Notice of GM

For Immediate Release

15 February 2017

LGO ENERGY PLC

("LGO" or the "Company")

Notice of General Meeting 

LGO has today posted to Shareholders a circular, notice and related documents ("the Documents") convening a General Meeting of the Company to be held at 200 Strand, London, WC2R 1DJ on Tuesday 7 March 2017 at 10.30 am. The Documents are available on the Company's website www.lgo-energy.com and copies of the Document will be available free of charge during normal business hours on any weekday (except public holidays) from the registered office of the Company at Suite 4B, Princes House, 38 Jermyn Street, London SW1Y 6DN from the date of this announcement until the date of the General Meeting.

The meeting has been called to seek Shareholder approval for (i) a capital reorganisation (share consolidation), (ii) electronic communication with shareholders, and (iii) authority for the allotment of shares. A letter from the Chairman extracted from the circular and outlining the background behind the resolutions is attached in Appendix II below. Details of the resolutions can be found on the Company's website.

Neil Ritson, LGO's Executive Chairman, commented:

"Having completed the refinancing in December 2016, the Company is now able to return to growing the value of the business. There is also an opportunity to deal with administrative corporate matters, to streamline how the Company communicates with its Shareholders and to align the Company with best practice amongst our peers."

Enquiries:

Appendix I

Expected Timetable of events

Appendix II

Letter from the Chairman of the Company

I am writing to invite you to a General Meeting of the Company to be held at 10:30am on 7th March 2017 at 200 Strand, London WC2R 1DJ. The formal notice of the General Meeting is at the end of this Document.

The purpose of this Document is to provide Shareholders with details of the authorities sought at the General Meeting and to explain why the Directors are recommending to Shareholders to vote in favour of the resolutions to be proposed at the General Meeting.

There is little doubt that the oil and gas sector has been hard hit in recent years, by the major fall in oil prices and increased volatility in the commodity markets. Whilst there has been a gradual recovery in prices during the second half of 2016 and a stabilisation since OPEC reached agreement on medium-term quotas, oil prices today are about half of what they were in 2014.

In addition to operating under these conditions, LGO has had an especially difficult 15 month period due to the specific circumstances surrounding its 2015 loan facility and the loss of well GY-678 in October 2015. Notwithstanding the significant challenges faced by the Company, the Board believes a fundamental turnaround has been achieved in which the Company's reputation and licence to operate in Trinidad has been preserved. By repaying its senior debt to BNP Paribas and paying its trade creditors in Trinidad, the Board believes that LGO has shown it has quality assets and a dedicated management team.

Having refinanced its 2015 debt position into an affordable, sustainable facility, LGO is now able to look to the future. Its core assets at the Goudron Field and South West Peninsula in Trinidad provides a sustainable foundation for the portfolio as well as exciting high value growth options, subject to funding. The Goudron Field is profitable at significantly lower oil prices than are being realised at present and will benefit from rising oil prices.

The Board remains fully committed to a return to our original ambition of growth of shareholder value and is convinced that the current strategy will deliver the desired recovery and growth of the Company. LGO has a bright future and we encourage the Company's shareholders to support the resolutions and to actively engage with the Board's plans to develop the Company to be a significant onshore production company operating in Trinidad.

1 Corporate and Operational Update

Background to the resolutions

In March 2015, LGO secured a senior lending facility from BNP Paribas ("BNPP") in the form of a pre-paid swap and drew down approximately US$11.8 million to fund the drilling of 7 development wells to the deeper C-sand reservoir in the Goudron Field in Trinidad.

As you may already be aware in October 2015 LGO's subsidiary in Trinidad, Goudron E&P Limited, suffered a significant operating issue with well GY-678 in the Goudron Field. Well GY-678 was the last of the planned 15 well C-sand drilling campaign, and the seventh well being funded by the BNPP facility. The loss of that well and the downhole equipment, combined with a steep drop in oil price, had immediate dramatic impacts on the Company.

As a consequence of the GY-678 incident, and exacerbated by the low and falling oil price, the covenants on the BNPP facility, principally relating to liquidity, were breached and BNPP moved to restrict access to the Company's accounts holding funds already drawn against the facility to pay for the drilling programme. All payments for capital and creditors from those accounts were immediately halted by the bank. As a result, the Company had to deploy capital available from across the LGO Group, and new shares in the Company were issued, where possible, to reduce and pay creditor liabilities and to fund some low cost production enhancement work at the Goudron Field.

