Tern Regulatory News (TERN)

27 June 2012

Silvermere Energy PLC

("Silvermere" or "the Company")

Subscription

Silvermere, the independent oil and gas company focusing principally on exploration, appraisal and production opportunities in the US, is pleased to announce that the Company has conditionally raised £629,000 by way of a subscription for 7,862,500 new Ordinary Shares of 0.1p each ("Ordinary Shares") in the capital of the Company (the "Subscription") at 8p per share (the "Subscription Price") with certain existing and new institutional and other investors.

Use of Proceeds and Asset Valuation Details

The proceeds of the Subscription, which was oversubscribed, will be used to fund the remaining tie-in costs related to initial production at the I-1 well at the Company's Mustang Island 818-L Field ("Mustang Island"), for general working capital and for evaluating acquisition opportunities. Mustang Island is a field rehabilitation project and the Company expects first commercial sales from the I-1 well late August 2012.

The Company is currently evaluating the possible acquisition of an interest in an oil producing asset situated in New Mexico. The asset has current gross production of approximately 160 barrels of oil per day and approximately 170 existing well bores. An independent report commissioned by the Company in April 2012 attributes a value (NPV10) for the proven and probable ("2P") reserves relating to the interest the Company may acquire of US$18 million.

The Directors have also commissioned an independent report on Mustang Island, which is in draft form but which indicates a value (NPV10) of US$14.3 million for the 2P reserves attributable to the Company's interest and an additional US$56.4 million of possible reserves. A summary of Mustang Island's reserves and valuation as at 31 March 2012 from the draft independent report are set out below.

* Billions of standard cubic feet equivalent

** NPV10 is Net Present Value, as at 31 March 2012, using a discount rate of 10.0%, expressed in money-of-the-day

*** Not measureable

Directors' Dealings and Related Party Disclosures

Pursuant to the Subscription, Andy Morrison, Chief Executive, and Frank Moxon, non-executive Chairman, have agreed to subscribe for 625,000 (£50,000) and 587,500 (£47,000) Ordinary Shares respectively of which 1,087,500 (£87,000) in aggregate are in lieu of fees.

Under the AIM Rules their proposed participation in the Subscription is a related party transaction. Stewart Dalby, who is an independent director, has consulted with the Company's nominated adviser and considers their participation to be fair and reasonable insofar as Shareholders are concerned.

Following admission Andy Morrison will be beneficially interested in 942,520 Ordinary Shares representing 3.23% of the enlarged issued share capital of the Company and Frank Moxon will be beneficially interested in 757,725 Ordinary Shares representing 2.60% of the Enlarged Issued Share Capital of the Company. Stewart Dalby, a non-executive director of the Company will continue to be beneficially interested in 54,529 Ordinary Shares representing 0.19% of the Enlarged Issued Share Capital of the Company

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On 22 June 2012 Webb Capital Asset Management Limited ("Webb Capital") announced that it had taken over the management of two funds holding shares in Silvermere from T1ps Investment Management (IOM) Limited ("T1ps"). The SF Webb Capital Smaller Companies Growth Fund has agreed to participate in the Subscription in an amount of £70,000. Following the Subscription this fund will hold 3,732,429 Ordinary Shares representing 12.79% of the enlarged issued share capital of the Company.

In addition to participation in the Subscription by Webb Capital referred to above, Redmayne Nominees Limited has agreed to participate in the Subscription on behalf of a client who holds a significant shareholding interest in the Company. Following the Subscription this individual will hold 5,384,822 Ordinary Shares representing 18.45 per cent. of the Enlarged Issued Share Capital of the Company.

Owing to the size of the shareholdings of Webb Capital and of the client of Redmayne Nominees Limited their participation in the Subscription constitute related party transactions as defined by the AIM Rules. The directors of the Company, having consulted with the Company's nominated adviser, consider their participation in the Subscription to be fair and reasonable insofar as Shareholders are concerned.

Total Shares in Issue

The Subscription is conditional on admission of the new Ordinary Shares to AIM and an application has been made to the London Stock Exchange for the new Ordinary Shares to be issued pursuant to the Subscription, which will rank pari passu with the Company's existing issued Ordinary Shares, to be admitted to trading and dealings are expected to commence at 8:00 a.m. (BST) on 29 June 2012.

Following the above share issues, the total number of ordinary shares in issue will be 29,179,310. Shareholders may use this number when calculating their percentage holding in the Company.

Commenting on the Subscription, Chief Executive Andy Morrison said, "The Subscription represents an important declaration of intent by major shareholders and by the Board; an intent to see through the task of establishing production at Mustang Island and of using it as a spring-board for further development of the Company. It is a necessary and prudent action taken at this time to help ensure the future health and prosperity of the Company. I would like to express my thanks for the continuing support of the existing shareholders."

In accordance with the AIM Rules - Guidance for Mining and Oil & Gas Companies, Andy Kirchin, Vice President, Consulting at RPS Energy, qualifies as a Qualified Person for the purposes of this announcement, having approved the underlying subsurface-related technical information regarding to Mustang Island, as does Gordon Taylor, Director, Head of Sub-Surface at RPS Energy, who approved a recently updated report incorporating new estimates regarding well scheduling, costs and commodity prices.

-ENDS-

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 tree, 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.