Interim Results

3Legs Resources plc

Interim Results

for the six months ended 30 June 2013

3Legs Resources plc (the "Company" and, together with its subsidiaries, the "Group"), an independent oil and gas group focusing on the exploration and development of unconventional oil and gas resources, is pleased to announce its Interim Results for the six months ended 30 June 2013.

Corporate and operational highlights

Primary focus on Baltic Basin

· We have continued to focus our efforts, with ConocoPhillips, on our three western Baltic Basin concessions, which we believe represent some of the most prospective shale acreage in Poland.

· In order to reduce our expenditure elsewhere, we have allowed our southern Poland concessions to lapse, and we are in active discussions with potential partners in relation to our eastern Baltic Basin and southern German concessions.

Lebien LE-2H lateral well

· The well commenced a natural flow test on 21 July 2013, flowing natural gas at a rate initially of 470 mscf/d, similar to when the second phase of testing was suspended; as at 11 September the well was flowing at approximately 230 mscf/d.

· Valuable downhole pressure data are being collected, together with pressurised samples of the produced fluids; these data have not, to our knowledge, been gathered from any previous testing in the Baltic Basin and are expected to assist in improving productivity in future wells.

Strzeszewo LE-1 vertical well

· Flow testing in the Cambrian Alum (or Piasnica) zone commenced on 4 August 2013 using a nitrogen lift; after being temporarily shut in on 16 August, the well flowed natural gas and a flare was lit for a short period.

· Flow testing was concluded on 7 September 2013 and a pressure build-up test is now being conducted.

· Preparations are continuing for a second test programme in the well, expected in Q4 2013, in the Ordovician O3 (or Sasino) shale, our primary target.

Core and log analysis

· Conclusions to date from this ongoing analysis significantly improve our understanding of the two target formations, including reservoir properties and materiality.

· Further analysis of cores and logs from the Warblino LE-1H lateral well, drilled in 2011, now indicates that this well tested the Ordovician O1 (or Sluchowo) shale, instead of the Cambrian Alum shale as originally intended.

2013/14 drilling programme

· Preparations for the 2013/2014 drilling programme are continuing; a contract has been signed with United Oilfield Services which provides for the drilling of two firm wells with the option to drill up to two additional wells and/or lateral sections.

· Well locations within our high-graded area are being finalised and construction is under way.

· We have commenced discussions with ConocoPhillips regarding the 2014 work programme and budget.

Financial highlights

· We continue to enjoy a strong funding position, with cash of £36.0 million at period end, compared with £39.5 million at the beginning of the period; investments in our oil and gas assets increased by £3.7 million over the period, to £21.4 million.

· We recorded a loss before exchange rate movements of £1.5 million for the six months ended 30 June 2013, as compared to a loss of £1.3 million for the same period in 2012.

· As a result of organisational changes which have been implemented, with effect from 1 July 2013 we are targeting a reduction in cash administrative expenses, before foreign exchange movements, of approximately 50% as compared with the previous financial year.

Kamlesh Parmar, Chief Executive Officer, commented:

"Our strategy to refocus the Group more clearly towards our western Baltic Basin concessions, and to reduce our commitments elsewhere, is delivering results. Working closely with ConocoPhillips, we continue to progress our understanding of these concessions, through further drilling and testing activity in our high-graded area. The data gathered from our most recent testing of the Ordovician O3 formation in the Lebien LE-2H lateral well and of the Cambrian Alum formation in the Strzeszewo LE-1 vertical well will be of considerable value in planning completion and testing programmes in future wells, beginning with our forthcoming drilling programme which is due to commence in the fourth quarter of 2013.

"While we have flowed gas to surface from all four wells on our western Baltic Basin concessions, it will take further drilling and testing of wells on or close to our concessions in order to arrive at a better understanding of the potential of our two shale targets. We continue to work towards this goal together with ConocoPhillips, and we remain believers in the long term potential of the Baltic Basin shale play on our concessions."

