Tern Regulatory News (TERN)

21 February 2012

Silvermere Energy plc

("Silvermere" or the "Company")

Warrant Exercise, Option Grant and Directors' Dealings

Silvermere, the independent oil and gas company focusing principally on exploration, appraisal and production opportunities in the US, is pleased to confirm the issue of new ordinary shares as set out below.

Warrant Exercise

The Company announces that, following an exercise of warrants, it has issued, conditional on admission, 126,741 ordinary shares of 0.1p each in the capital of the Company ("Ordinary Shares").

Option Grant

On 20 February 2012, the Company granted options over 400,000 Ordinary Shares to Andy Morrison, chief executive of Silvermere at a price of 25 pence per Ordinary Share. The options will be exercisable for a period of three years after vesting on the first anniversary of their grant.

The exercise price for the options represents a premium of approximately 32.5 per cent to the Company's mid-market share price of 18.875p at close of business on 20 February 2011. No further performance criteria are applied to the award.

The grant of this option to Mr Morrison meets HMRC qualifying requirements for Enterprise Management Incentives (EMIs) and as far as practicable reflects the terms of the Company's Share Option Scheme (Part A) as summarised in Section 13 of the Admission Document dated 2 August 2011. The Company intends to notify HMRC of the grant within the prescribed time limit. EMIs are designed to help small, higher risk companies recruit and retain employees who have the skills to help them grow and succeed.

Directors' Dealings

In accordance with the terms of his engagement, 15,894 new shares, worth £3,000 have been allotted to Stewart Dalby, a non-executive director of the Company, as salary at a subscription price of 18.875p per share, this being the mid-market closing price on the specified date of 20 February 2012. Following the issue, Mr Dalby holds a total of 30,529 Ordinary Shares in the Company, representing approximately 0.15 per cent of the Company's issued share capital.

Andy Morrison, chief executive officer of Silvermere, has also agreed to reinvest £20,000 of salary due to him on the same terms as Mr Dalby. Accordingly, a further 105,960 shares in the Company have been allotted to Mr Morrison. These shares will be held by Mr Morrison in his SIPP. Following this purchase Mr Morrison's total interest in the Company amounts to 317,520 Ordinary Shares, representing approximately 1.5 per cent of the Company's issued share capital.

Frank Moxon, chairman of Silvermere, has also agreed to reinvest £4,950 of salary due to him on the same terms as Mr Dalby and Mr Morrison. Accordingly, a further 26,225 shares have been allotted to Mr Moxon. Following this purchase Mr Moxon's total interest in the Company amounts to 170,225 Ordinary Shares, representing approximately 0.8 per cent of the Company's issued share capital.

The Director holding percentages given above reflect the Company's issued share capital as enlarged by the placing and warrant exercises detailed herein.

All shares in the Company held by its directors are subject to a lock-in agreement under which they may not be sold or transferred before 31st August 2012 and are subject to orderly market requirements for a further twelve months thereafter.

Total Shares in Issue

Following the above share issues, the total number of Ordinary Shares in issue will be 20,772,046. Shareholders may use this number when calculating their percentage holding in the Company.

Application is being made for the 274,820 Ordinary Shares to be admitted to trading on AIM and dealings are expected to commence on 27 February 2012.

--ENDS--

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About Silvermere Energy PLC

The Company acquired its interest in the Mustang Asset on 30 August 2011. This comprises a 33.33 per cent. working interest and 20.83 per cent. net entitlement interest in the Mustang Licence Area, an area within the southern half of the north west quarter and northern half of the south west quarter of the Block 818-L field as defined in State of Texas Oil and Gas Lease numbers 108873 and 108874. The Mustang Island 818-L field, located in Kleberg County waters of the Gulf of Mexico, is a field re-habilitation project targeting bypassed or only partially produced gas-condensate.

Early in 2011 the Hercules Offshore 205 jack-up rig was contracted to re-enter the I-1 Well on the Mustang Licence Area which was considered to be the most likely of the historic well sites to provide 14 optimum re-entry conditions. The I-1Well re-entry and side-tracking operation was completed in March 2011 leaving it ready to complete in sand horizons I-1 to I-6. Production and flow testing was carried out during June 2011. The well re-entry programme was led by Dominion as the operator. Gas and oil produced from the I-1Well is proposed to be connected to pipeline infrastructure and tied in via a subsea assembly, constructed for the purpose and then transported to the Six Pigs gas facility.

Silvermere's strategy is to acquire a portfolio of US oil and gas licence interests onshore and in shallow offshore waters, characterised by relatively low risk and low cost with the potential for near term production.

Silvermere is quoted on the AIM Market of the London Stock Exchange plc (AIM: SLME) with its offices in London.