During 2016, as a result of these capital constraints, the production at the Goudron Field declined from late 2015 levels, but was maintained through carefully selected recompletions, at an average level of 425 barrels oil per day for the year to 31 December 2016. Goudron is a low cost onshore operation and has the additional advantage of reduced royalty payments as oil prices fall. As a consequence Goudron remains profitable at current production rates even at oil prices below US$25 per barrel.

By December 2016 LGO had progressively reduced the balance outstanding to BNPP to approximately US$3 million and was able to refinance the remainder of the facility with a new funding facility ("Funding Agreement") by Lind. The repayment of the BNPP Facility allowed GEPL to access funds in Trinidadian dollars that had been restricted by BNPP during the default period. GEPL deployed these funds to complete the payment of all creditors in Trinidad and to initiate the delayed drilling of infill production wells in the Mayaro Sandstone formation of the Goudron Field.

The first tranche ("First Tranche") funding of US$1.825 million from Lind is for a 24 month period during which LGO can, at its election, repay at a monthly rate of US$94,500 in cash or by issuing shares at the prevailing market price on each monthly payment date, though to date, LGO has elected to pay cash using internally generated cash flows. Lind has the right to convert the outstanding balance into equity at a price of 0.15p. Lind also has the right, at their election, to increase the funding by US$750,000 during the term of the First Tranche. Any subsequent draw down, to a maximum aggregate total of US$8.6 million over the life of the Funding Agreement, is by mutual agreement of the parties. In turn, LGO has the right to buy-back the balance owed on the Funding Agreement at any time on agreed terms.

The Funding Agreement with Lind includes provisions to grant options to Lind to subscribe for ordinary shares in the Company and allow the conversion of the balance of the facility to equity at a fixed price of 0.15 pence per share. At the date when the Funding Agreement was put in place, LGO was not in a position to issue all the shares required without further shareholder approval. Therefore it was agreed between the Company and Lind to defer the issue of a portion of the options granted and also limit the conversion rights of the facility until such time as LGO, through a General Meeting, could complete its contractual obligations to issue shares under the Funding Agreement with the approval of shareholders.

To comply with the terms of the Funding Agreement, options for a further 83.26 million ordinary shares are required to be granted in the first quarter of 2017 (based on the Company's current issued share capital) and shareholder authorities maintained to cover the possible conversion of the balance of the facility, which requires approximately 1,097 million shares. The shareholder authorities sought at the General Meeting includes these obligations.

Trinidad

The 15 well C-sand program, conducted in two campaigns in 2014 and 2015, was in part designed to provide the necessary information for the design of an enhanced oil recovery ("EOR") scheme. That data has been synthesised and interpreted with all other field data and is at the heart of an application to the Ministry of Energy and Energy Industries ("MEEI") in Trinidad to conduct a waterflood EOR pilot scheme in the C-sands at Goudron using available produced water and up to 8 existing wells. That application is being finalised and will be progressed expeditiously during 2017. There are several successful local analogue projects such as at the Beach Marcelle and the Navette Fields and LGO is confident that a waterflood EOR scheme at Goudron offers considerable potential. That potential is best established first through a low cost pilot before embarking on a larger scheme.

In June 2016 Deloitte LLP's reserves audit team in Calgary reviewed the reserves and resources data for the Goudron Field and reported increases in all categories from proven reserves, through probable and possible reserves to contingent resources, and the oil in place. Based on the additional drilling and production since the previous LR Senergy report in June 2015, Deloitte's reserves auditors identified proved (1P) gross oil reserves in the Mayaro Sandstone and C-sand reservoirs of 1.6 million barrels ("mmbbls"), an increase of 3% compared to the June 2015 resource report conducted by LR Senergy. The gross proven and probable reserves (2P) increased by 4% to 11.8 mmbbls. Proved, probable and possible reserves (3P) increased by 9% to 25.6 mmbbls.

The first resource report commissioned by LGO prior to acquiring the field in 2012 estimated gross upside (3C) contingent resources of 63.2 mmbbls, related to a future waterflood EOR scheme. The 2015 report by LR Senergy did not consider contingent resources, however, the 2016 Deloitte report includes an estimate of gross 3C resources of 63.4 mmbbls, which is very close to the 2012 estimate.

The oil in place within the Goudron Field estimated by Deloitte using all available data, including the 15 new wells, also rose relative to the LR Senergy estimate by over 20%. Estimated oil originally in place ("STOIIP") within the Goudron Field is now reported to be up to 975 mmbbls, with a most likely (P50) estimate of 555 mmbbls.

