Sirius Pet Regulatory News (SRSP)

1 May 2015

Sirius Petroleum Plc.

("Sirius" or the "Company")

Corporate Strategy Update

Sirius Petroleum (AIM:SRSP), the investing Company focussed on oil and gas development and production opportunities in Nigeria, updates its shareholders having reviewed its strategy with regard to its pipeline of assets and funding for the Ororo Field.

Ororo Field located in OML 95

In light of the current share price and economic climate, the Directors have reviewed the potential dilution to shareholders in raising USD $25m through a combination of new equity and a convertible loan structure to fund the Ororo-2 well. The Sirius Board has concluded that whilst the Ororo Field remains profitable at the current oil price, if the funds needed were raised directly by Sirius Petroleum Plc (as originally announced on 18 Dec 2014) there would be significant dilution of existing shareholders interests and this would not be in the best interests of the Company's existing shareholders. On a fully diluted basis, the existing shareholders would own only a small minority of the Company's enlarged equity post investment.

Consequently the Directors of Sirius, in conjunction with Nima International Limited ("Nima"), an affiliate company of Levant Energy Limited, have agreed to consider alternative funding structures for the Ororo Field. These include Nima providing funding to Sirius Ororo ("OML 95") Limited, a wholly owned subsidiary of Sirius ("Sirius Ororo Ltd.") which directly owns OML 95, or obtaining funding at the project level. The Directors are also considering a range of alternative structures including debt structures, which are less dilutive than the proposal previously considered.

Consequently, Nima and Sirius have mutually agreed not to extend the previously announced Long Stop date of 30 April 2015, whilst they review these options. The Board is hopeful of a successful outcome although there can be no guarantee.

Other Opportunities

In addition, Sirius has been in discussions with regards to participation in a significant oil block located in the shallow waters of the Niger Delta Basin on Nigeria's continental shelf and is reviewing the data and geological reports and commencing full technical due diligence. The Company is in discussions with two African-centric parties with regards to a farm-in arrangement to develop the asset. This asset has significant 2P reserves and existing wells have been drilled. Any agreements in respect of this potential opportunity remain subject to due diligence and therefore may not proceed.

Issue of shares and warrants in settlement of fees

Sirius and Juniper Capital Partners Ltd ("Juniper"), a strategic and financial adviser to the Company, entered into a Deed of Amendment on 23 April 2015 in relation to an agreement dated 17 April 2014, under which the Company has agreed to issue to Juniper 20,000,000 new ordinary shares in settlement of fees to 31 December 2015 and 10,000,000 warrants over new ordinary shares with an exercise price of 2.0p per share (which represents a 100% premium to the mid-market price of 1.0p per Sirius ordinary share at the close of business on 30 April 2015). The warrants vest immediately and are exercisable at any time until the fifth anniversary of the date of grant being 1 May 2020. In addition, the Company has agreed to issue a further 15,000,000 new ordinary shares in the Company in settlement of £150,000 of fees relating to a working capital loan agreement entered into. 

Application for admission to trading on AIM of the 35,000,000 new ordinary Shares ("New Ordinary Shares") will be made and is expected to occur on or around 8 May 2015. The New Ordinary Shares will represent approximately 3.1 per cent. of the Company's existing issued share capital which currently comprises 1,142,625,356 ordinary shares. The New Ordinary Shares will rank equally in all respects with the Company's existing ordinary shares. Following this issue the total number of ordinary shares in issue will be 1,177,625,356. This number may be used by shareholders as the denominator for the calculation by which they will determine if they are required to notify their interest in, or a change in their interest in, the share capital of the Company.

Commenting, Bobo Kuti, CEO said "Both the Ororo Field and other potential assets are key development targets for the Company. In the current climate, management believes that any decision on funding the Group going forward should be done by seeking to minimise dilution for existing shareholders to the extent possible and thereby maximise shareholder value from our pipeline of assets, with the intention of delivering them to production."

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