Execution of Convertible Loan

18 December 2014

Sirius Petroleum Plc

("Sirius" or the "Company")

Execution of Convertible Loan Instrument for £9,600,000

Sirius Petroleum (AIM:SRSP) the investing company focused on oil and gas exploration and development opportunities in Nigeria, is pleased to announce that it has entered into an Agreement to Subscribe for Loan Notes and a definitive Convertible Loan Note Instrument for £9,600,000 (the "Loan") with Nima International Limited, an affiliate company of Levant Energy Limited ("Levant" or "Lender").

The completion of the drawdown of the Loan ("Completion") is subject inter alia to (i) the Company and Levant executing the necessary Security Documents, being debentures and cross guarantees to provide the lender with fixed and qualifying floating charges over the assets and rights of the Borrower and its subsidiaries, and (ii) there being a subscription or placing of new Ordinary Shares raising not less than £9,375,000. Drawdown of the Loan can occur at any time, once these conditions are satisfied, but no later than 16 February 2015 unless by agreement with the Lender.

The Company is working closely with Levant to complete the Security Documents. Whilst the Loan Agreement has been executed, as Completion did not occur prior to midnight on the 17 December 2014, the conditional placing and subscription to raise £9,375,000 as announced on the 25 November 2014 has lapsed.

A number of subscribers, which represented over 70% of the total conditional subscription and placing, have indicated that they will increase their subscription, if required, and make not less than £9,375,000 available to the Company prior to Completion, being the amount required to satisfy the condition of the Loan. This is subject to the execution of legally binding agreements and until such time, there is no certainty this amount of equity will be subscribed for. 

The Convertible Loan Notes have a one year term and the Company has agreed a conversion price of 3 pence per share with an annual interest rate of 15 per cent. The Lender has the option to convert the Loan in part or in full, including any interest, at any time during the period of the Loan into new ordinary shares of the Company. Whilst the Directors are confident of the Completion of the Loan, there can be no guarantee of this.

At the end of the one year term, the Company shall repay the Lender the principal amount of the convertible notes which have not been converted into ordinary shares. The Company expects to be able to repay the principal amount through cash flows from the Ororo field. If cash flow is insufficient, the Company will need to access alternative forms of funding.

Commenting, Bobo Kuti, CEO, said "I am delighted that we have executed the Loan Agreement with Levant and am pleased that our shareholders continue to show strong support to the Company, in order to get our funding closed."

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