MXP.L Regulatory News (MXP)

Max Petroleum Plc

(the "Company" or "Max Petroleum")

Corporate Update, Directorate Changes and Issue of Share Options

21 December 2012

Max Petroleum Plc, an oil and gas exploration and production company focused on Kazakhstan, is pleased to provide an update on its debt restructuring previously announced on 27 November 2012 (the "Restructuring") that at separate Shareholder and Bondholder Extraordinary General meetings today all resolutions have been duly passed with more than 99% of votes cast in favour of the Restructuring. Mr. Lee Kraus has also resigned as a Non-Executive Director and has been replaced by Mr. Malcolm Butler, a nominee of certain Bondholders. As contemplated by the Restructuring, the Company also announces changes to the terms of share options held by current employees and directors and grants of additional share options.

Restructuring Update

The Company is now proceeding with closing the US$90 million credit facility with SB Sberbank JSC (the "Sberbank Facility") and expects the initial US$60 million tranche to be made available for draw down prior to 31 December 2012. A further US$30 million will be made available under the Sberbank Facility as soon as certain conditions precedent are met, including the registering of security and obtaining requisite government regulatory approvals, which are expected to be completed by 31 March 2013.

Regarding the Company's US$85.6 million 6.75% convertible bonds (the "Bonds"), a total of US$6.7 million in principal amount of the Bonds were tendered for cash payment out of a total principal amount available for tender of US$17.1 million. The Company will make a payment to tendering Bondholders, of 50% of the US$6.7 million principal amount tendered, out of the second tranche of the Sberbank Facility and the Bonds accepted into the tender will be cancelled. The remaining principal amount of the Bonds, together with accrued interest, will be converted into the Company's ordinary shares of 0.01p (the "Shares") at a price of 5p per Share in two tranches. The first tranche of approximately US$56.7 million of Bonds and accrued interest will immediately be converted into 709 million Shares. The remaining US$22.2 million in Bonds, plus accrued interest, will be mandatorily converted into Shares following the receipt of requisite Kazakh regulatory approvals expected in the first half of 2013. Following conversion, each tranche of the Shares will be allotted and applications will be made for them to be admitted to trading on AIM (each an "Admission"). Further updates will be announced in due course confirming the expected dates of such Admissions.

Until conversion, the terms of the remaining outstanding Bonds have been modified such that the coupon will be 10% per annum with interest payable in kind and the maturity date has been extended to 8 March 2018 (though it is expected that these remaining Bonds will convert into Shares in the first half of 2013). Shares issued to Bondholders as part of the Restructuring are subject to a 90 day lock up from the date of the initial conversion.

It is expected that a total of approximately 1,052 million Shares will be issued to Bondholders pursuant to the Restructuring assuming that all outstanding Bonds are converted into Shares by 31 March 2013.

Board Changes

The Company also announces today that Lee Kraus has resigned as a Non-Executive Director and has been replaced by Malcolm Butler. The Board of Directors would like to thank Mr. Kraus for his contribution to Max Petroleum over the last five and a half years, and wishes him well in his current and future business endeavours.

The Board would like to welcome Mr. Butler to the Board as a Director nominated by a group of Bondholders under the terms of the Restructuring. He brings extensive operational and financial experience in the international oil and gas industry. He holds a BSc in Geology from Aberystwyth and a PhD in Geology from Bristol, and he worked for over 25 years as an explorationist and senior executive in the worldwide oil and gas business before taking on a secondary role as an investment banker. Since 2003, he has acted as senior adviser on energy-related matters to Seymour Pierce Limited, and he is President of Waterloo Oil & Gas LLC, an exploration and production partnership active in onshore Louisiana as well as Chairman of Brigantes Energy Limited and Corfe Energy Limited, both EIS-funded exploration companies with non-operated activities in the UK. In 1994, Mr. Butler was awarded the Aberconway Medal of the Geological Society of London, in recognition of his contributions to the oil and gas industry, and in 1995 he was appointed an Honorary Professor at the University of Aberystwyth.

The further disclosures required by the AIM Rules for Companies in relation to Mr. Butler's appointment are set out at the end of this announcement.

Changes to Terms of Existing Options and Issue of Additional Options

Max Petroleum today announces certain adjustments to the terms of share options with an exercise price above 5p per share held by the Company's current employees and Directors, resulting in the exercise price of such existing options to subscribe for 55.4 million Shares being changed to 5p per Share.

The Remuneration Committee recommended, and the Board approved, the re-pricing of outstanding share options held by Directors as follows:

In addition a total of 28.5 million Shares held by employees of the company were re-priced to give them an exercise price of 5p.

New options to subscribe for Shares have also been granted to Directors of the Company as follows:

In addition a total of 43 million new options to subscribe for Shares were also awarded to certain employees of the Company on the same terms to those shown above.

The Remuneration Committee recommended, and the Board approved, the re-pricing of outstanding share options and the award of new options in order to incentivise and retain the Company's management and employees judged to be critical to enhancing the future market value of the Company.

Executive Co-Chairmen Robert Holland and Jim Jeffs said:

"We are grateful for the patience and support of our Bondholders and Shareholders reflected in their overwhelming approval of the restructuring, and particularly note that the cash tender offer was undersubscribed as Bondholders elected to receive more shares in the Company. This leaves Max in an even better position to fund its operations.

"We also wish to express our appreciation for Lee Kraus' contributions during his tenure on our Board and our enthusiasm for the contributions we anticipate from Malcolm Butler."

The following matters are being disclosed pursuant to Schedule 2(g) of the AIM Rules for Companies.

Dr Malcolm Butler (aged 64) is currently (or was in the last five years) a director or partner in the following companies and partnerships respectively:

Name Further Detail

Wessex Exploration plc

UK Onshore Geophysical Library

Geosolutions Limited

World Heritage Investments Limited

Brigantes Energy Limited

Corfe Energy Limited

EEE Mediation Limited

Waterloo Oil & Gas LLC (Delaware Partnership)

Sorrento Oil & Gas LLC (Texas Partnership)

PEOS AG (Swiss) Resigned 30/11/2010

eCORP Energy Limited (Irish) Resigned 30/3/2011

eCorp Europe International Limited Resigned 30/11/2010

eCorp Europe Holding Limited Resigned 30/11/2010

eCorp Oil & Gas UK Limited Resigned 30/11/2010

Portland Gas Limited Resigned 12/01/2011

Portland Gas Storage Limited Resigned 12/01/2011

Portland Gas Transportation Limited Resigned 12/01/2011

Geosolutions Exploration Limited Resigned 12/03/2009

There are no other disclosures required in accordance with Schedule 2(g) of the AIM Rules.