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20 December 2017

Savannah Petroleum PLC

("Savannah" or the "Company")

Update on Placing and Seven Energy Transaction

Further to its announcement of 14 December 2017, Savannah is today providing an update on its proposed placing with institutional investors (the "Placing") to fund, inter alia, the revised cash consideration portion of the Agreed Transaction.

Update Regarding the Agreed Transaction

As previously announced:

· in respect of the lock-up agreement entered into by Savannah, the Seven Group and certain of the creditors of the Seven Group (the "Lock-up Agreement"), as at the expiry of the lock-up fee deadline, at 5 p.m. (London time) on 12 December 2017, SEFL had received executed lock-up agreements from 90.13 per cent. of the holders of Seven's current 10.25 per cent. Senior Secured Notes (the "SSNs"), by value, in support of the Agreed Transaction and the associated proposed financial restructuring of the Seven Group, as announced on 15 November 2017; and

· Seven has notified the Nigerian DPR of the Agreed Transaction and has received a "Letter of Authorisation to Proceed" with the same. The letter welcomes Savannah's proposed investment in Nigeria, and paves the way for Seven to submit a formal application for Ministerial consent to effect the Agreed Transaction, which is expected to be made after the execution of the binding implementation agreement relating to the Agreed Transaction.

Following the significant support received from holders of the SSNs and the positive correspondence received from the DPR, further discussions have taken place with key stakeholders including certain holders of the SSNs.

As a result of this, it is now proposed that:

· Savannah intends to raise up to US$125 million through the Placing;

· consideration of US$42.5 million in cash (previously US$87.5 million) and US$109.5 million in new Ordinary Shares (previously US$52.5 million) will now be paid to the holders of the SSNs (the "Consideration Shares");

· the lender of the second bilateral facility will receive consideration of US$3.5 million in cash (previously US$7.3 million) and US$9.2 million in new Ordinary Shares (the "Second Bilateral Facility Shares") (previously US$4.4 million); and

· the US$20m new capital contribution from the SSNs will be exchanged for a new US$26.7m Savannah share issuance (previously US$25m).

Unless otherwise defined, capitalised terms in this announcement have the same meaning ascribed to them in the Company's announcement on 14 December 2017.

Update on the Placing

The Company confirms that it now intends to raise up to US$125 million through a placing with new and existing institutional investors and other investors (the "Placees").

The use of proceeds for the Placing remains as previously described by Savannah, as adjusted for:

· The additional share consideration to be paid to holders of the SSNs and Seven's second bilateral facility (reducing cash requirements by cUS$50m);

· Changes to the proposed Niger work programme, including the removal of the acquisition of 3D seismic and a reduction in the number of wells to be drilled in 2018 from five to three; and

· Working capital optimisation.

Savannah confirms that there is not expected to be any impact on its previously announced dividend plans, the expected CPR asset cash flow generation profile following completion of the Agreed Transaction or the Enlarged Group's planned H1 2018 activities.

As previously announced, it is expected that the new Ordinary Shares to be issued to the Placees pursuant to the Placing (the "Placing Shares") will be issued in two tranches. The Company expects to use its existing share issuance authority obtained at its annual general meeting earlier this year to issue the first tranche of the Placing Shares (the "First Tranche"). The issue of the second tranche of the Placing Shares (the "Second Tranche") will be conditional, inter alia, on the passing of certain resolutions at a general meeting of the Company to be convened (the "General Meeting") and the issue of the Consideration Shares. 

It is now expected that the price per Placing Share will be 35 pence (the "Placing Price"), with Placees also being entitled to receiving 0.5 unlisted, non-tradeable warrants over each Placing Share subscribed for, exercisable over a 12 month period from completion of the Second Tranche at the Placing Price (the "Warrants"). The Warrants that are attributable to the Placing Shares to be issued as part of the First Tranche will not be granted until completion of the Second Tranche, and as such are conditional upon, amongst other things, the passing of the necessary shareholder resolutions at the Revised General Meeting. Such Warrants may therefore not be granted, notwithstanding that the First Tranche Placing Shares would have been issued.

Based on the anticipated Placing Price, Savannah's implied market capitalisation upon readmission to trading following completion of the Agreed Transaction, after the issue of the Placing Shares, the Consideration Shares and the issue of the Second Bilateral Facility Shares, would be approximately £313m.

Further Information on the Placing and Bookbuild

The Bookbuild will continue today, and it is the Company's intention that its Placing Proof Admission Document, which is being updated to reflect the revised transaction structure, will be distributed to investors on or around 21 December 2017, with publication of the final AIM Admission Document expected to follow shortly thereafter. An update on timing around the Company's restoration to trading on AIM will be provided in due course.

