Tern Regulatory News (TERN)

AIM: SLME

3 December 2012

Silvermere Energy plc

("Silvermere" or the "Company")

Silvermere secures £5 million Equity Facility with Yorkville Advisors

Silvermere, the independent oil and gas company with assets in the Gulf of Mexico, announces that it has entered into a Standby Equity Distribution Agreement ("SEDA") with YA Global Master SPV Ltd ("Yorkville"), an investment fund managed by Yorkville Advisors Global, LP, for a £5 million equity facility. The Company intends to use funding from the SEDA judiciously and prudently to assist in its future working capital requirements such as the further development of the Mustang Island 818-L field and/or growth through future acquisitions.

Under the terms of the SEDA, Silvermere may draw down funds periodically, at its sole discretion, over a period of up to three years in exchange for the issue of new shares in the Company. Subject to any minimum price specified by Silvermere in advance, shares sold under the SEDA will be priced at 95 per cent. of the prevailing market price calculated in accordance with the SEDA during a 10-day pricing period beginning on the first trading day after the date of the relevant advance notice. Unless otherwise agreed, each advance may not exceed £2.5 million, 200 per cent. of the average daily value traded of Silvermere's ordinary shares for the five trading days immediately prior to the date of the advance notice or result in Yorkville holding more than 2.99 per cent. of Silvermere's outstanding ordinary shares.

Yorkville will receive an aggregate implementation fee of £75,000 payable in ordinary shares or cash for the provision of the first £2.5 million tranche of this SEDA facility, which is payable once aggregate draw-downs, have reached at least £150,000. A further £75,000 fee will be payable in ordinary shares or cash for the provision of the second tranche if the first tranche is fully utilised.

Andy Morrison, Silvermere's Chief Executive Officer, commented:

"The SEDA facility is an enabling action that will help to ensure that we have access to future development funding that will put the Company in a stronger position to take advantage of organic and inorganic growth opportunities by giving it access to a wider range of funding sources. We are very pleased to have the independent financial capacity that Yorkville can provide at this pivotal time in our corporate development."

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About Silvermere Energy PLC

The Company has a 33.33 per cent working interest and 20.00 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 (the "Field"), located in Kleberg County waters of the Gulf of Mexico, is home to a field re-habilitation project targeting bypassed or only partially produced gas-condensate.

According to a recent update to the independent Competent Persons Report published at admission in August 2011, the Mustang asset, operated by Dominion Production Company, has an NPV10 of Proven and Probable reserves (P1 + P2) estimated to be US$14 million attributable to the Company's interest. It has an additional NPV10 of US$57million net from the potential upgrade of Possible (3P) reserves. These reserves are based on a projected three well programme.

Initially, Silvermere is focussed on progressing production from the I-1 re-entry well where it has a 16.66 per cent working interest with a view to underpinning its long-term objective of creating a bankable and cash generative oil and gas company during the medium term and then drilling the three new wells to access the NPV identified in the CPR.

The Company maintains an active business development programme which aims to identify and acquire additional valuable assets either in or near production. These will be used to expand the business and provide additional value to shareholders over time. The Company's search is focused on the US for the time being, both on-shore and off-shore, but may be expanded further afield in the future.

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