PGR.L Regulatory News (PGR)

29 September 2017

Phoenix Global Resources plc

("Phoenix", the "Company" or, together with its subsidiaries, the "Group")

TRADING AND OPERATIONS UPDATE

Phoenix Global Resources plc (AIM: PGR; BCBA: PGR), the independent Argentina-focused oil and gas exploration and production company, provides an update on recent corporate and operational activities. This update should be read in conjunction with the financial reports for the six months ended 30 June 2017 of Andes Energia Plc ("Andes") and Trefoil Holdings B.V. ("Trefoil"), both published separately today.

Corporate Highlights

· Phoenix was formed on 10 August 2017 through the combination of Andes with Trefoil

· The enlarged Group was renamed Phoenix Global Resources plc, and a new Board was put in place at completion with Sir Michael Rake as Chairman and four independent non-executive Directors

· Phoenix is now an Argentina-focused oil and gas company with established conventional onshore production and significant exposure to the world class Vaca Muerta shale play

Operational Highlights

· Combined¹ average production of 11,537 working interest boepd over the first six months of 2017 (10,571 boepd in Argentina)

· Realised average oil prices in Argentina of US$50.32 per bbl

· Realised average gas prices in Argentina of US$3.87 per mmbtu

· The Group continued its appraisal work on the Vaca Muerta shale formation in the Puesto Rojas block and made an application to the Province of Mendoza for an unconventional exploitation concession for the area

· Three wells were drilled during the H1 2017 period in the Puesto Rojas block, two of which reached Vaca Muerta in addition to the conventional horizons

· During the period, one conventional well (CP1014 ST) was completed in the Puesto Rojas area with initial production from the Chachao formation of 785 bpd (30-day average) on a working interest basis

· Following the period end, five further wells were drilled in the Puesto Rojas area, three of which have appraised unconventional potential in the Vaca Muerta

· The Company recompleted a well at Cerro Del Medio which was previously producing 40 bopd and is producing post recompletion more than 300 bopd, which provides good initial indications of expanding our existing Agrio play with significant development potential, including with horizontal wells, in this prolific horizon.

· 41 development wells drilled on the Chachahuén licence, in partnership with YPF, all successfully brought into production

· Combined¹ average total production in Argentina has increased to 11,591 working interest boepd as of September

· On 26 September, the Argentina Government announced it will suspend price controls on domestic crude oil effective 1 October 2017

Financial Highlights

· Combined¹ revenues of US$88.0 million in H1 2017 compared to US$102.4 million in H1 2016.

o The decrease in revenue in H1 2017 as compared to H1 2016 is primarily driven by lower realised prices in the period as the Government continued to allow the domestic regulated price to move toward parity with international benchmark prices

o Gas prices increased compared to H1 2016, offsetting the decrease in oil revenues, albeit on modest gas volumes

o Sales volumes were also lower compared to H1 2016 as the development and production programme for Puesto Rojas was rephased to the second half of the year while the Group focused on Vaca Muerta appraisal in the first half

· Combined¹ adjusted EBITDA² of US$15.6 million in H1 2017 compared to US$34.8 million in H1 2016

· Combined¹ net debt of US$93.3 million at 30 June 2017

· At 29 September 2017, the enlarged Group's net debt position was approximately US$132.4 million based on: (i) the drawdown of US$87 million of a new US$160 million bridging and working capital facility from Mercuria Energy Trading S.A. that was used to repay all outstanding Andes debt; (ii) a further drawdown of US$45 million of the remaining US$73 million under the bridging and working capital facility to make working capital payments and fund operations; and (iii) other bank debt in Argentina and unrestricted cash balances.

Outlook

· The Group continues to evaluate its planned exploration and appraisal programme related to the Vaca Muerta shale and other formations for unconventional and conventional development

· The Group will make further updates in Q4 2017 as the technical evaluation and administrative processes progress

¹ Combined figures represent the simple aggregation of reported amounts for Phoenix Global Resources plc and Trefoil Holdings B.V. unless described otherwise, and are unaudited

² EBITDA is adjusted to exclude the impact of the US$13.6 million gain recognised by Phoenix Global Resources plc on the deconsolidation of Interoil Exploration ASA and to also exclude the combined net impairment loss of US$8.3 million related to the relinquishment of the Puesto Pozo Cercado licence. This adjusted EBITDA includes a provision of US$2.8 million for a doubtful corporate receivable.

Anuj Sharma, CEO, commented:

"I am very proud to be providing our first operational and financial update for Phoenix since our successful combination in August of this year. We have been busy with continued appraisal activity in Vaca Muerta, and finalisation of our drilling programme and the development plan for our assets.

We continue to work on the integration process and expect to complete much of this in 2017. The hard work and dedication of our people has been critical, and, on behalf of the Board, I would like to thank everyone who has helped us reach this point.

We know Argentina well and are excited to see increasing political stability in the country translating into a positive economic environment with debt yields reducing and the relaxation of currency controls. Taken together, these positive developments increase the attractiveness of Argentina for investment both locally and internationally.

In the oil market specifically, the recent suspension of price controls shows increasing confidence in the energy sector overall. Argentina is blessed with significant natural resouces and, in particular, the world class Vaca Muerta shale formation, which is the only shale formation outside North America that is consistently producing economically successful wells, producing in excess of 67,000 boepd. Vaca Muerta has been the subject of significant activity by YPF for a number of years and increasing interest and involvement from other domestic exploration players as well as a number of significant IOCs and international independents.

Phoenix has a long track record in Argentina, operating in an environmentally responsible manner and to the highest industry standards. The Group has accumulated significant working interest acreage - much of which has exposure to the Vaca Muerta formation. Our initial appraisal work on Vaca Muerta has been undertaken in the Group's Puesto Rojas licence area in the Malargüe region of the Mendoza province. Following the encouraging results of the initial appraisal work, the Company has applied to the Province for an unconventional exploitation licence for the area. We are awaiting the finalisation of the Province of Mendoza's unconventional oil & gas regulations and their decision on our application before we proceed further with our appraisal and development programme.

Vaca Muerta and other unconventional development represents significant growth potential for Phoenix, and, together with the Board, I look forward to providing further updates on our progress as both the operational and administrative activity related to our exploration and appraisal work continues."

For further information, please contact:

Qualified Person Review

In accordance with AIM guidance for mining, oil and gas companies, Mr. Javier Vallesi and Mr. Greg Easley have reviewed the information contained in this announcement. Mr. Vallesi, Chief Operating Officer of the Group, is a petroleum engineer with over 22 years of experience in the oil and gas industry and is a member of the Argentinian Institute of Oil and Gas. Mr. Easley, Senior Manager Reservoir and Engineering, is a petroleum engineer with over 10 years of experience in the oil and gas industry, is a licenced Professional Engineer in the State of Texas and is a member of the Society of Petroleum Engineers.

About Phoenix:

Phoenix Global Resources is a London Stock Exchange (AIM: PGR) and Buenos Aires Stock Exchange (BCBA: PGR) listed independent Argentina focused oil and gas exploration and production company. The Company has over 6.3 million licensed working interest acres in Argentina (of which over 5 million are operated), 61.7 million boe of working interest 2P reserves and average production of approximately 11,300 working interest boepd in 2016. Phoenix has significant exposure to the unconventional opportunity in Argentina through its 400,000 working interest acres with Vaca Muerta potential.

The Company's website is www.phoenixglobalresources.com