The Placing Shares, when issued, will be fully paid and will rank pari passu in all respects with the existing Ordinary Shares, the Consideration Shares and the Second Bilateral Facility Shares, when issued. The timing of the closing of the Bookbuild and allocations are at the discretion of Barclays Bank PLC (the "Global Co-ordinator"), Mirabaud Securities Limited (together with the Global Co-Ordinator, the "Joint Bookrunners") and Shore Capital Stockbrokers Limited (the "Lead Manager" and, together with the Joint Bookrunners, the "Managers") and the Company. The final Placing Price and details of the results of the Placing will be announced as soon as practicable after the close of the Bookbuild.

The information contained within this announcement is considered to be inside information prior to its release, as defined in Article 7 of the Market Abuse Regulation No. 596/2014, and is disclosed in accordance with the Company's obligations under Article 17 of those Regulations.

This press release is for informational purposes only and shall does not constitute or form part of any prospectus, offer or invitation to sell or issue or any solicitation of any offer to purchase or subscribe for any securities the United States or in any other jurisdiction, nor shall it (or any part of it), or the fact of its distribution, form the basis of, or be relied upon in connection with, or act as any inducement to enter into, any contract or commitment whatsoever relating to any securities.

Neither this announcement nor any copy of it may be made or transmitted into the United States of America, or distributed, directly or indirectly, in the United States of America. Neither this announcement nor any copy of it may be taken or transmitted directly or indirectly into Australia, Canada or Japan or to any persons in any of those jurisdictions, except in compliance with applicable securities laws. Any failure to comply with this restriction may constitute a violation of United States, Australian, Canadian or Japanese securities laws. The distribution of this announcement in other jurisdictions may be restricted by law and persons into whose possession this announcement comes should inform themselves about, and observe, any such restrictions. This announcement does not constitute, or form part of, an offer to sell, or a solicitation of an offer to purchase, any securities in the United States of America, Australia, Canada or Japan or in any jurisdiction in which such offer or solicitation is unlawful.

The securities have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"), or with any securities regulatory authority of any state or other jurisdiction of the United States. The securities may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. There will be no public offer of the securities in the United States. The securities referred to herein have not been registered under the applicable securities laws of, Canada, Australia or Japan or and, subject to certain exceptions, may not be offered or sold within Canada, Australia or Japan or to any national, resident or citizen of Canada, Australia or Japan.

Recipients of this press release who intend to purchase or subscribe for shares in Savannah Petroleum plc following publication of the final admission document are reminded that any such purchase or subscription must only be made solely on the basis of the information contained in the final admission document relating to Savannah Petroleum plc.

Barclays Bank PLC, which is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority in the United Kingdom, is acting exclusively for the Company and no one else in connection with the Placing and will not regard any other person (whether or not a recipient of this document) as a client in relation to the Placing and will not be responsible to anyone other than the Company for providing the protections afforded to its clients nor for giving advice in relation to the Placing or any transaction, arrangement or matter referred to in this document.

In connection with the Placing, Barclays Bank PLC and any of its affiliates, acting as investors for their own accounts, may subscribe for or purchase Ordinary Shares and in that capacity may retain, purchase, sell, offer to sell or otherwise deal for their own accounts in such Ordinary Shares and other securities of the Company or related investments in connection with the Placing or otherwise. Accordingly, references in the final admission document, once published, to the Ordinary Shares being issued, offered, subscribed, acquired, placed or otherwise dealt in should be read as including any issue or offer to, or subscription, acquisition, placing or dealing by Barclays Bank PLC, or any of its affiliates, acting as investors for their own accounts. In addition, Barclays Bank PLC may enter into financing arrangements with investors, such as share swap arrangements or lending arrangements where Ordinary Shares are used as collateral, that could result in Barclays Bank PLC acquiring shareholdings in the Company. Barclays Bank PLC does not intend to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligations to do so.

Forward-looking statements

This announcement contains statements that constitute forward-looking statements, beliefs or opinions, including statements relating to business, financial condition and results of operations of Savannah. These statements may be identified by words such as "expectation", "believe", "estimate", "plan", "target", "intend," "may," "will," "should" or "forecast" and similar expressions or the negative thereof; or by the forward-looking nature of discussions of strategy, plans or intentions; or by their context. All statements regarding the future involve known and unknown risks and uncertainties and various factors could cause actual future results, performance or events to differ materially from those described or implied in these statements. Such forward-looking statements are based on numerous assumptions regarding Savannah's present and future business strategies as well as the environment in which Savannah expects to operate in the future. Further, certain forward-looking statements are based upon assumptions of future events which may not prove to be accurate and Savannah does not accept any responsibility for the accuracy of the opinions expressed in this announcement or the underlying assumptions. Past performance is not an indication of future results and past performance should not be taken as a representation that trends or activities underlying past performance will continue in the future. The forward-looking statements in this announcement speak only as at the date of this announcement and Savannah and its affiliates expressly disclaim any obligation or undertaking to review or release any updates or revisions to these forward-looking statements to reflect any change in Savannah's expectations with regard thereto or any change in events, conditions or circumstances on which any statement is based after the date of this announcement or to update or to keep current any other information contained in this announcement or to provide any additional information in relation to such forward-looking statements, unless required to do so by applicable law.