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Chief Executive Officer's review

Introduction

Following the adoption of a narrower geographical focus for the Group's activities, as described in our 2012 Annual Report, we have concentrated our efforts on progressing our Baltic Basin exploration and appraisal programme in northern Poland, while reducing our financial commitments elsewhere. Although our northern Poland concessions remain at an early stage of appraisal, we believe we have made considerable progress towards both objectives, as further described below.

Operational review

Baltic Basin concessions

Activity during the period under review has focused on the Group's three western Baltic Basin concessions in northern Poland, which we continue to believe represent some of the most prospective shale acreage in the entire onshore part of the Basin, and indeed in Poland. ConocoPhillips acquired a 70% interest in these concessions in September 2012, as a result of the exercise of its option to farm in, becoming operator at the same time in place of the Group. Since that date, we have continued to work closely with ConocoPhillips on further improving our understanding of our two target shale formations and their commercial potential, with a particular emphasis on the high-graded area located in the northern part of our western Baltic Basin concessions, as shown in our Annual Report.

Our high-graded area is of a significant size and, we believe, offers the best possibility of success across our concessions by reason of the depth and thickness of the two target shales, and their anticipated reservoir properties. Our geological interpretation is based both on results obtained so far from the two highly deviated lateral wells and three vertical wells which we, together with ConocoPhillips, have drilled on our concessions (including one vertical well on our eastern Baltic Basin concessions), and on data from vertical wells obtained under data sharing agreements with a number of other operators which are active across the rest of the Basin.

All of our wells to date have encountered hydrocarbons. In addition, gas has been produced to surface and flared from all four of the wells drilled on our western Baltic Basin concessions, putting us at the forefront of companies active in the Baltic Basin. Our task now, as we continue to advance our understanding of the properties of our target shales, is to achieve the improvements in flow rates required to justify a decision to proceed with a pilot and ultimately a commercial field development.

In the period since 1 January 2013 we have been engaged in a third round of testing of the Lebien LE-2H lateral well, first drilled in 2011, and we have also commenced a programme of testing of the Strzeszewo LE-1 vertical well, drilled in December 2012. Together with ConocoPhillips we have also continued preparatory work on the 2013/14 drilling programme, now due to commence in the fourth quarter of this year.

Lebien LE-2H lateral well

The Lebien LE-2H lateral well was drilled into the Ordovician O3 (or Sasino) formation in 2011, and tested in 2011 and 2012. When last tested, in the fourth quarter of 2012, the well had flowed at an average rate of 550 mscf/d during a 21 day natural flow test, flowing at approximately 470 mscf/d immediately prior to that test being suspended.

A third phase of testing was initiated on 8 July 2013, using a 2 3/8 inch tubing string as opposed to the 3 1/2 inch string that was used on the last occasion when the well was tested. Down-hole gauges were placed in the well, to collect pressure data, and pressurised samples of the produced fluids were also collected. These data have not, to the Company's knowledge, been gathered from any previous testing in the Baltic Basin, and will be used to help determine the characteristics of the reservoir fluid under reservoir conditions in the target formation.

The well commenced a natural flow test on 21 July 2013, reaching a rate initially of 470 mscf/d, i.e. the same rate as when the second phase of testing was suspended. As at 11 September the well was flowing at approximately 230 mscf/d. The well continued to clean up during the test and by 11 September 2013 approximately 44% of the frac fluid used during the hydraulic fracturing operation on the well in 2011 had been recovered. It is currently intended to continue the natural flow test for up to 60 days from inception, with down-hole gauges then being left in place to continue to collect valuable bottom hole pressure data.

The intention in using a smaller diameter tubing string on the present round of testing had been to provide additional flow-rate velocity during the test, and thereby achieve an improved flow-rate. In the event, the use of the narrower tubing string appears to have had little impact on well performance, although it enabled the well to flow at more stable rates.

Analysis to date of the flow test data obtained on both the present and previous round of testing indicates an area of apparent low fracture conductivity, potentially impeding the flow of natural gas into the wellbore. The area of apparent low fracture conductivity may be explained by a number of factors, many of which can be addressed in future well and completion design, such as the effective length of the lateral section, the frac design, or the presence of non-mobile elements such as paraffin. The pressure build-up data are expected to assist in determining the cause or causes of the low conductivity and how these may be addressed.

