Medium Term Funding Agreement

11 November 2019

COLUMBUS ENERGY RESOURCES PLC

("Columbus" or the "Company")

Medium-Term Funding Agreement of up to US$4.5 million

Columbus, the oil and gas producer and explorer with operations in Trinidad and Suriname, is pleased to announce that it has agreed to terms for a new Convertible Loan Agreement (the "Agreement") with Lind Global Macro Fund LP an entity managed by The Lind Partners (together "Lind" or the "Funder") to provide access to additional funds, should they be required, to:

·; assist with any un-planned additional costs arising from the drilling of the Saffron well in Trinidad;

·; enable Columbus to fast-track the appraisal and development of the Saffron prospect following any discovery; and

·; provide the resources to fast-track planned technical and operational activities on the Weg Naar Zee licence in Suriname, including development of the field following the extended well tests.

The Agreement provides Columbus with access to a medium-term funding (the "Funding") which is available for drawdown in three separate tranches, the first US$1.5 million tranche being drawn-down immediately with two further US$1.5 million tranches being available for drawdown in future, subject to certain conditions as detailed below.

The Agreement effectively replaces the facility entered into in 2016 under which Columbus has recently made the final repayment of amounts drawn-down in December 2016 and October 2017. The Company has made total repayments to the Funder under the previous facility of approximately US$3.2 million since January 2017. Apart from two exceptions (set out below), all monthly payments were made in cash.

Leo Koot, Executive Chairman of Columbus, commented:

"The Company is currently drilling the Saffron well, with operations and costs in line with our previous expectations. As with any drilling campaign, it is prudent to have sufficient cash resources to complete the well if the Company encounters unexpected operational delays or unexpected hazards. In addition, Columbus wishes to have the financial flexibility to enable us to move forward with the appraisal and development of a Saffron discovery and speed up our plans in Suriname to unlock the potential of the Weg Naar Zee opportunity we recently announced. The Funding provides the Company with that flexibility and also provides a "financial insurance policy" for the Company going forward.

The Company's past experience with Lind, who have provided similar facilities in 2016 and 2018, gives us comfort that the Funding is the right way to provide the working capital should it be needed to cover unexpected costs and will also enable Columbus to progress our plans faster than might otherwise be the case, should this make good business sense in 2020 and beyond.

The Company believes that the Funding is value accretive for our shareholders as it minimises equity dilution whilst providing financial flexibility at minimal cost. I am delighted to be able to continue our excellent relationship with Lind who have proved to be a very supportive partner for Columbus over the past few years.

We have not yet decided whether we will draw upon the second and third tranches which are available to us and will keep the market informed of our plans as we progress into 2020. I would stress that the Company remains committed to finding the lowest cost options for appraising and developing its assets and will judge any further drawdown under the Agreement against other options at the time."

The Agreement:

The main terms of the Agreement are as follows:

·; A total of US$4.5 million available to the Company to drawdown.

·; US$1.5 million drawn down on signature of the Agreement, with the money received by the Company within 10 business days ("Tranche 1").

·; Right to drawdown an additional US$1.5 million at any time, provided the Company's market capitalisation is above US$25 million ("Tranche 2").

·; Right to drawdown an additional US$1.5 million provided: (i) the Company's market capitalisation is above US$25 million (currently approximately US$40 million); and (ii) the outstanding borrowing from Tranche 1 and Tranche 2 is less than US$2 million ("Tranche 3").

·; The following terms and conditions apply:

·; Tranche 1:

·; 120-day repayment free window before repayment of the loan commences over a 20-month period.

·; Repayments, at Company's option, either in cash or Company shares (or both). The monthly cash payment would be US$89,066 and any shares issued would be at approximately 90% of the then current 20-day VWAP (the "Repayment Price").

·; Tranches 2 & 3:

·; Repayment of each tranche to be over a 24-month period.

·; Repayments, at Company's option, either in cash or Company shares (or both). The monthly cash payment for each Tranche (if drawn) would be US$74,222 and any shares issued would be at approximately 90% of the then Repayment Price.

·; For all three tranches:

·; The Funder has the right to convert any loans outstanding into Company shares at a fixed share price equal to 130% of the Company's 20 day VWAP prior to signature of the Agreement (approximately 5.1p) (the "Conversion Price").

·; Company has the right to buy-back the outstanding balances (the "Buy-Back") at any stage during the term of the loan without penalty, although the Funder has the right to convert up to 25% of the Buy-Back into Company shares at the lower of Repayment Price or the Conversion Price.

·; Company has paid an up-front commitment fee of US$105,000 for Tranche 1 and Tranche 2. If the Company draws down on Tranche 3, a fee of US$52,500 will be payable. Apart from legal fees incurred to establish the Agreement, no other fees are payable.

·; For Tranche 1, the Funder has received 14,625,000 share options, which may be exercised within 60 months at a share price equal to 150% of the 20 day VWAP immediately prior to drawdown. For Tranche 1, the exercise price is 6.0p. For Tranche 2 and Tranche 3, additional options on similar terms and conditions would apply upon any drawdown.

·; The Funder has the right, upon certain terms and conditions being met, to re-invest up to 50% of the Tranche 1 amount (and, if drawn down, the Tranche 2 amount) on similar terms and conditions.

·; The amounts drawn-down are secured against 7,500,000 shares in the Company ("Collateral Shares") and will rank as senior secured debt against the assets of Columbus (subject to existing security). The Collateral Shares will be issued simultaneous with the receipt of Tranche 1 by the Company, for which a further announcement will be made in due course. The Funder will pay par value for the Collateral Shares and if the Funder calls upon the Collateral Shares it shall pay the Company the then current market price of the Collateral Shares called minus the par value previously paid.

Background:

Columbus has recently made the final repayment under the previous agreement with Lind of the amounts drawn-down in December 2016 and October 2017. The Company made total repayments under the previous agreement of approximately US$3.2 million since January 2017. All monthly payments were made in cash, apart from two exceptions (in September and November 2017 when the Funder chose to convert US$150,000 and US$300,000 into shares at 3.0p and 4.5p respectively). Lind and Columbus have established an excellent working relationship over the past three years and Lind was keen to provide the Agreement which will provide Columbus with the flexibility to progress its plans in Trinidad and Suriname in 2020 at a faster pace than might otherwise be the case using operational cashflows.

This announcement is inside information for the purposes of Article 7 of Regulation 596/2014.

Contact Information

Notes to Editors:

Columbus Energy Resources Plc is an oil and gas producer and explorer focused on onshore Trinidad and Suriname. In Trinidad, the Columbus Energy group has five producing fields, one appraisal/development project and a highly prospective exploration portfolio in the South West Peninsula ("SWP"), which lies in the extreme southwest of Trinidad and consists of stacked shallow and deep prospects. In Suriname, the Company has recently secured an onshore appraisal/development project. Columbus is operationally cashflow positive and aims to create transformational growth by developing its portfolio in a capital efficient and disciplined manner.

Columbus is guided by the following core values; safe and sustainable, stronger together, creative excellence, positive energy, totally trusted and personally responsible.

The Company is led by an experienced Board and senior management team with supportive shareholders and intends on leveraging its expertise and experience to build an attractive and diversified portfolio of assets across South America in order to build an oil production led South American exploration business. 

To find out more, visit www.columbus-erp.com or follow us on Twitter @Columbus_ERP.