Investment Update

TAU CAPITAL PLC

("Tau" or "the Company")

10th May 2012

INVESTMENT UPDATE

Tau today provides an update on its portfolio company Lucent Oil & Gas Ltd. ("Lucent"). Lucent is a privately owned independent oil & gas exploration and production company with interests in West Kazakhstan, and accounts for 10.7% of total NAV, as of 4th May 2012.

The Company has received the following update from Lucent via its Investment Manager: On the basis of this update the board of Tau has decided to mark down its investment in Lucent by 25% due to the extension of the time frame of the drilling program. The Board of Tau notes however that the ultimate parent company of Lucent, VISOR Group has taken the decision not to mark down its investment. The mark down will result in a reduction in the NAV of approximately 2.62%.

"Financial Update

Following the initial set-up of the business in September 2007, with a 99% interest in the Yuzhne block in West Kazakhstan (Subsoil Use Contract 317), initial seed funding of US$12m was provided by the Visor Group ("Visor") over the 2008-10 period. This was used primarily to fund an extensive seismic program on various structures in its Yuzhne block asset, allowing management to identify the target structures and put in place a drilling program.

In order to fund the drilling program, Lucent raised US$15m of convertible loan finance from Tau, that was paid in three tranches in September 2010, February 2011 and July 2011, and which was subsequently converted to equity(6.18%) as per plan, in January 2012. At the same time, the founding shareholders, Visor, committed a further US$5m of financing to the business, to be taken up in the event that further financing of at least US$15m from external sources could not be arranged.

Following the drilling of two wells, Lucent raised a further US$30m through a further round of financing, negating the need for further financing to be provided by Visor.

Today, the current net cash position of the company is US$20.5m, which is sufficient to allow Lucent to complete its drilling program of 1 further well, and 751 km of seismic commitments on the license.

Operational Update

Based on interpretation of 2000 and 2009 seismic acquisitions, two well locations were selected for drilling in 2011. The first of these was Lebyazhye L-14X,an appraisal of the two Lebyazhye Triassic reservoirs,  drilled to a total depth of 3,760m in late 2011. The well encountered hydrocarbons in the predictedintervals at a depth of approximately 3,480m and in a new hydrocarbon bearing reservoir deeper at 3,617m. The new lowerinterval, at 3,617m to 3,639m was perforated, and tested gas and 40o APIoil at sub-commercial rates after hydraulic fracturing in 2012. Pressure build-up is currently being completed before the company prepares to evaluate the upper two target intervals in the coming months.

The second well, PO-1X, was drilled to test the South Prorva exploration prospect and reached a total depth of 3,863m in late 2011. Having encountered no commercial hydrocarbon interval, the well was plugged and abandoned with shows.

Lucent updated the seismic interpretation of the license in late 2011 and early 2012 with the new well data and a more refined geological model. As a result, increased potential has been identified and the P3 recoverable resources upgraded to 1,057 million barrels (from 686 million barrels) on the block with the mapping of new high value prospects and leads in the southern and eastern areas.

In March 2012 the company mobilized seismic contractor DANK to acquire a 534 sq.km.3D program over the eastern area of the Block, with an option of another 217 sq.km.to be acquired subsequently in the south. After acquisition is completed during the dry season, the seismic data will be processed in-country later in 2012. The purpose of the 3D acquisition is to mature and rank existing and additional drillable prospects for the allocation of the company's resources.

The new prospectivityhigh-graded by Lucent includes a deep Devonian and Carboniferous carbonate platform previously unexplored and geologically analogous to the carbonate reservoirs of the neighbouring Tengiz field. Initial mapping has revealed a potentially large prospect with initial resource estimates potentially in the region of a billion plus barrels of oil in place. Thecompany has initiated early-stage discussions with potential farm-in partners to help finance the drilling of the deep exploration play. In addition, Lower Permian carbonate reservoirs analogous to the Tolkyn field are proven by exploration wells close to the block boundary in adjacent acreage and Lucent is currently evaluating a discovery which potentially extends into the Lucent license area."

--ENDS--

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