Sirius Pet Regulatory News (SRSP)

28 June 2013

Sirius Petroleum PLC

("Sirius" or the "Company")

Final Results for the year ended 31 December 2012

Sirius Petroleum (AIM:SRSP), the oil and gas exploration and development company announces its final results for the year ended 31 December 2012.

Summary of 2012 and Current Year Update

·; During 2012 Sirius assessed a number of oil & gas assets for potential acquisition and this process is on-going.

·; The results for the year represent the costs of developing the Company's strategy and reviewing potential oil and gas blocks and individual marginal field opportunities. Net expenditure incurred in the year amounted to $3,867,000  (2011: $9,268,000) and loss per share of 0.47c (2011: 1.35c).

·; To date, Sirius has a 40% equity interest and Financial and Technical Services Agreement in place over the Ororo Field (OML 95) and also has exclusive options over equity interests in two further Nigerian Oil Prospecting Licences (the "First Oil Block" and the "Second Oil Block").

·; On 26 February 2013 shareholders approved the proposed issue of 900 million warrants which if issued in full will provide £60 million of funding to the Company.

·; On 3 May 2013 the Company announced it had entered into an Exclusivity Off-take Agreement with Glencore Energy UK Limited which includes the provision for a conditional pre-financing facility of up to $65 million.

Jack Pryde, Chairman, Sirius Petroleum, said: "Significant progress has been made during the last twelve months as we seek to build a portfolio of attractive oil & gas assets in line with our marginal field strategy. Significantly, we now have our funding resources in place and a partnership which is transformational for the Company. We look forward to working with the team at Glencore and our Nigerian partners as we move forward to fully develop these assets and bring further assets on board and into production."

Enquiries:

Chairman's Statement

I am pleased to report on the progress of Sirius covering the twelve month period to 31 December 2012. During this period Sirius has conducted a detailed assessment of a range of further potential oil and gas asset farm-in opportunities which resulted in the Group entering into a pre-farm-in agreement on one Nigerian Oil Block and a confidentiality and exclusivity agreement with regard to a second Nigerian Oil Block.

The management team has continued to undertake further analysis assessing the technical data on the fields in order to conclude the optimum financing of each project. In addition, the formative process of commissioning the Field Development Plan ('FDP') is nearing completion on the Ororo Field.

Well Re-entry Program - Ororo-1

The Group intends to focus its initial drilling activities on the re-entry of the Ororo-1 well located in the Ororo field (OML 95). The well produced circa 2,895 barrels of oil per day (bbls/day) of light crude oil (43 API) when originally tested by Chevron in 1986.

Sirius acquired rights to 40% of the Ororo field in 2011 and is entitled to a preferential cash flow of 88% while it is net invested in the project which is situated in shallow water offshore in depths ranging between 23 ft and 27 ft. The Ororo Field was discovered in 1986 with the drilling of the Ororo-1 well by Chevron and tested at approximately 2,200 barrels of crude oil per day (bopd) from a single zone, and 600 bopd from another oil-producing sand.

Finance

On 3 May 2013 Sirius announcedthat it has entered into an Exclusivity Off-take Agreement ("the Agreement") with Glencore Energy UK Limited ("Glencore") which includes commentary on the intention to provide a conditional pre-financing facility of up to $65 million, the repayment of which will be netted against the initial sales of crude oil production, for the development of the Group's near term production assets located off-shore Nigeria.

Under the terms of the agreement, Sirius has the right to deliver up to 60,000 barrels of crude oil per day (bopd) to Glencore and Glencore has exclusivity to market the crude oil on behalf of the Company for a period of 3 years. Sirius will be entitled to draw-down funds for the development of its oil assets after satisfactory approval from the technical team of Glencore, who will work together with Sirius to bring the fields into production in the near term.

Glencore was introduced to Sirius by Amazoil (Nig) Limited ("Amazoil") which has an impressive on-the-ground presence in Nigeria and itself works closely with a number of international oil companies and trading houses to help achieve their strategic objectives in West Africa. Amazoil, together with Strand Hanson Limited, will continue to advise the Company on its on-going operational programme and strategic objectives in Nigeria.