Strzeszewo LE-1 vertical well

The Strzeszewo LE-1 well was drilled in 2012 as a vertical well within our high-graded area to enable us to core, log and test our two target formations, the Cambrian Alum (or Piasnica) shale and the overlying Ordovician O3 (or Sasino) shale, the latter being our primary target. Following completion of coring and logging activities in 2012, a first DFIT (Diagnostic Fracture Injectivity Test) was performed in the Cambrian horizon during the first quarter of 2013, followed by a single stage hydraulic frac treatment in May 2013.

Cleaning up commenced on 4 August 2013, using a nitrogen lift as planned. After being temporarily shut in on 16 August to enable the perforations to be checked and to set down-hole pressure gauges, the well flowed natural gas and a flare was lit for a short period. The well was eventually shut in on 7 September 2013, by which time some 22.5% of the frac fluid originally injected had been recovered. Gas samples were obtained, although the well only flowed natural gas intermittently. A pressure build-up test is now being conducted.

The Strzeszewo LE-1 well is currently the only well where we have tested the Cambrian Alum shale on our concessions, since our most recent log and core analysis, discussed below, now indicates that our Warblino LE-1H lateral section did not test this zone. As we have indicated previously, the excellent hydrocarbon generation properties of the Cambrian Alum shale in this region of Europe are well known, as has been confirmed by the encouraging total organic carbon (TOC), shale porosities and gas shows recorded when we have drilled through this formation on our concessions. These would appear to indicate that the formation is at least as prospective as the Ordovician O3 horizon. We continue with ConocoPhillips to consider possible strategies for demonstrating its potential.

Preparations are continuing for a second test programme in the Strzeszewo LE-1 well, comprising a DFIT, hydraulic frac stimulation and flow test in the Ordovician O3 zone, our primary shale target. This programme is planned to take place in the fourth quarter of 2013.

Legowo LE-1 well

We drilled the Legowo LE-1 vertical well in 2010 on our Cedry Wielkie concession (one of our eastern Baltic Basin concessions), where we remain 100% owner and operator. The well was then cored, logged and tested with a DFIT. Following the decision to prioritise our western Baltic Basin concessions for further exploration activity, it was decided to plug and abandon the Legowo LE-1 well and to reinstate the well location to its original condition. The plug and abandon work has now been completed. The well location has been re-instated and will shortly be returned to the landowner for agricultural use. The cost of this work was funded in full by ConocoPhillips under the terms of the Joint Evaluation Agreement signed in 2009.

Seismic acquisition

In July 2013 the acquisition of 32 sq km of 3D seismic data on the Karwia concession was completed. This seismic survey is to meet existing licence commitments on the Karwia concession and will also be used to support future drilling activity. The new data acquired are now undergoing processing and interpretation. The acquisition of 70 km of 2D seismic data is also planned on our Lebork concession, pending ministry approval, which will assist in the placement of future lateral wells being considered for this area.

Core and log analysis

Some 220 metres of core were taken from across the entire prospective section in the Strzeszewo LE-1 well and this, in combination with the well logs, has been undergoing detailed analysis. Further analysis also continues to be carried out on cores and logs taken from the Lebien LE-1 well and from the vertical pilot well drilled at Warblino LE-1. While this analysis is an ongoing process, conclusions to date have enabled a significantly improved understanding of our principal target zones, including of their reservoir properties and materiality.

Further analysis of cores and logs from the Warblino LE-1 vertical well, drilled in 2011, now indicates that the lateral section sidetracked from this well, and tested in 2011 and 2012, in fact tested the adjacent Ordovician O1 (or Sluchowo) shale formation, instead of the Cambrian Alum shale as originally intended. Log analysis also appears to confirm the very promising hydrocarbon generation properties of the Cambrian Alum shale in this area, consistent with the strong gas shows which we have recorded when drilling through this formation.

Our primary objective remains the Ordovician O3 shale interval, which is estimated to have a thickness of 25 to 30 metres across our high-graded area. The Cambrian Alum shale interval represents a potentially important additional objective. This zone, which was not included in our Competent Person's Report at the time of our IPO, is estimated to have a thickness of 15 to 20 metres across the high-graded area. Each interval is being separately evaluated on the basis that either might potentially justify a field development.

