Sale of Secured Bonds and Covenants Update

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION.

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION

3 November 2016

IGas Energy plc (AIM: IGAS)

("IGas" or the "Company")

Sale of Secured Bonds and Covenants Update

IGas announced in a statement, on 26th October, that it expected a breach of its daily liquidity covenant in the week commencing 31st October 2016. Today, IGas announces that, following a sale of secured bonds with a total nominal value of US$8.0 million at a price of 75% to par, realising cash proceeds of US$6.0 million. As a result, the Company no longer expects a breach of its daily liquidity covenant in 2016. 

The Company now forecasts that it will be compliant with its daily liquidity covenant until March 2017, when the next amortisation and interest payment is due in respect of the secured bonds, in addition to continuing to meet its ordinary course financing and trading obligations. The cash proceeds realised from the sale of the secured bonds are available for general corporate purposes. The transaction, which exchanged and completed today, was effected in the market through an intermediary.

As previously announced, the Company's current forecasts also project non-compliance with its leverage covenants as at 31 December 2016. In the event of a breach of either leverage covenant, an equity cure provision exists within the bond agreements, such that a breach can be cured within 25 business days of the delivery of the compliance certificate for that period. For the period ending 31 December 2016, the compliance certificate must be delivered by 30 April 2017, and accordingly the latest date for any equity cure would be early June 2017.

The board continues its discussions with key stakeholders concurrent with a number of strategic investors, as it continues to assess options that would result in a capital structure for the group that is sustainable in the current oil price environment and enable the Company to capitalise on value accretive opportunities.

Further updates will be made as and when appropriate.

For further information please contact:

IGas Energy plc

Tel: +44 (0)20 7993 9899

Stephen Bowler, Chief Executive Officer

Julian Tedder, Chief Financial Officer

Ann-marie Wilkinson, Director of Corporate Affairs

Investec Bank plc (NOMAD and Joint Corporate Broker)

Tel: +44 (0)20 7597 4000

Sara Hale/Jeremy Ellis/George Price

Canaccord Genuity (Joint Corporate Broker)

Tel: +44 (0)20 7523 8000

Henry Fitzgerald-O'Connor

Vigo Communications

Tel: +44 (0)20 7830 9700

Patrick d'Ancona/Chris McMahon

Disclaimers

This announcement is not intended to and does not constitute or form part of any offer to sell or subscribe for or any invitation to purchase or subscribe for any securities or the solicitation of any vote or approval in any jurisdiction.

The release, publication or distribution of this announcement in, into or from jurisdictions other than the United Kingdom may be restricted by law or regulation and therefore any persons who are subject to the laws or regulations of any jurisdiction other than the United Kingdom should inform themselves about, and observe, any applicable requirements.

There are matters set out within this announcement that are forward-looking statements. Such statements are only predictions, and actual events or results may differ materially. For a discussion of important factors which could cause actual results to differ from forward-looking statements, refer to the Company's Annual Report and Accounts for the nine months to 31 December 2015. The Company does not undertake any obligation to update publicly, or revise, forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent legally required.