ROSE.L Regulatory News (ROSE)

Rose Petroleum plc ("Rose", the "Company" or the "Group")

Fundraising of £3.1m by way of a conditional placing and subscription

Development economic update

Notice of General Meeting

TVR

Rose Petroleum plc, the AIM-listed (Ticker: ROSE) natural resources company, is pleased to announce its intention to raise £3.1m by way of a conditional placing and subscription.

Summary of the Placing

· The Company proposes to raise £3.1m (before expenses) by way of a conditional placing by Allenby Capital Limited ("Allenby Capital") and a subscription of, in aggregate, 1,040,000,007 new ordinary shares of 0.1 pence each ("Ordinary Shares") (the "Placing Shares") at a price of 0.3 pence per share (the "Placing")

· The net proceeds of the Placing will be used to provide funds to develop the Company's assets in eastern Utah and to meet general Group overheads

· The Placing Shares have been conditionally placed with institutional and other investors

· Subject to approval by shareholders of the authority to allot shares (the "Resolution") at a General Meeting to be held at 10am on 16 June 2015 at the offices of Allenby Capital Limited, 3 St Helen's Place, London EC3A 6AB (the "GM") and, amongst other things, to admission of the shares to be issued under the Placing to trading on AIM ("Admission"). A notice of GM and circular will be posted to shareholders in the coming days

For further information, please contact:

Placing and subscription of 1,040,000,007 new Ordinary Shares at 0.3 pence (the "Placing Price") per new Ordinary Share

1. Introduction

The Company proposes to raise £3.1 million (before expenses) through the issue of 1,040,000,007 new Ordinary Shares at 0.3 pence per share. The Placing Price represents a discount of approximately 14.3 per cent. to the closing bid-price of 0.35 pence per Ordinary Share on 19 May 2015, being the last dealing day immediately prior to the release of this announcement. The Placing price was determined by a book-building process carried out by Allenby Capital and having considered the price at which the Ordinary Shares are currently traded, and other market factors, the directors of Rose (the "Directors") have resolved that the Placing Price is appropriate. The Placing Shares will represent approximately 41 per cent. of the Company's share capital as enlarged by the Placing ("Enlarged Share Capital").

Pursuant to the terms of a placing agreement, Allenby Capital, as agent for the Company, has agreed to use its reasonable endeavours to procure subscribers for the Placing Shares at the Placing Price. The Placing Agreement is conditional, inter alia, upon the passing of the Resolutions at the GM and Admission becoming effective on or before 8.00 a.m. on 17 June 2015. The Placing Agreement contains provisions entitling Allenby Capital to terminate the Placing Agreement at any time prior to Admission in certain circumstances. If this right is exercised the Placing will not proceed. The Placing has not been underwritten by Allenby Capital.

2. Background to and reasons for the Placing

The Directors believe that there is currently an opportunity to raise funds from a small number of institutional and other investors rather than by offering all Shareholders the opportunity to acquire further shares and that this opportunity may not be present in the near future given the current uncertain market conditions. The Directors believe that the additional cost and delay incurred in connection with any such offer would not have been in the best interests of the Company.

The Directors are proposing the Placing to provide funds to develop the Company's Mancos and Paradox assets in Eastern Utah, USA and to meet general Group overheads.

The Directors believe that the Placing will give the Company sufficient working capital to pursue the planned exploration programme for at least the next six months. However, exploration costs are difficult to predict and if they prove to be higher than anticipated, or in the event of unforeseen circumstances, further capital may be required.

The Directors consider the net proceeds of the Placing are essential in order for the Company to continue with its planned exploration programme.

3. Core results and prospects

Core results

The Company has announced the results of its core analysis by way of a separate announcement earlier today.

Prospects

Subject to the successful completion of the Placing and Admission, the Company anticipates announcing the following developments over the next six months:

· results of the Mancos 1-34 well core analysis;

· Cisco Dome work over/production programme results;

· permitting of the six Mancos well locations;

· potential Ryder Scott reserve report update;

· production updates from mining operations;

· drill permits progress;

4. Development economics update

Mancos

Based on the production profile and OPEX model for other existing Mancos producing wells in the area, and given the CAPEX requirements of a major development programme, the Directors believe that a breakeven price of US$17/BOE from the Mancos is realistic and achievable.

At a price of US$55/BO and US$3.00/MCFG, and based on a US$140m equity investment, the Company estimates the following project economics for the Mancos:

· NPV10: US$477m

· ROR: 44%

· cash flow positive in 2018

The Directors also consider that the robust economics of the Mancos acreage would result in strong economics for the planned single pilot well with individual production facility costs. At a price of US$60/BO and US$3.50/MCFG, the Company estimates the following 'single well' economics:

· pilot well CAPEX: US$3.5m

· wellhead NPV10: US$1.6m

· 20 year gross EUR(BOE):226,000 bbls

· pilot wellhead breakeven: US$30/boe

Paradox

At a price of US$55/BO and US$3.00/MCFG the Company estimates the following economics:

· NPV10:US$765Million

· ROR:52%

· project payout - 5.5years.

5. Admission and dealings

Application will be made to the London Stock Exchange for the Placing Shares to be admitted to trading on AIM. It is expected that, subject to approval at the GM, Admission will become effective and that dealings in the Placing Shares on AIM will commence on 17 June 2015.

The Placing Shares will rank pari passu in all respects with the existing Ordinary Shares, including the right to receive all dividends and other distributions declared following Admission.

6. Total voting rights

The Company announces that following Admission its issued share capital will consists of 2,550,185,127 ordinary shares of 0.1p each with one voting right per share. The Company does not hold any shares in treasury. Therefore the total number of Ordinary Shares and voting rights will therefore be 2,550,185,127.

The above figure may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the share capital of the Company under the FCA's Disclosure and Transparency Rules.

7. Recommendation

The Directors consider that the Placing is in the best interests of the Company and its shareholders as a whole. Accordingly, the Directors unanimously recommend that shareholders vote in favour of the Resolutions to be proposed at the GM, as they have intend to do in respect of their aggregate interests of 43,279,614 Ordinary Shares (representing approximately 2.87 per cent. of the Company's current issued Ordinary Shares).

8. Shareholder circular

The circular due to be sent out to Shareholders shortly contains the Notice of GM at which the Resolutions will be proposed for the purposes of implementing the Placing.

Copies of the circular will be available, free of charge, at the registered office of the Company and the offices of Allenby Capital Limited, 3 St Helen's Place, London EC3A 6AB during usual business hours on any weekday (Saturdays, Sundays and public holidays excepted) for one month from the date of this document. This document will also be available on the Company's website, www.rosepetroleum.com.