representations, warranties and confirmations are given for the benefit of IGas as well as the Bookrunner. The agreement to settle a Placee's subscription (and/or the subscription of a person for whom such Placee is contracting as agent) free of stamp duty and stamp duty reserve tax depends on the settlement relating only to the subscription by it and/or such person direct from IGas for the Placing Shares in question. Such agreement assumes, and is based on a warranty from each Placee, that neither it, nor the person specified by it for registration as holder, of Placing Shares is, or is acting as nominee or agent for, and that the Placing Shares will not be allotted to, a person who is or may be liable to stamp duty or stamp duty reserve tax under any of sections 67, 70, 93 and 96 of the Finance Act 1986 (depositary receipts and clearance services). If there are any such arrangements, or the settlement relates to any other dealing in the Placing Shares, stamp duty or stamp duty reserve tax may be payable. In that event the Placee agrees that it shall be responsible for such stamp duty or stamp duty reserve tax, and neither IGas nor the Bookrunner shall be responsible for such stamp duty or stamp duty reserve tax. If this is the case, each Placee should seek its own advice and notify the Bookrunner accordingly;

28. that no action has been or will be taken by any of IGas, the Bookrunner or any person acting on behalf of IGas or the Bookrunner that would, or is intended to, permit a public offer of the Placing Shares in any country or jurisdiction where any such action for that purpose is required;

29. that in making any decision to subscribe for the Shares, it has knowledge and experience in financial, business and international investment matters as is required to evaluate the merits and risks of subscribing for or purchasing the Placing Shares. It further confirms that it is experienced in investing in securities of this nature in this sector and is aware that it may be required to bear, and is able to bear, the economic risk of, and is able to sustain a complete loss in connection with the Placing. It further confirms that it relied on its own examination and due diligence of IGas and its associates taken as a whole, and the terms of the Placing, including the merits and risks involved;

30. that it has (a) made its own assessment and satisfied itself concerning legal, regulatory, tax, business and financial considerations in connection herewith to the extent it deems necessary; (b) had access to review publicly available information concerning the IGas group that it considers necessary or appropriate and sufficient in making an investment decision; (c) reviewed such information as it believes is necessary or appropriate in connection with its subscription or purchase of the Placing Shares; and (d) made its investment decision based upon its own judgement, due diligence and analysis and not upon any view expressed or information provided by or on behalf of RBS Hoare Govett;

31. that it may not rely on any investigation that RBS Hoare Govett or any person acting on its behalf may or may not have conducted with respect to IGas, its group, or the Placing and RBS Hoare Govett has not made any representation to it, express or implied, with respect to the merits of the Placing, the subscription or purchase of the Placing Shares, or as to the condition, financial or otherwise, of IGas, its group, or as to any other matter relating thereto, and nothing herein shall be construed as a recommendation to it to purchase the Placing Shares. It acknowledges and agrees that no information has been prepared by RBS Hoare Govett or IGas for the purposes of this Placing;

32. accordingly it acknowledges and agrees that it will not hold RBS Hoare Govett, any of its respective associates or any person acting on their behalf responsible or liable for any misstatements in or omission from any publicly available information relating to IGas' group or information made available (whether in written or oral form) in presentations or as part of roadshow discussions with investors relating to IGas' group (the "Information") and that none of RBS Hoare Govett or any person acting on behalf of RBS Hoare Govett, makes any representation or warranty, express or implied, as to the truth, accuracy or completeness of such Information or accepts any responsibility for any of such Information;

33. irrevocably appoints any director or employee of the Bookrunner as its agent for the purpose of executing and delivering to IGas and / or the registrar any documents on its behalf necessary to enable it to be registered as the holder of Ordinary Shares comprising its participation in the Placing or to complete the sale of such Ordinary Shares in the circumstances referred to in this Announcement;

34. that, if it is a pension fund or investment company, its subscription for Placing Shares is in full compliance with all applicable laws and regulation; and

35. that in connection with the Placing, each of RBS Hoare Govett and any of its affiliates acting as an investor for its own account may take up shares in IGas and in that capacity may retain, purchase or sell for its own account such shares in IGas and any securities of IGas or related investments and may offer or sell such securities or other investments otherwise than in connection with the Placing. RBS Hoare Govett does not intend to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligation to do so.

