KEA.L Regulatory News (KEA)

For Immediate Release 5 November 2014

Kea Petroleum plc

 ("Kea" or "the Company")

Posting of Annual Report and Notice of AGM

And Proposed Reorganisation of Share Capital

Kea Petroleum plc (AIM: KEA), the oil and gas exploration company focused on New Zealand, announces that its Annual Report and Accounts for the year ended 31 May 2014 and Notice of Annual General Meeting ("AGM") have been posted to shareholders and will be made available at the Company's website: www.keapetroleum.com.

AGM

The Company's AGM will be held on 28 November 2014 at 11:30am at 5-8 The Sanctuary, London, SW1P 3JS.

In addition to the routine business, the Company will be asking shareholders to approve some items of special business including the proposed reorganisation of the Company's share capital ("Proposed Reorganisation").

Proposed Reorganisation

The Ordinary Shares have in recent months frequently been trading on AIM at a price below their nominal value of 1p per share. The issue of new shares by a UK company at a price below their nominal value is prohibited by UK company law and accordingly the ability of the Company to raise funds by way of the issue of further equity has been inhibited.

Accordingly the Directors are seeking Shareholders' authority to implement the Proposed Reorganisation to create a differential between the nominal value of the Ordinary Shares and their market price to facilitate future share issues.

In addition the share price levels at which the Ordinary Shares have recently traded means that small absolute movements in the share price represent large percentage movements, resulting in share price volatility. In addition, the Directors believe that the bid offer spread at these price levels can be disproportionate, to the detriment of Shareholders. Accordingly the Proposed Reorganisation will also have the effect of a consolidation of the Ordinary Shares on a one for ten basis.

To give effect to the Proposed Reorganisation the current articles of association (the "Articles") of the Company will need to be amended to make changes to allow the creation of the deferred shares of 9 pence each ("the Deferred Shares"). These amendments will also require Shareholders' approval at the AGM.

Details of the Proposed Reorganisation and the proposed amendments to the Articles are set out below.

Share Capital Reorganisation

As at 31 October 2014, being the latest practicable date prior to the publication of this document, the total issued share capital of the Company was £9,398,695.67 divided into 939,869,567 Existing Ordinary Shares. To facilitate the Proposed Reorganisation sufficient further Existing Ordinary Shares will be issued immediately prior to the Record Date to ensure the total number of Existing Ordinary Shares in issue at that time is divisible by ten (the "Rounding Shares").

It is proposed that the following steps shall be taken in relation to the Company's share capital to effect the Proposed Reorganisation:

1. the Existing Ordinary Shares of 1 penny will be consolidated on the basis of one Interim Ordinary Share of 10 pence each for every 10 Existing Ordinary Shares; and

2. immediately following such consolidation each Interim Ordinary Share will be subdivided and converted into one New Ordinary Share of 1 penny and one Deferred Share of 9 pence each.

Ordinary Shares

As a consequence of, and immediately following, the Proposed Reorganisation becoming effective each Shareholder's holding of New Ordinary Shares will (ignoring fractional entitlements) be one tenth of the number of Existing Ordinary Shares held by them on the Record Date. However each Shareholder's proportionate interest in the Company's issued ordinary share capital will, and thus the aggregate value of their holding should, remain unchanged as a result of the Proposed Reorganisation.

The New Ordinary Shares will continue to carry the same rights as attached to the Existing Ordinary Shares.

The last day of trading on AIM in the Existing Ordinary Shares is expected to be 28 November 2014.

If approved, following the Proposed Reorganisation becoming effective, and assuming no shares other than the Rounding Shares are issued between 31 October 2014 (being the latest practicable date prior to the printing of this document) and the date the Proposed Reorganisation becomes effective (expected to be 8.30 am 1 December 2014), the Company's issued ordinary share capital will comprise 93,986,957 New Ordinary Shares.

If the Proposed Reorganisation is approved, the New Ordinary Shares will be admitted to trading on AIM with ISIN GB00BRTL3035.

New share certificates representing New Ordinary Shares will be sent to Shareholders who hold shares in certificated form no later than 12 December 2014. On receipt of the new share certificates all ordinary share certificates previously issued can be destroyed. If you do not receive a new share certificate and you believe you are entitled to one please contact the Company's registrars, Capita Asset Services, The Registry, 34 Beckenham Road, Beckenham, Kent, BR3 4TU. Shareholders who hold their entitlement to Existing Ordinary Shares in uncertificated form through CREST are expected to have their CREST accounts adjusted to reflect their entitlement to New Ordinary Shares on 1 December 2014.

Fractional Entitlements

Where a Shareholder's holding of Existing Ordinary Shares either comprises less than 10 Existing Ordinary Shares or is not a multiple of 10 such fractional entitlements that would otherwise arise, the Shareholder's holding will be consolidated into Interim Ordinary Shares and the New Ordinary Shares arising from the sub division of such Interim Ordinary Shares will be sold for the benefit of the Company. The Deferred Shares arising from such conversion will be transferred to the Company for token value and cancelled.

Deferred Shares

The Deferred Shares created will be effectively valueless as they will not carry any rights to vote or dividend rights. In addition, holders of Deferred Shares will only be entitled to a payment on a return of capital or on a winding up of the Company after each of the holders of Ordinary Shares have received a payment of £10,000,000 on each such share. The Deferred Shares will not be listed or traded on AIM and will not be transferable without the prior written consent of the Board. No share certificates will be issued in respect of the Deferred Shares, nor will CREST accounts of shareholders be credited in respect of any entitlement to Deferred Shares.

Changes to the Articles of Association

In connection with the Proposed Reorganisation the Company also proposes to amend its Articles to include the rights and restrictions attaching to the Deferred Shares, as set out above.

For further information please contact:

Notes to Editors:

Kea Petroleum is an AIM listed oil and gas exploration company with interests in three petroleum exploration permits in the Taranaki Basin of New Zealand. Kea listed on the London AIM market in February 2010.