Issue of Equity

Mercom Oil Sands plc

("the Company")

Issue of equity

The Company announces that it has allotted a total of 1,370,832 New Ordinary Shares at 6p per share (of which 466,666 New Ordinary Shares have been allotted to each of Patrick Cross and Kyle Appleby, non-executive directors of the Company and 437,500 New Ordinary Shares have been allotted to Albert Taubi, a former non-executive director of the Company).

The New Ordinary Shares are being issued in settlement of fees charged for work on special projects (outside the scope of their letters of appointment) as disclosed in the Company's Report and Accounts for the year ended 31 March 2014 and which are being settled through the issue of New Ordinary Shares in order to preserve the Company's cash resources.

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 30 January 2015.

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

At the date of this announcement, the Company's issued share capital comprises 12,609,629 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 12,409,593.

The above figure 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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