MXP.L Regulatory News (MXP)

FOR IMMEDIATE RELEASE

9 February 2015

 Max Petroleum Plc

("Max Petroleum" or the "Company" and

together with its subsidiaries, the "Group")

Recent material fall in oil price means Group will be insolvent without debt restructuring and additional financing

Subscription by AGR Energy will not proceed

Discussions with AGR Energy continue with respect to an investment in the Group

Negotiations continue with Sberbank to restructure the debt facility

The fall in the oil price since November 2014 has had a very severe adverse impact on the Company's current and forecast liquidity position in 2015 and beyond. As a result, Max Petroleum's business has been rendered unviable unless further material investment is made into the Company in addition to there being a comprehensive debt restructuring agreed with Sberbank. Negotiations with Sberbank regarding the terms of such debt restructuring have so far not been successful.

While, as a result of the above, the Subscription by AGR Energy will not proceed, Max Petroleum continues negotiations with Sberbank regarding an appropriate debt restructuring and with AGR Energy regarding an equity investment that, together with the debt restructuring, would render the Company viable at current oil prices (being some 50% below their level when the AGR Energy Subscription was proposed in August 2014 and 30% lower than when shareholders approved the Subscription in December 2014).

The Directors of Max Petroleum currently believe that there is a reasonable prospect that ongoing discussions could result in a sufficient refinancing of the Company and, on that basis, have not put the Company into administration. However, there is only a short period remaining to achieve such a refinancing and if current efforts are unsuccessful then the consequences will be negative for all stakeholders in the Company.

A further announcement will be made in due course.

Background Information

On 1 December 2014, Max Petroleum announced that it had obtained shareholder approval for the £37.1 million cash subscription by AGR Energy Limited No. I ("AGR Energy") (the "Subscription"), such that AGR Energy would hold 51% of the Enlarged Issued Share Capital immediately following completion of the Subscription. AGR Energy is a vehicle owned by the Assaubayev family established for the purpose of the Subscription.

In its circular to shareholders dated 12 November 2014 (the "Circular") the Company stated:

"Assuming both that Brent crude oil prices remain at or below current levels and that the Group's capital programme remains suspended, the Group's current cash flow forecasts (using a nominal US$85/bbl Brent crude oil price) indicate that the Group will not be able to continue servicing its interest and principal payments under the Sberbank Facility Agreement as they fall due, starting with the US$3.2 million principal payment due in December 2014. The Directors have entered into discussions with Sberbank with a view to seeking to agree, as soon as possible, a moratorium on principal payments, including the US$3.2 million principal payment due in December 2014, and the restructuring of the Sberbank Facility Agreement.

Even if Sberbank and the Company agree a moratorium on principal payments under the Sberbank Facility Agreement, any further significant delays or underperformance of production or revenue targets or timing would require the Group to obtain additional debt or equity capital to continue in operation."

ENQUIRIES:

Save where the context requires otherwise, capitalised and technical terms used in this announcement shall have the same meaning as ascribed to them in the Company's circular to shareholders dated 12 November 2014.