PCI.L Regulatory News (PCI)

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION.

THIS ANNOUNCEMENT IS NOT AN ANNOUNCEMENT OF A FIRM INTENTION TO MAKE AN OFFER UNDER RULE 2.5 OF THE IRISH TAKEOVER PANEL ACT, TAKEOVER RULES 2013 ("IRISH TAKEOVER RULES") AND THERE CAN BE NO CERTAINTY THAT AN OFFER WILL BE MADE, NOR AS TO THE TERMS ON WHICH ANY OFFER WILL BE MADE.

FOR IMMEDIATE RELEASE

Possible Offer for Petroceltic International plc ("Petroceltic", or the "Company")

Following recent press speculation, the Board of Petroceltic announces that it is in detailed discussions regarding a possible offer to be made by Dragon Oil plc ("Dragon Oil") for the issued, and to be issued, share capital of the Company (the "Possible Offer").

With the support of the Board and management team of Petroceltic, Dragon Oil has completed an extensive confirmatory due diligence exercise and has submitted to the Board of Petroceltic proposed offer terms of 230 pence sterling in cash per Petroceltic share.

The completion of any offer by Dragon Oil would be subject to customary conditions for an offer for an Irish public company, as well as appropriate approvals from the Algerian Government in relation to the Algerian assets of Petroceltic.

As the acquisition of Petroceltic would be a Class 1 transaction for Dragon Oil under both the Irish and UK Listing Rules, any offer would be subject to the approval of Dragon Oil shareholders. Towards that end, Dragon Oil is in discussions with its majority shareholder (who owns approximately 54 per cent. of the issued share capital of Dragon Oil) with a view to obtaining an irrevocable undertaking to vote in favour of a transaction. The Board of Petroceltic has informed Dragon Oil that, subject to consultation with Petroceltic's shareholders, it would be willing to recommend a firm offer at the level of the proposed offer if such an undertaking is obtained, and if the offer is made firm with conditions acceptable to Petroceltic.

There can be no certainty that any offer will be made or as to the terms of any offer. Shareholders are advised to take no action at this time.

Petroceltic shareholders will be kept informed of relevant developments and a further announcement will be made as appropriate.

This announcement has been made with the consent of Dragon Oil.

Enquiries:

Petroceltic International plc:

Tel: +353 (1) 421 8300

Brian O'Cathain

Tom Hickey

Bell Pottinger:

Joint PR Adviser to Petroceltic

Tel: +44 (0)20 7861 3919

Philip Dennis

Rollo Crichton-Stuart

Murray Consultants:

Joint PR Adviser to Petroceltic

Tel: +353 (1) 498 0300

Joe Heron

Douglas Keatinge

Bank of America Merrill Lynch:

Joint Financial Adviser and Joint Corporate Broker to Petroceltic

Tel: +44 (0)20 7628 1000

Ashwin Punde

Geoff Iles

Matthew Blawat

Davy Corporate Finance:

Joint Financial Adviser, Joint Corporate Broker, Nomad and ESM Adviser to Petroceltic

Tel: +353 (1) 679 6363

John Frain

Roland French

Merrill Lynch International ("Bank of America Merrill Lynch") is authorised in the United Kingdom by the Prudential Regulation Authority and regulated in the United Kingdom by the Financial Conduct Authority and the Prudential Regulation Authority and is acting exclusively for the Company and no one else in connection with the Possible Offer and will not regard any other person (whether or not a recipient of this announcement) as a client in relation to the Possible Offer and will not be responsible to anyone other than the Company for providing the protections afforded to clients of Bank of America Merrill Lynch or for providing advice in relation to the Possible Offer or any other matters referred to in this announcement.

Davy Corporate Finance is authorised and regulated in Ireland by the Central Bank of Ireland is acting exclusively for the Company and no one else in connection with the Possible Offer and will not regard any other person (whether or not a recipient of this announcement) as a client in relation to the Possible Offer and will not be responsible to anyone other than the Company for providing the protections afforded to clients of Davy Corporate Finance or for providing advice in relation to the Possible Offer or any other matters referred to in this announcement.

The Directors of Petroceltic accept responsibility for the information contained in this announcement. To the best of their knowledge and belief (having taken all reasonable care to ensure that such is the case), the information contained in this announcement is in accordance with the facts and does not omit anything likely to affect the import of such information.

This announcement is not intended to, and does not, constitute or form part of any offer, invitation or the solicitation of an offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of, any securities whether pursuant to this announcement or otherwise. The distribution of this announcement in jurisdictions outside Ireland or the United Kingdom may be restricted by law and therefore persons into whose possession this announcement comes should inform themselves about, and observe, such restrictions. Any failure to comply with the restrictions may constitute a violation of the securities law of any such jurisdiction.

DISCLOSURE REQUIREMENTS UNDER THE IRISH TAKEOVER RULES

Rule 2.10 disclosure

In accordance with Rule 2.10 of the Irish Takeover Rules, Petroceltic confirms that it has 213,718,250 Ordinary Shares of nominal value €0.3125 each in issue and admitted to trading on the ESM Market of the Irish Stock Exchange plc and the AIM Market of the London Stock Exchange plc. Petroceltic also confirms that it has 1,762,792 warrants ("Warrants") in issue, each such warrant entitling the holder to subscribe for one Ordinary Share in the Company at an exercise price of 140.25 to 206.00 pence. The Warrants, which are not listed or admitted to trading and which have limited transferability rights, have a subscription period up to 31 December 2015. In addition there are 13,836,591 options over Ordinary Shares outstanding under the Company's share option schemes. The ISIN code for Petroceltic Ordinary Shares is IE00BB0QZ876.

A person interested in 1% or more of any class of relevant securities of Petroceltic may have disclosure obligations under Rule 8.3 of the Irish Takeover Rules, effective from the date of this announcement.