2013/14 drilling programme

Together with ConocoPhillips, we are working on a 2013/14 drilling programme which is scheduled to commence in the fourth quarter of 2013. This programme involves the drilling of at least two wells, initially drilled as vertical wells, located within our high-graded area. The wells will be extensively cored and logged, following which a programme of DFIT and/or well stimulation and flow testing will be carried out. The programme is designed to enable us to evaluate further the reservoir potential of both target zones in our high-graded area, leading potentially to a decision to drill one or more lateral sections in either or both zones, as a precursor to a decision on a potential pilot development programme. As vertical wells, they will offer the option to test multiple pay zones; and they will also be designed to allow for lateral sections subsequently to be drilled and tested, as required.

A drilling contract has been signed with United Oilfield Services, providing for the drilling of two firm vertical wells with the option to drill up to two additional wells. Well locations are being finalised and construction is under way.

We maintain a close collaboration with ConocoPhillips regarding all aspects of our operations in our western Baltic Basin concessions. In particular, we continue regularly to review with ConocoPhillips the 2013/14 drilling programme and the timetable for its implementation, in the light of new data obtained from the results of our ongoing field operations.

We have commenced discussions with ConocoPhillips regarding the budget for the 2014 work programme, and this process is continuing. One option under consideration is to re-enter the Warblino LE-1 vertical well in order to drill and test a new lateral section in the Cambrian Alum shale, given that the previous lateral section drilled and tested in this well has now been found not to have tested this zone.

Other assets

As we indicated in our last Annual Report, we have been investigating options for monetising our licence interests outside our Baltic Basin concessions, without incurring any immediate expenditure on these assets. We are in active discussions with potential partners in relation to both our eastern Baltic Basin concessions and our southern German concessions, which are still undergoing renewal. In the case of our southern Poland concessions, we had the option to drill one vertical well on each of these two concessions by August 2013, or to relinquish the concessions. We have chosen not to drill either of these wells and have therefore relinquished the concessions.

Polish oil & gas sector

We have continued to play an active role in discussions relating to the future development of the oil & gas sector in Poland, and in June 2013 I was elected President of the Management Board of OPPPW, the Polish Exploration and Production Industry Organisation. There continues to be an active debate on the future shape of the fiscal and licensing regime in Poland, both in the press and elsewhere, and that seems likely to continue for some time yet. Senior members of the Polish government have recently made statements indicating their strong support for the development of shale gas exploration in Poland.

Organisational changes

In our last Annual Report, we committed to implement a number of changes in the way the Group is organised and staffed, with a view to tightening the Group's focus and controlling our administrative expenses. These changes have since been made so that, with effect from 1 July 2013, we are targeting a reduction in cash administrative expenses, before foreign exchange movements, of approximately 50% as compared with 2012.

Financial review

Investment in our oil and gas assets over the six months ended 30 June 2013 increased by £3.7 million to £21.4 million, compared to an increase of £0.6 million over the same period in 2012. This additional investment represents our share of costs incurred in connection with exploration and appraisal activities on our western Baltic Basin concessions, including advance costs incurred in connection with the 2013/14 drilling programme.

Cash and cash equivalents at 30 June 2013 amounted to £36.0 million, reflecting investments in our oil and gas assets of £3.7 million, a profit of £0.7 million and movements in working capital over the period.

We recorded a loss before exchange rate movements of £1.5 million for the six months ended 30 June 2013, as compared to a loss of £1.3 million for the same period in 2012. After a foreign exchange gain of £2.2 million over the period, as compared to a foreign exchange loss of £0.7 million for the same period in 2012, we recorded a profit of £0.7 million for the six months ended 30 June 2013, as compared to a loss of £2.0 million for the six months ended 30 June 2012.

Administrative expenses declined to £1.3 million for the six months ended 30 June 2013, against £1.6 million for the six months ended 30 June 2012, and included share-based payments of £0.2 million (£0.1 million for the six months ended 30 June 2012).