Consent has been granted by the Trinidadian Environmental Management Agency for a further 45 wells at the Goudron Field. A programme of approximately 20 new wells targeting infill locations in the Mayaro Sandstone reservoir are planned to a maximum depth of approximately 1,900 feet. The wells are estimated to cost US$500,000 per completed well, with initial production targets conservatively set at an average of 45 barrels of oil per day ("bopd") per well, although some wells are predicted to have higher production capacity based on the large body of historic data.

In December 2016 GEPL contracted the services of Sadhna Petroleum Services Company Limited ("Sadhna") to conduct the initial two wells of the Mayaro Sandstone infill programme on a turnkey basis. Sadhna will deploy a newly built Chinese rig, Range Drilling Rig#18, to carry out the work which will be supervised by a team from LGO and Bedrock Drilling Limited. These two wells will be funded out of existing cash resources.

At the time of writing all permissions have been obtained and well site preparation has started on the drilling sites for the first two Mayaro Sandstone infill wells. Drilling will commence as soon as practical once the site preparation is complete. Sites for a further 8 wells have been selected for possible drilling in 2017, but will depend on available funding.

Elsewhere in Trinidad, LGO has developed a dominant lease position in the South West Peninsula ("SWP"), an area of underexplored land adjacent in the highly prolific East Venezuelan Basin with contiguous hydrocarbon geology to that found in nearby Venezuela. LGO, through its wholly owned subsidiary Leni Trinidad Limited ("LTL"), holds exclusive rights to approximately 11,000 gross acres of prospective petroleum rights, including the shallow Bonasse and Icacos oil fields.

LTL holds all relevant exploration data in the SWP and has acquired, with Beach Oil Field Limited ("BOLT"), a proprietary soil geochemical survey and, in collaboration with the MEEI, a high resolution airborne gravity and magnetic dataset. The data and the lease position when taken together give LTL a significant competitive advantage in this underexplored region, where only one deep well, FRM-1, has been drilled and shallow oil fields have been discovered. This single deep well was drilled in 2008 to a depth of approximately 11,700 feet and discovered oil in the Lower Cruse formation before being abandoned following an accident.

LTL recently signed a Sale and Purchase Agreement ("SPA") with BOLT to acquire the entire shareholding in BOLT and thereby place the operatorship of the leases held by BOLT in LTL's hands. Once this SPA closes, anticipated to be in March 2017, LTL will initiate work to reactivate the Bonasse Oilfield which has been shut-in since mid-2016 and has plans, in due course, to drill several new wells at Bonasse which it considers to be underexploited.

Gross unrisked prospective resources of over 1.3 billion barrels of oil have been estimated in over 8 prospects and leads within LGO's SWP lease interests and in the medium term, LTL plans to complete the evaluation of the SWP leases and to propose the drilling of at least one new deep well to test the potential of the Cruse and Herrera Sandstones which, in addition to the results of FRM-1, are known to be oil bearing due to rock samples recovered from mud volcanoes in the SWP. Deep drilling in the SWP requires new funding, potentially through a conventional farm out, in due course.

Spain

During 2016, the Company maintained production operations at the Ayoluengo Field in northern Spain and continued its dialogue with the Spanish authorities on extending the existing La Lora Concession ("Concession") for a further two 10-year periods. LGO's Spanish subsidiary, Compañía Petrolífera de Sedano, S.L.U. ("CPS"), was advised by its Spanish lawyers that it had a very strong case for an extension, notwithstanding that the hydrocarbon laws in Spain had changed extensively over the preceding 50 years of the Concession, which was originally awarded in 1967.

CPS prepared and submitted to the Spanish authorities a thorough legal, technical and commercial case for the continuation of oil operations at Ayoluengo, where additional primary oil production employing the existing wells, and side-tracks from them, could be viably obtained. Further potential for secondary or enhanced oil recovery were also presented.

On 27 January 2017 the Spanish Cabinet of Ministers came to a final decision, based on interpretation of applicable law, and issued a Royal Decree declining CPS's application for an extension and allowing the Concession to expire, effective at midnight 31 January 2017.

As a result of the Spanish decision CPS has suspended all petroleum activities at the Ayoluengo Field, including the employment contracts of operational staff and has now submitted a formal letter of interest to the Ministry of Energy, Tourism and Digital Agenda in order to obtain a new 30-year concession over the Ayoluengo Field. We are currently unable to assess the timing of any new award, but every effort is being made to expedite the process. Under European Union and Spanish legislation the offer of a new concession requires a process of public tender in which the previous concession holder has preferential treatment. The Licence expiry has a minimal impact on LGO's operating finances at this stage. Prior to the Royal Decree the carrying value of the Spanish assets was approximately £7 million.

