Issue of Equity

Mercom Oil Sands plc

("the Company")

Issue of equity

The Company announces that it has issued a total of 1,782,294 New Ordinary Shares in settlement of director fees and other advisory fees and charges.

Of these shares, 523,415 New Ordinary Shares have been allotted to Kyle Appleby, a non-executive director of the Company, at 3.63p per share in settlement of fees charged under his letter of appointment. The remaining 1,258,879 New Ordinary Shares have been allotted at an average price of 3.97p per share in settlement of advisory fees and charges. These fees and charges have been settled in shares in order to preserve the Company's cash resources.

The issue of the New Ordinary Shares to Kyle Appleby is deemed a related party transaction under the AIM Rules. Patrick Cross and John Zorbas, as independent directors, consider, having consulted with Northland Capital Partners Limited, the Company's nominated adviser, that the terms of the issue of the New Ordinary Shares to Kyle Appleby are fair and reasonable so far as the Company's shareholders are concerned.

Application will be made for the New Ordinary Shares, which rank pari passu with the Company's existing issued Ordinary Shares, to be admitted to trading on AIM ("Admission"). Admission is expected to take place on or around 28 October 2015.

Following Admission, Kyle Appleby will be interested in 994,081 shares, representing 5.7 per cent. of the enlarged issued share capital of the Company.

Total voting rights

Following Admission, the Company's issued share capital will comprise 17,426,809 Ordinary Shares with one voting right per share. There are 200,036 Ordinary Shares in treasury. The total number of voting rights in the Company is therefore 17,226,773. The figure of 17,226,773 may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in their interest in, the share capital of the Company under the FCA's Disclosure and Transparency Rules.

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