On 26 February 2013 shareholders approved the Group's proposal to issue 900 million warrants in respect of the provision of the above funding agreement which, if exercised in full, will provide an additional £60m of funding to the Group.

The Group anticipates that full exercise of the warrants, together with the opportunity to drawdown the pre-financing facility, will provide sufficient funding to maximise production of its existing assets and to acquire further assets with near-term production opportunities.

On 30 April 2013 the Company signed a convertible loan facility with Calvet International Limited which provides up to £1.5 million ($2.4 million) of funding for general working capital. On the basis that this facility is drawn in full, the cash flow projections indicate that the Group has sufficient headroom to meet its working capital requirements.

Drawn funds from the convertible loan facility shall become due and repayable in full on 30 September 2018 or after 30 September 2014 within 20 days from the receipt of written notice from the Lender to the Borrower requesting repayment. Alternatively, can be convertible into ordinary shares of 0.25p at a conversion price of 4p each at the lender's discretion

Results

The results represent the costs of developing our strategy and reviewing interests in both potential oil and gas blocks and individual marginal field opportunities. Total comprehensive loss for the year amounted to $3,867,000 (2011: $9,268,000) reflecting a rigorous control over central costs and a reduction in share based payment charges giving a loss per share of 0.47c (2011 loss per share: 1.35c).

During the period the Company issued a total of 62,678,571 new ordinary shares of 0.25p each.

Since the end of the period, Sirius has issued a further 857,143 new ordinary shares of 0.25p each, in settlement of outstanding professional and other fees, and now has 817,762,044 shares in issue. Sirius does not hold any shares in treasury and hence the total number of voting rights in the Company is 817,762,044 and this figure may be used by shareholders 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 Company under the Financial Conduct Authority's Disclosure and Transparency Rules.

Loss of Capital

The financial statements show that the Company's net assets are less than half its called up share capital. In these circumstances, the directors of the Company are obliged by section 656 of the Companies Act 2006 to convene a general meeting for the purposes of considering whether any and if so what, steps should be taken to deal with the Company's current financial position. The Directors will consider this issue at the Company's forthcoming annual general meeting. 

Outlook

Sirius has most recently embarked upon the formative stage of a field development plan in order to commence work on our first production asset. We look forward to working with our partners in Nigeria and the team at Glencore as we move into the next stage of developing a portfolio of assets and taking the first of these into near term production. We can now look forward to bringing news of further progress to shareholders in due course.

Annual general meeting

The AGM will be held at 11.00 a.m. on 25 July 2013 at the offices of Fladgate LLP, 16 Great Queen Street WC2B 5DG.

Finally, I would like to thank our shareholders for their continuing support as we continue to develop the business.

Jack Pryde

Chairman

28 June 2013

SIRIUS PETROLEUM PLC

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2012

SIRIUS PETROLEUM PLC

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2012

SIRIUS PETROLEUM PLC

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2012

SIRIUS PETROLEUM PLC

CONSOLIDATED STATEMENT OF CASH FLOW

FOR THE YEAR ENDED 31 DECEMBER 2012

\* The cashflow statement for the year ending 31 December 2011 has been restated to classify loans made gross of repayments as investing activities and not financing activities. This has had the impact of loans made of $3,333k and repayments of $1,787k being shown in investing activities in the year ended 31 December 2011.

Basis of Preparation

The group financial statements have been prepared under the historical cost convention and in accordance with International Financial Reporting Standards as adopted by the European Union (IFRS). The Company's ordinary shares are quoted on AIM, a market operated by the London Stock Exchange.

The principal accounting policies of the Group, which have been applied consistently, are set out in the annual report and financial statements.

