PTR.L Regulatory News (PTR)

PetroNeft Resources plc ('PetroNeft' or 'the Company')

EGM Requisition and Publication of Circular

Board Recommends Shareholders to Vote AGAINST ALL Resolutions

As previously announced PetroNeft has received a notice requisitioning an Extraordinary General Meeting ("EGM") of the Company from Natlata Partners Limited ("Natlata"), a company registered under the laws of the British Virgin Islands. PetroNeft announces that it has posted a circular to its Shareholders to convene this EGM, which is to be held at 11.00 a.m. at the Herbert Park Hotel, Ballsbridge, Dublin 4, Ireland on Monday 18 April 2016. The circular contains details of the EGM Resolutions that are to be put to Shareholders and sets out the Board's response to the EGM Resolutions. For the second time in two years a single shareholder, Natlata, is seeking to replace a majority of the Board with their own nominees.

The EGM Resolutions which include Ordinary Resolutions relating to the appointment of three new directors (Anthony Sacca, David Sturt and Maxim Korobov) and for the removal of four current directors (Dennis Francis, David Sanders, Paul Dowling and David Golder).

Board recommendation

In the view of the Board:

· A single shareholder, Natlata has proposed the Ordinary Resolutions as a means by which it can seek control of the Board and therefore the Company without paying Shareholders a fair price for obtaining control of the Company.

· Natlata has provided insufficient disclosure regarding its plans and proposed strategy for the Company, including in relation to proposed funding, and key long term Executive management.

· The passing of the Natlata resolutions would cause material risks for PetroNeft and its Shareholders and in particular could lead to the:

o Loss of operatorship of Licence 61

o Loss of key funding to be made available by Oil India for the development of Licence 61 (a separate announcement is being made on this today)

o Loss of good corporate governance required of a company traded on UK and Irish public markets given the record of certain of Natlata's proposed Board members

o Loss of representation on the Board for the independent majority of Shareholders' interests

o Real risk that the Company's strategy will be changed or related party transactions may be undertaken that could be to the detriment of the independent majority of Shareholders

o Real risk that the new Board could seek to cancel the admission to trading of the Ordinary Shares contrary to the interests of the independent majority of Shareholders.

The Board believes that the EGM Resolutions are NOT in the best interests of the Company and Shareholders as a whole and is unanimously recommending that you vote AGAINST ALL of the EGM Resolutions.

Engagement with Natlata

PetroNeft has engaged extensively with Natlata in recent years. When the EGM requisition was received on 18 February 2015, the Company was at the final stage of appointing two independent non-executive directors in a process that had been discussed with Natlata.

Following receipt of the EGM requisition the Board put this decision on hold in order to enter new discussions with Mr. Korobov and Natlata to ascertain his current position which appeared to have changed markedly from earlier more constructive discussions.

Since the EGM proposal was made PetroNeft has met with representatives of Natlata on several occasions with a view to reaching an arrangement that is in the interests of PetroNeft and its Shareholders as a whole. To date a compromise has not been reached but the Board of PetroNeft remains open to continuing these discussions.

2016/2017 Work programme and budget agreed with Oil India

PetroNeft is today separately announcing that it has reached agreement with Oil India, its partner on License 61, for a budget and major work programme for 2016 and 2017.

The Board and Oil India believe that there is an attractive economic return for this development plan even in today's low oil price environment and it will position the Company to benefit materially from future increases in oil prices.

Natlata has not communicated or proposed any credible alternate strategy for the prioritised development and financing of Licence 61.

Circular availability

The circular is available on the Company's website at the following link: 

http://petroneft.com/investor-relations/investor-notices/ 

For further information, contact:

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