UK Oil & Gas Regulatory News (UKOG)

16 December 2013

UK Oil & Gas Investments Plc

("UKOG" or the "Company")

£1.04 million funding

UK Oil & Gas Investments Plc (AIM: UKOG) announces a conditional funding of £1.04 million comprised of a £540,000 placing at 0.8 pence per share and has entered into a £500,000 Placing and an Equity Swap Agreement with YA Global Master SPV, Ltd. ("YAGM") at 0.8 pence per share. YAGM has agreed with the Company that they will not dispose of any shares acquired under their agreement for an initial 2 month period.

David Lenigas, the Company's Chairman, commented:

"This funding will be used to strengthen the Company's balance sheet and be used towards potential farm-ins and investments within the UK conventional oil and gas sector, and in accordance with the Company's stated investment strategy."

Placing:

The Company has raised £540,000 before expenses, by way of a placing ("the First Placing Shares") of 67,500,000 new ordinary shares ("Placing Shares") at a placing price of 0.8 pence per share.

Placing and Equity Swap:

YAGM have subscribed for a total of 62,500,000 new ordinary shares (the "Second Placing Shares") in the Company at a price of 0.8p per share ("Placing Price") for a gross consideration of £500,000. Of this amount, £250,000 will be paid back by UKOG to YAGM under the Equity Swap Agreement from which UKOG is expected to receive subject to adjustment a base amount of £20,833 per month for a 12 month period. The final amount of these monthly funds received by the Company under the Equity Swap Agreement will be dependent on the future price performance of the Company's ordinary shares, as set out below.

Equity Swap Agreement:

The Company and YAGM have entered into an equity swap agreement ("the Equity Swap Agreement") pursuant to which the Company will pay YAGM £250,000. In consideration for this payment, the Company will receive twelve monthly payments of £20,833, amounting to £250,000 in aggregate, between the date of admission of the Placing Shares to trading on AIM and 31 January 2015. The monthly payments can be adjusted either:

· up, if 90% of the lowest 10 day VWAP during the relevant one month period is greater than 0.88p, being a 10% premium to the Placing Price; or

· down, if 90% of the lowest 10 day VWAP during the relevant one month period is lower than or equal to 0.88p. This would result in the Company receiving less funds from YAGM in any relevant one month period.

Thus the funds received by the Company in respect of the Swap Shares will be dependent on the future price performance of the Company's ordinary shares.

YAGM may elect to terminate the Equity Swap Agreement and accelerate the payments due under it in certain circumstances.

YAGM has agreed that it and its affiliates will refrain from holding any net short position in respect of the Company's ordinary until the expiry or, if earlier, termination of the Equity Swap Agreement.

The issue of the First Placing Shares and Second Placing Shares and entry into the Equity Swap Agreement are conditional on admission of the all the Placing Shares to trading on AIM ("Admission"). It is expected that Admission will occur and that trading in the new ordinary shares will commence on AIM at 8.00 am on Monday 23 December 2013. These Placing Shares will rank pari passu in all respects with the Company's existing issued ordinary shares.

Total Voting Rights:

The Company therefore has 807,396,843 Ordinary Shares (comprising 807,378,453 New "A" Ordinary Shares and 18,390 New "B" Ordinary Shares) in issue with voting rights and admitted to trading on AIM. This figure may be used by shareholders in the Company as the denominator for the calculation by which they will determine if they are required to notify their interest in, or a change to their interest in, the share capital of the Company under the Financial Conduct Authority's Disclosure and Transparency Rules.

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