GOING CONCERN

The Chairman's statement makes reference to some significant opportunities facing the Group in respect of the Ororo field. These activities are expected to be funded by Glencore Energy UK Limited. The Glencore Off-Take Agreement was signed on 30 April 2013 and includes detail on the intention to provide up to a $65 million pre-payment facility. In return Glencore has the right to up to 60,000 barrels of crude oil per day for a period of 3 years from the loading of the first cargo or the date on which the pre-payment facility is discharged in full at prices based on Brent net FOB. The directors are confident that satisfactory approval from the Glencore Energy UK Limited technical team will be forthcoming and that they will be able to draw down on the pre-financing facility of $65 million in the near future. However, at the date of this report there is no absolute certainty that the appropriate technical due diligence reports will be received and that the Glencore funding will be received. These activities have therefore been excluded from the projections prepared by the Directors as part of their assessment of going concern.

The directors have instead prepared steady state cash flow projections through to 30 June 2014. These projections only take account of the on-going management costs of the Group, the costs of investigating the various acquisition opportunities available to the Group as detailed in the Chairman's statement and the clearance of all payables outstanding at the date of this report. The payment of accrued directors' remuneration and directors' remuneration payable in respect of the current year has been excluded as the directors have agreed to defer payment until such time as funds are available. The projections also do not assume any oil extraction or income from oil trading nor do they assume any acquisitions take place or that any additional assessment of the prospective resources is undertaken over and above that authorised as at the date of this report. 

On 30 April 2013 the Company signed a convertible loan facility with Calvet International Limited which provides up to £1.5 million ($2.4 million) of funding for general working capital. On the basis that this facility is drawn in full, the cash flow projections indicate that the Group has sufficient headroom to meet its working capital requirements.

On the basis of the assumptions above and following a detailed review by the directors of the Group's cash flow forecast, the directors believe that the Group has sufficient cash resources to meet its liabilities as they fall due for a period of at least 12 months from the date that the financial statements are signed. Consequently, the financial statements have been prepared on a going concern basis.

SIRIUS PETROLEUM PLC

NOTES TO THE ACCOUNTS

FOR THE PERIOD ENDED 31 DECEMBER 2012

1. SEGMENTAL INFORMATION

An operating segment is a distinguishable component of the Group that engages in business activities from which it may earn revenues and incur expenses, whose operating results are regularly reviewed by the Group's chief operating decision maker to make decisions about the allocation of resources and assessment of performance and about which discrete financial information is available.

The chief operating decision maker has defined that the Group's only reportable operating segment during the year is oil extraction and related activities.

The Group has not traded and has not generated any revenue from external customers during the period.

In respect of non-current assets $3,000 (2011: $5,000) arise in the UK and $1,643,000 (2011: $1,008,000) arise in Nigeria.

2. LOSS PER SHARE

There are 76,000,000 share options and 90,000,000 warrants outstanding. Their effect is anti-dilutive, but are potentially dilutive against future profits.

3. SHARE CAPITAL

The movement in share capital is analysed as follows:

On 17 February 2012 60,000,000 ordinary shares of 0.25p were issued at par on the exercise of warrants issued in 2011.

On 13 September 2012 2,678,571 ordinary shares of 0.25p were issued at 2.8p in settlement of consultancy fees at fair value.

The ordinary shares carry one vote each and on winding up of the Company the balance of assets available for distribution will, subject to any relevant restrictions, be divided amongst the members.

4. publication of non-statutory accounts

The financial information set out in this preliminary announcement does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006.

The consolidated statement of financial position at 31 December 2012, the consolidated statement of comprehensive income, consolidated statement of changes in equity, consolidated statement of cash flows and associated notes for the year then ended have been extracted from the Group's 2012 financial statements upon which the auditor's opinion is unqualified and does not include any statement under Section 498 of the Companies Act 2006.

The accounts for the year ended 31 December 2012 will be posted to shareholders shortly and laid before the Company at the Annual General Meeting which will be held on 25 July 2013 at 11.00 a.m. at the offices of Fladgate LLP, 16 Great Queen Street, London, WC2B 5DG. Copies will also be available on the Company's website (www.siriuspetroleum.com) in accordance with AIM Rule 26.