ZOE.L Regulatory News (ZOE)

30 August 2017

Highlands Natural Resources plc ('Highlands' or 'the Company')

Drilling Completed at First East Denver Well

Highlands, the London-listed natural resources company, is pleased to announce that it successfully reached Total Depth ("TD") of 18,230 ft on the Powell 5-64 15-16-1CHZ ("Powell") well at the East Denver Niobrara Project in Colorado ("East Denver") on 27 August. The Company finished setting and cementing casing in the well on 29 August.

Oil and gas is present in the well's drill bit cuttings and drilling mud from the Niobrara formation (referred to as positive "shows" of oil and gas). Mud logging reports provided by independent contractors describe "abundant oil in samples." 100% of the lateral portion of the wellbore was successfully landed in the Niobrara formation.

Highlands' Chairman and CEO Robert Price said, "Today is an important milestone for the East Denver operation, as we have successfully drilled our first well in the project to the planned TD, and initial analyses of the reservoir are positive. Equally important, we have so far delivered operations on-schedule with respect to initial plans outlined by the Company. I attribute our progress to the excellent teamwork achieved by our Joint Technical Team partnership with our investors as well as the collaboration of our highly valued contractors and consultants.

"I am pleased to report that initial indications point to an oil-saturated and gassy shale reservoir, and wellbore data shows that we successfully placed the entirety of our lateral wellbore in the Niobrara formation as initially planned. Our next steps, now underway, are to prepare the rig for its walk back to the Wildhorse well, walk the rig over a period of about one day, then complete drilling operations at the Wildhorse well."

Summary and Next Steps

The Powell well was spud on 14 August; drilling operations lasted approximately fourteen days, and casing operations lasted approximately two days, which is in line with the company's initial expectation of operations lasting approximately two weeks. The Powell well was landed successfully in the Niobrara formation, and 100% of the 9,803-foot lateral portion of the wellbore is in the Niobrara reservoir according to mud logs (a highly positive result).

After casing and cementing the Powell well, the rig's next operation is to walk back to the Wildhorse 5-64 15-16-1BHZ ("Wildhorse") well to drill and case the remainder of that well. The remaining drilling operations for Wildhorse will last approximately two weeks from the time they are commenced.

Highlands will post photos of the East Denver operation, including aerial drone media, to www.highlandsnr.com in due course.

Following drilling operations, the Company will commence completion operations (also called hydraulic fracturing or "fracking"), which will last several weeks from the time of commencement. Following the completions phase, the Company will begin the flow-back process and production process, resulting in definitive oil and gas production results, which the Company will release to the market.

THIS RELEASE CONTAINS INSIDE INFORMATION.

**ENDS**

For further information, please visit www.highlandsnr.com, or contact:

Notes to Editors

Highlands (LSE: HNR.L) is a London-listed natural resources company with a portfolio of high-potential oil, gas and helium assets and technologies. The company's core projects include:

· East Denver Niobrara: a farm-in opportunity for horizontal oil and gas wells targeting the Niobrara shale formation in a well-studied area of the Denver Julesburg Basin.

· DT Ultravert: a re-fracking and parent well protection technology with one patent granted and additional patents pending in the United States and internationally. Highlands is advancing commercial conversations with a range of oil and gas operators to create revenue-sharing opportunities for DT Ultravert applications.

· Helios Two: a 105,000+ acre helium and natural gas prospect in SE Montana with drilling and assessment operations ongoing.