Final Results - Preliminary statement

Leed Petroleum PLC

("Leed" or the "Company")

Preliminary statement

for the year ended 30 June 2011

Leed Petroleum PLC (AIM:LDP), the natural resources focused investing company, is pleased to announce its Final Results for the year ended 30 June 2011.

Highlights

·; Disposal of US operating activities in May 2011.

·; Refinancing to raise raising some £2.435 million following a capital reconstruction.

·; Reclassification as an investing company under the AIM Rules.

·; Acquisition of a 17.5% interest in Manas Coal Limited Liability Company.

Enquiries:

Chairman's statement

Since the last results announcement, the affairs of Leed Petroleum have altered dramatically. As described at the interim stage, the oil and gas operations in Louisiana have been sold and US operating activities discontinued. Owing to the worsened position of these activities and the terms on which they could be disposed of, the Company was left in an insolvent position and, following their disposal, the then Directors were planning liquidation of the Company or the appointment of a receiver. Since then, as approved at a General Meeting on 22 June 2011, the Company has undergone a rescue refinancing raising some £2.435 million following a capital reconstruction and has become an investing company under the AIM Rules.

Since the announcement of the interim results, the entire board, with the exception of Ian Gibbs, has resigned, while giving their support to the reconstruction and refinancing, and I have become Chairman. The focus of the Company is now investment in resource projects, with a view in due course to the reversal of a sizeable resource project or business into the Company. We have made one such investment since the end of the financial year in a coking coal project in the Kyrgyz Republic, further details of which will be given below, and we are currently reviewing a number of other opportunities.

The reasons for the adverse production performance in the Company's oil operations and the failure to meet a principal payment of $12.0 million against its credit facility with UniCredit Bank AG were explained in the Company's last Interim Statement for the six months to 31 December 2010; I do not propose to repeat these reasons here. As the Company was unable to make a principal payment by the due date of 31 March 2011, UniCredit Bank AG decided to pursue a near term sale of the Company's oil and gas assets with the proceeds being applied against the Company's outstanding borrowings. This was reflected in the interim financial statements to 31 December 2010 which were prepared on a non going concern basis. On 18 April 2011 a trustee was appointed to dispose of the assets of Leed Petroleum LLC on behalf of the creditors, principally UniCredit Bank AG. On 23 May 2011, the Company announced that Leed Petroleum LLC had sold all its oil and gas assets to a private company for $16.0 million, constituting a sale of substantially all of the assets of the Company with all of the proceeds of the sale being used to satisfy debt owed to UniCredit Bank AG.

The restructuring and refinancing subsequently announced and approved involved the issue of £2,435,000 of zero coupon convertible loan notes, all of which were converted into new 0.1p shares following the approval of the proposals at a General Meeting on 22 June 2011, following which I joined the Board as Chairman.

The Company was then reclassified as an investing company under the AIM Rules with a focus on investment in companies operating in the natural resources sector, with an initial but not exclusive focus on oil and gas projects located in Africa. Since this date the new Board has since reviewed a number of such projects but, for a variety of reasons, has found them unsuitable.

Your new Board has therefore concluded that this focus was too narrow and that projects of the size and type that had been presented, being mainly at the exploration stage, represented a higher degree of risk and required a larger eventual capital outlay than in present market conditions the Board considered it prudent to commit to. It has therefore decided to extend its attention to mineral projects more generally where it was felt that the risks and potential capital cost were more in line with the Company's resources. Since this date the new Board has reviewed a number of such projects and has in fact made a first investment - in a coal development project in the Kyrgyz Republic.

In September 2011, the Company acquired a 17.5% interest in Manas Coal Limited Liability Company, incorporated in the Kyrgyz Republic, for a consideration of £750,000 plus a deferred consideration, subject to the satisfaction of certain conditions, of 166,666,667 new ordinary shares in Leed plus the same number of warrants at 0.15p; these conditions were recently satisfied and the additional consideration has consequently now been issued. Leed has the right to participate in future funding rounds and, in the event of an offer to purchase Manas, Leed has the right of first refusal itself to acquire the balance of Manas at a price not less than the highest price otherwise offered.

Manas is engaged in the exploration and development of coking coal resources in the Kyrgyz Republic and has a licence for geological exploration in the Eastern Kokkia area of the Kyrgyz Republic in a licence area where earlier Kyrgyz Government records show an estimated reserve of 114 million tons of high grade coking coal

The proceeds were for the purpose of procuring the transfer of the licence to Manas and commissioning a scoping report on the resource. This report is expected to be completed in the New Year and initial indications from some preliminary drilling work suggest encouraging results in terms of coal quality. This is a potentially high value coal project with great potential though much remains to be done in terms of proving the full extent of the resource and working through the logistics for its exploitation.

The new Board continues to review a range of projects in the energy sector and elsewhere in resources and is hopeful of investing in a further project in the near term with the expectation that such an investment may constitute or subsequently lead to a reverse takeover under the AIM Rules.

Overall, it has been a challenging year for the Company but the Board is confident that the change of direction will lead to enhanced value for shareholders.

It only remains for me to thank my fellow director and our team of advisers for their support and assistance and to express the hope the recovery in the Company's fortunes, albeit at an early stage as yet, will continue in the months and years to come.