Group Costs

The Board instigated a cost saving and cash preservation programme in third-quarter 2015 which included the suspension of fees to the Chief Executive Officer from September, the suspension of non-executive director's fees from October, the immediate reduction in all discretionary spend, including travel, and a 50% reduction in the salaries of a number of senior staff from February 2016. The discretional spending restrictions remain in place.

It was announced on 9 January 2017 that the Board of Directors was being restructured with immediate effect resulting in the termination of the post of non-Executive Chairman and the reduction in fees to the Chief Executive and the remaining non-executive directors. Steve Horton stepped down as Chairman in January 2017 and Mr Neil Ritson, the Company's Chief Executive has agreed to combine his role with that of Chairman and simultaneously reduce his fee from £240,000 per annum to £200,000. This reflects a total annual saving to the Company of £120,000. The Company's non-executive directors; Michael Douglas and Gordon Stein, have accepted a new fee arrangement of £24,000 per annum, including their roles as chairman of committees, representing a further saving for the Company.

The Board has put in place a further programme of anticipated cuts to its General and Administration ("G&A") costs which is designed, over time, to bring the G&A in line with future earnings. Areas such as staffing levels, staff salaries, office rentals and advisory costs are being closely scrutinised and targets have been set for further reductions.

During this period, when Board fees were deferred to preserve cash resources, a substantial contractual debt totalling £396,675 was created. The directors affected; Mr Ritson (£238,641), Mr Douglas (£43,750), Mr Thadchanamoorthy (£50,826) and Mr Jenkins (£63,458), have agreed, as announced on 21 December 2016, to convert that debt to ordinary shares at a price of 0.15 pence per share, a 35% premium to the price at the time of that agreement in December. LGO is seeking authority to allocate shares to fulfil these obligations.

Outlook

It is the LGO Board's firm view that the assets owned by the Company in Trinidad provide significant value for its shareholders and that value will be most effectively realised through the continued exploitation of those assets. The return to development drilling at Goudron, the C-sand EOR pilot project, and the further development of the SWP properties are seen as key to developing both immediate and longer-term value.

In support of this above investment opportunities, LGO is seeking the authority to issue shares for the purposes of growing the business.

2 Capital Reorganisation

The Company currently has 8,367,599,626 Existing Ordinary Shares in issue. The Directors consider that it is in the best interests of the Company's long term development as a public quoted company to have a more manageable number of issued ordinary shares and to a level which is more in line with other comparable AIM-traded companies.

The Capital Reorganisation, which comprises a consolidation and sub-division of shares, has been structured in such a way so that each of the New Ordinary Shares created pursuant to the General Meeting shall have a nominal value of 0.05p each, being the nominal value of the Existing Ordinary Shares. This is achieved by a consolidation of every 20 Existing Ordinary Share into one Consolidated Share followed by an immediate sub-division of each Consolidated Share into one New Ordinary Share of 0.05p each and one Deferred Share of 0.95p each. .

The Deferred Shares will not entitle their holders (a) to receive notice of or attend and vote at any general meeting of the Company; (b) to receive any dividend or other distribution; or (c) participate in any return of capital on a winding up other than the nominal amount paid up on such shares following a substantial distribution to holders of ordinary shares. No share certificates will be issued in respect of the Deferred Shares and no application will be made to the London Stock Exchange for them to be traded on AIM. The Deferred Shares are effectively valueless.

Further details of the proposed Capital Reorganisation are set out in Part II of this document.

As a result of the creation of the Deferred Shares, the Articles will need to be amended to reflect this.

The Capital Reorganisation and the amendment of the articles of association are subject to Shareholders' approval at the General Meeting, notice of which is set out at the end of this Document.

Application will be made for the New Ordinary Shares, which will number approximately 418 million, to be admitted to trading on AIM, and dealings are expected to commence at 8.00 on 8 March 2017.

3 Electronic Communications

As a result of the Companies Act 2006 (as amended) ("Act"), companies are now permitted to send or supply documents and information to shareholders in electronic form and via a website (subject to shareholder approval).

The main advantages to the Company of using electronic communications are:

· reduced printing and postal costs for the Company;

· the speed of the provision of information to Shareholders as Shareholders will be able to access communications from the Company on the day of publication rather than having to wait for postal delivery; and

· the environmental benefits from a reduction of paper for printing shareholder communications.

Under the AIM Rules, Shareholder approval is required to enable the Company to communicate with members by electronic form and/or website communications. The Company is therefore seeking Shareholder approval to enable the Company to make use of Electronic Communications.