By participating in the Placing, each Placee (and any person acting on the Placee's behalf) subscribing for Placing Shares acknowledges that: (i) the Placing Shares are being offered and sold only pursuant to Regulation S under the Securities Act in a transaction not involving a public offering of securities in the United States and the Placing Shares have not been and will not be registered under the Securities Act; and (ii) the offer and sale of the Placing Shares to it has been made outside of the United States in an "offshore transaction" (as such term is defined in Regulation S under the Securities Act) and it is outside of the United States during any offer or sale of Placing Shares to it.

In addition, Placees should note that they will be liable for any stamp duty and all other stamp, issue, securities, transfer, registration, documentary or other duties or taxes (including any interest, fines or penalties relating thereto) payable outside the United Kingdom by them or any other person on the subscription by them of any Placing Shares or the agreement by them to subscribe for any Placing Shares.

Each Placee and any person acting on behalf of each Placee acknowledges and agrees that the Bookrunner or any of their affiliates may, at their absolute discretion, agree to become a Placee in respect of some or all of the Placing Shares.

When a Placee or person acting on behalf of the Placee is dealing with the Bookrunner, any money held in an account with the Bookrunner on behalf of the Placee and/or any person acting on behalf of the Placee will not be treated as client money within the meaning of the rules and regulations of the FSA made under FSMA. The Placee acknowledges that the money will not be subject to the protections conferred by the client money rules; as a consequence, this money will not be segregated from the Bookrunner's money in accordance with the client money rules and will be used by the Bookrunner in the course of its own business; and the Placee will rank only as a general creditor of the Bookrunner.

All times and dates in this announcement may be subject to amendment. The Bookrunner shall notify the Placees and any person acting on behalf of the Placees of any changes.

Past performance is no guide to future performance and persons needing advice should consult an independent financial adviser.

DEFINITIONS

In this Announcement:

"Admission" means the admission of the Placing Shares to trading on AIM becoming effective in accordance with the AIM Rules;

"AIM" means the AIM market operated by the London Stock Exchange;

"AIM Rules" means the current rules published by the London Stock Exchange applicable to companies with a class of securities admitted to trading on AIM;

"Announcement" means this announcement (including the appendix to this announcement);

"Board" or "Directors" means the directors of the Company;

"Bookrunner" means RBS Hoare Govett Limited;

"bcf" means billion standard cubic feet of gas;

"CBM" means coal bed methane;

"CREST" means the relevant system, as defined in the Uncertificated Securities Regulations 2001 (SI 2001/3755) (in respect of which Euroclear UK & Ireland Limited is the operator);

"DECC" means the Department for Energy and Climate Change;

"FDP" means Field Development Plan;

"FSA" means the Financial Services Authority;

"G&A" means general and administrative expenses;

"Group" means the Company and its subsidiary undertakings from time to time and all of them and each of them as the context admits and "Group Company" means any one of them and which, for the avoidance of doubt, shall include Nexen unless the context requires otherwise;

"IFRS" means International Financial Reporting Standards;

"IGas" or the "Company" means IGas Energy plc and/or its subsidiaries as appropriate;

"London Stock Exchange" means London Stock Exchange plc;

"Nexen Exploration UK" means Nexen Exploration UK Limited;

"Ordinary Shares" means ordinary shares of 50 pence each in the capital of the Company and "Ordinary Share" means any one of them;

"PEDL" means UK Petroleum Exploration and Development Licences;

"Placees" means persons by whom or on whose behalf a commitment to acquire Placing Shares has been given and "Placee" means any one of them;

"Placing" means the placing of the Placing Shares by the Bookrunner, on behalf of the Company, with both new and existing institutional investors;

"Placing Agreement" means the placing agreement dated 11 February 2011 among the Company and the Bookrunner in respect of the Placing;

"Placing Price" means the price per Ordinary Share at which the Placing Shares are placed;

"Placing Shares" means the Ordinary Shares which are to be issued pursuant to the Placing;

"Prospectus Directive" means the Directive of the European Parliament and of the Council of the European Union 2003/71/EC;

"RBS Hoare Govett" means RBS Hoare Govett Limited;

"Regulatory Information Service" means any of the regulatory information services included within the list maintained on the London Stock Exchange's website;

"Securities Act" means the US Securities Act of 1933, as amended;

"Shareholders" means holders of Ordinary Shares and "Shareholder" means any one of them;

"United Kingdom" or "UK" means the United Kingdom of Great Britain and Northern Ireland; and

"United States" or "US" means the United States of America, its territories and possessions, any state of the United States and the District of Columbia.