Peter Redmond

Chairman

23 December 2011

Notes to the financial statements

1. General information

The financial information set out above does not constitute the company's statutory accounts for the years ended 30 June 2011 or 2010 but is derived from the 30 June 2011 statutory accounts. Statutory accounts for 2010 have been delivered to the registrar of companies and those for 2011 will be delivered in due course.  The auditor has reported on those accounts; its report was (i) unqualified, (ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying the report and (iii) did not contain a statement under section 498(2) or section 498(3) of the Companies Act 2006.

2. Operating segments

The chief operating decision maker has been identified as the Group's Board of Directors. The Board of Directors reviews the group's internal reporting in order to assess performance and allocate resources. The information provided to the chief operating decision maker is measured in a manner which is consistent with the financial statements and management has determined that until the disposal of its trading operations the Group had one operating segment (exploration and production) based on these reports and other factors. The exploration and production segment consisted of the acquisition, exploration, development, production and operation of oil and natural gas properties in the Gulf Coast region of the United States. The exploration and production segment derived all of its revenues from external customers. External customers exceeding 10% of total revenues, including the revenue shares of other participants, during the period ended 30 June 2011 included one oil purchaser ($10.9 million), one gas purchaser ($6.0 million) and the operator of the natural gas liquids processing plant ($3.9 million).

3. Discontinued operations

Effective as of 18 April 2011, the shares of the operating subsidiary, Leed Petroleum LLC ("Leed LLC") were transferred to a trust established for the benefit of Leed LLC's creditors, including UniCredit. The trustee of that trust subsequently sold all of the assets of Leed LLC for $16 million. All the proceeds of the sale were applied to the repayment of Leed LLC's bank borrowings, and subsequently on 22 June 2011 agreement was reached with Unicredit Bank AG, whereby for the payment of a fee of $70,000 the bank agreed to release Leed Petroleum plc and Leed Petroleum Inc from all guarantees given in respect of the loan facility to Leed LLC.

As Leed LLC was not under the control of the Group from 18 April 2011 it has been treated as a disposal on that date and is shown as a discontinued activity. The results from the discontinued activities and the loss on disposal are disclosed in note 5 Operating segments. The assets and liabilities of discontinued operations and the loss on disposal are summarised below:

The interim financial statements to 31 December 2010 were prepared on a non-going concern basis, which reflected the expectation of the directors at that time. The goodwill and property plant and equipment were impaired by $133.2m, down to their expected disposal proceeds. However, at the year end the group had returned to being a going concern and the assets have been included above at their carrying value before that impairment in order to show the overall loss on the disposal of the discontinued operations.

Cash flows from discontinued operations, which are included in the statement of cash flows, are summarised below:

4. Issued capital

A recap of issued capital follows:

On 22 June 2011 the shareholders approved a resolution to reorganise the issued share capital of the Company with the effect that for every ten existing ordinary shares of 5 pence each one new ordinary share of 0.1 pence each and one deferred share of 49.9 pence each were issued. The restricted rights attaching to the deferred shares are such that the deferred shares have no economic value.

Also on 22 June 2011 2,435,000,000 new shares of 0.1 pence each were issued at par on conversion of loan notes totalling £2,435,000.

5. Cash flows from operating activities

A summary of the components of cash flows generated from continuing operations follows:

6. Loss per Ordinary Share

A recap of loss per ordinary share and weighted average shares outstanding for the years ended 30 June 2011 and 2009, respectively, follows:

7. Post year end events

On 7 July 2011 the Company granted 75,078,062 options to Peter Redmond, a director of the Company, and 50,052,042 options to Bromius Capital Limited, a company of which Ian Gibbs, a director of the Company, is also a director and shareholder. The options granted are exercisable at 0.4p each on or before 28 June 2021. They will vest on the date that the Company completes its first transaction with a value of 20% or more of the Company's net assets and will be exercisable at any time within three years from that date.

On 12 September 2011 the Company acquired a 17.5% interest in Manas Coal Limited Liability Company ("Manas"). Manas is a company incorporated in the Kyrgyz Republic, the main activity of which is the exploration and development of coking coal resources and deposits within the Kyrgyz Republic.

The Company signed a Loan Agreement and an Implementation Agreement pursuant to which the Company has advanced a sum of £750,000 to Manas by means of a loan. The Company has also issued 166,666,667 ordinary shares to existing shareholders in Manas at a price of 0.15 pence per share, with an aggregate value of £250,000, together with 166,666,667 warrants to subscribe for new ordinary shares in the Company at a subscription price of 0.15 pence per share, in consideration for a 17.5% share in Manas, which is being acquired from certain existing shareholders in Manas.

The Company will have the right to participate in further fundraising rounds undertaken by Manas up to an agreed threshold amount and shall have the right to appoint a director to the board of Manas pursuant to the Implementation Agreement. The Implementation Agreement also contains certain provisions to protect the value of the Company's shareholding in future rounds of funding.

In the event that Manas receives an offer to purchase its legal and beneficial interests, whether by way of a stock exchange listing, a trade sale or otherwise, Leed shall have a right of first refusal to acquire Manas, its business or assets at a price not less than the highest price offered by any third party purchaser.

The proceeds of the loan from the Company are to be applied by Manas for the purposes of the transfer to Manas of a licence for geological exploration of coal at Eastern Kokkia area of Toguz-Toro district, Jalal-Abad region, Kyrgyz Republic and for the purposes of commissioning a scoping report on thereon.