Conclusion

With our strong funding position and working alongside ConocoPhillips, a company with an excellent record in the exploration and development of unconventional oil and gas resources, we remain well placed to continue progressing our primary objective, namely the further appraisal of the high-graded area within our western Baltic Basin concessions. We continue to believe that these concessions contain some of the most prospective shale acreage in Poland.

While we need to achieve considerable improvements on the flow rates achieved so far from our two target formations, we are nevertheless continuing to improve our understanding of these formations as field operations proceed. Moreover, as we gain further knowledge we expect to be able further to improve well and completion design in future operations. The Baltic Basin shale play is still in its early stages and we look forward to delivering further improvements, as we go forward.

In the near term, we continue to work with ConocoPhillips towards our next key milestone, namely a decision on the drilling of one or more further lateral sections in our high graded area. These would be completed with multi-stage well stimulations and tested, applying our knowledge and understanding of the Baltic Basin geology which we have developed to date.

We thank our shareholders for their continued support.

Kamlesh Parmar

Chief Executive Officer

17 September 2013

3LEGS RESOURCES PLC

Consolidated Statement of Comprehensive Income

3LEGS RESOURCES PLC

Consolidated Balance Sheet

As at 30 June 2013

3LEGS RESOURCES PLC

Consolidated Cash Flow Statement

For the six months ended 30 June 2013

3LEGS RESOURCES PLC

Consolidated Statement of Changes in Equity

As at 30 June 2013

3LEGS RESOURCES PLC

Notes to the Interim Financial Statements

For the six months ended 30 June 2013

1 General information

3Legs Resources plc (the 'Company') is incorporated in the Isle of Man, British Isles under the Isle of Man Companies Act 2006. The address of the registered office is Commerce House, 1 Bowring Road, Ramsey, Isle of Man, British Isles, IM8 2LQ.

The nature of the Group's operations and its principal activities are the exploration, evaluation and development of oil and gas targets, primarily from unconventional resource plays.

2 Basis of preparation

The consolidated interim financial information has been prepared using policies based on International Financial Reporting Standards ('IFRSs') as issued by the International Accounting Standards Board (the 'IASB') and as adopted by the European Union (the 'EU'). These policies and practices are consistent with those adopted in the Group's financial statements for the year ended 31 December 2012 and are also consistent with those which will be adopted in the Group's financial statements for the year ended 31 December 2013.

The consolidated interim financial information is unaudited and does not constitute statutory accounts as defined by section 434 of the Companies Act 2006, and should be read in conjunction with the Group's financial statements for the year ended 31 December 2012. In the opinion of the Directors the consolidated interim financial information for the period represents fairly the financial position, results from operation and cash flows for the period in conformity with generally accepted accounting principles consistently applied.

The consolidated interim financial information incorporates unaudited comparative information for the period ended 30 June 2012, which has been represented in respect of the consolidated income statement to improve the clarity of information presented therein. Comparative figures for the financial year ended 2012 have been extracted from the financial statements for that period which carried an unqualified audit report.

The consolidated interim financial information has been prepared in accordance with IAS34 Interim Financial Reporting.

During the first six months of the current financial year there have been no related party transactions that materially affect the financial position or performance of the Group and there have been no changes in the related party transactions described in the last annual financial statements.

The principal risks and uncertainties of the Group have not changed since the last annual financial statements where a detailed explanation of such risks and uncertainties can be found.

3 Dividends

The Directors do not recommend the payment of a dividend for the period.

4 Share of results of joint venture

5 Profit/(loss) per Ordinary Share

Basic profit/(loss) per Ordinary Share is calculated by dividing the net profit/(loss) for the period attributable to Ordinary equity holders of the parent by the weighted average number of Ordinary Shares outstanding during the period. The weighted average number of Ordinary Shares outstanding during the period and for the prior periods presented has been adjusted in accordance with IAS 33 Earnings per share.

The calculation of the basic and diluted profit/ (loss) per share is based on the following data:

Options and share rights with an exercise price greater than the average 3Legs Resources plc share price over the period have not been included as these are considered not dilutive.

6 Share capital

Authorised and issued equity share capital

The Company has one class of Ordinary Shares which carry no right to fixed income.

7 Notes to the cash flow statement