Basic Energy Settlement

21 June 2012

FORUM ENERGY plc

("Forum Energy" or the "Company")

Basic Energy Settlement

Forum Energy, the UK incorporated oil and gas exploration and production company with a focus on the Philippines, announces that it has agreed a settlement agreement (the "Compromise Agreement") with Basic Energy Corporation ("Basic Energy") today in relation to certain assets in the NW Palawan area, offshore Philippines, which were acquired from Basic Energy in a Sale and Purchase Agreement dated April 3, 2006 (the "SPA").

The Company had previously signed a conditional settlement agreement with Basic Energy last year, as announced on 10 May 2011, which would have concluded the arbitration process in relation to these assets, provided the conditions therein were met. However, as announced on 21 February 2012, that settlement agreement was not completed because not all required third party consents were obtained within the agreed timeframe. Consequently, the process reverted into arbitration.

On 11 June 2012, the Arbitral Tribunal rendered a decision in the arbitration proceedings (the "Award"). The dispositive portion of the Award reads as follows:

"WHEREFORE, premises considered, the Tribunal hereby renders judgment:

1. (a) Holding Claimant's (Basic Energy's) 75% share and Respondent's (Forum Energy's) 25% share in the distribution of the utilization of HCR (Historical Cost Recovery) Accounts of BPMI (Basic Petroleum and Minerals Inc.) in SC 14 A and B (Nido/Matinloc) should be computed without deduction for FEPC's (Forum Energy Philippines Corporation) current operating or other expenses, such that for every US$1.00, US$0.75 will be due to Claimant (Basic Energy) and US$0.25 will be due to Respondent (Forum Energy) until the amount of US$10,000,000.00 would have been fully paid.

(b) Ordering Respondent (Forum Energy) to pay Claimant (Basic Energy) any amount now still unpaid in consonance with the foregoing computation, with legal interest of 12% per annum if unsettled within thirty days from receipt of this Decision.

2. Directing the Parties to exert best efforts to have a nominee of Claimant (Basic Energy) elected to the Board of Directors of Respondent (Forum Energy) until the amount of US$10,000,000.00 has been fully paid.

3. Denying the claim of exemplary damages, attorney's fees and arbitration costs, each party being adjudged to bear its own costs and expense.

SO ORDERED."

Of the amount of US$10 million, approximately US$7.6 million has already been paid by Forum Energy.

Immediately following the tribunal's decision, the parties agreed to continue with ongoing negotiations to settle all the disputes arising from the SPA, which has resulted in the Compromise Agreement. The key terms of the Compromise Agreement are set out below.

Under the Compromise Agreement, Forum Energy shall pay Basic Energy:

1) upon execution of the Compromise Agreement, the amount of US$ 2.4 million, which is the remaining balance of the US$ 10 million stipulated in Article 2.2 of the SPA, representing Basic Energy's share in utilization of the historical cost recoveries of Basic Petroleum and Minerals, Inc. (now Forum Energy Philippines Corporation) relating to the oil assets indicated in the SPA (the "Balance Payment"); and

2) the amount of US$ 2 million to settle any and all issues between the parties in respect of Article 2.3 of the SPA, in relation to payments due upon achieving certain production volumes, to be paid as follows: US$1 million within six months, and US$1 million within eighteen months, from date of the execution of the Compromise Agreement.

As a result of Forum Energy agreeing to pay the Balance Payment, Basic Energy agrees not to nominate a representative to the Company's board.

This new settlement does not require the conveyance of 50% of Forum Energy Philippine Corporation's participating interests in the Galoc, Nido, Matinloc, and North Matinloc (as had been the case for the Company's previous settlement agreement as announced on 10 May 2011). No third party consents are required for purposes of the Compromise Agreement.

Following the payment of the initial US$ 2.4 million to Basic Energy, the Company has approximately US$ 7 million in working capital including undrawn amounts available under the Philex facility arrangement.

For further information please contact:

Forum Energy Plc

Andrew Mullins, Tel: +44 (0) 1932 445 344

Executive Director

Company Secretary

Execution Noble & Company Ltd (Nominated Adviser & Broker)

Harry Stockdale Tel: +44 (0) 207 456 9191

Or visit the Company's website:

www.forumenergy.com