In addition, under the Act and the AIM Rules, Shareholders must agree individually to be sent or supplied documents or information in electronic form or via the Company Website and, before the Company can send or supply documents or information to a member by making it available on the Company Website, members must be asked individually by the Company to agree that the Company may send or supply documents or information to them by means of the Company Website or by email.

If a Shareholder does not respond to the request within 28 days, the Company may treat this as deemed consent to receiving documents or information via the Company Website. The Company will notify the member (either in writing, or by other permitted means) when a relevant document or information is made available on the Company Website and a member can always request a hard copy version of the document or information.

Accordingly, you will find enclosed with this document a reply form requesting your consent to receive documents and information via a website and in electronic form. The reply form provides three options for future communication by the Company. If we do not receive a response from you within 28 days of the date of the letter, then you will be deemed to have agreed that the Company may send or supply documents and information to you via the Company Website. Further, if you agree to the Company sending or supplying documents or information to you in electronic form, please return the reply slip in the letter to the Company and provide your electronic address, for example, an e-mail address, for these purposes.

4 Business to be transacted at the General Meeting

You will find set out at the end of this Document a notice convening the General Meeting to be held at 200 Strand, London WC2R 1DJ at 10.30 a.m. on 7 March 2017.

The Resolutions to be proposed at the General Meeting are as follows:

Resolution 1 is proposed as a special resolution to amend the articles of association of the Company to create a new class of Deferred Shares in order for the Company to propose Resolution 2 to reorganise the share capital and reduce the number of ordinary shares in issue whilst maintaining the current nominal value per ordinary share of 0.05p each.

Resolution 2 is proposed as an ordinary resolution to implement the Consolidation and Subdivision. The effect of this resolution, if passed, is that the number of ordinary shares in issue will be reduced by a ratio of 20:1 to a level comparable to peer companies currently trading on AIM. The Deferred Shares created as a result of this exercise will have no value. Further details of the proposed Share Reorganisation is set out in Part II of this document.

Resolution 3 and 4 are ordinary and special resolutions to authorise the Directors to allot shares and grant rights to subscribe for new ordinary shares up to an aggregate nominal amount of £1,922,000 if Resolution 2 is not passed and the Share Reorganisation is not implemented, or up to an aggregate nominal amount of £96,100 if Resolution 2 is passed and the Share Reorganisation is implemented to: (i) satisfy the Company's obligations to Lind under the Funding Agreement (representing 14% of the TVR) ; (ii) to settle accrued but unpaid fees to members of the Board (representing 2% of the TVR); and generally to fund the opportunities outlined in Part I of the Document and general working capital requirements (representing 30% of the TVR).

The authorities to be granted pursuant to Resolutions 3 and 4 (inclusive) shall expire on the conclusion of the Annual General Meeting of the Company to be held in 2018 (unless renewed varied or revoked by the Company prior to or on that date).

Resolution 5 is proposed as a special resolution to give the Company the option to use electronic communications to send or supply documents or information to members by making them available on a website or other electronic means.

5 Action to be taken by Shareholders

Shareholders will find enclosed with this Document a Form of Proxy for use at the General Meeting. The Form of Proxy should be completed and returned in accordance with the instructions printed on it so as to reach the of Proxy for use at the meeting must be completed and returned so as to be received by the Share Registrars Ltd, The Courtyard, 17 West Street, Farnham, Surrey, GU9 7DR as soon as possible and in any event not later than 10.30 a.m. on 3 March 2017. Completion and the return of the Form of Proxy will not prevent Shareholders from attending and voting at the General Meeting should they so wish.

6 Recommendation

It is important for the Company to be able to meet its contractual obligations and to provide for working capital to support the investment opportunities outlined above. As a consequence the Board is seeking the authority to issue shares for the purposes of sustaining the underlying business and create opportunities for value growth. It is only with the support of Shareholders, coming from the approval of these authorities, that the Board can feel confident that it will be able to maintain the Company's licence-to-operate.

The Board unanimously believe that the proposals set out in the Resolutions are in the best interests of the Company and its Shareholders and unanimously recommend you to vote in favour of the Resolutions as they intend to do in respect of their own beneficial holdings in the Company, amounting in aggregate to 48,308,970 Ordinary Shares.

Yours faithfully

Neil Ritson

Executive Chairman and Chief Executive Officer

Qualified Person's Statement:

The information contained in this announcement has been reviewed and approved by Neil Ritson, Chief Executive Officer and Director for LGO Energy plc, who has over 38 years of relevant experience in the oil industry. Mr. Ritson is a member of the Society of Petroleum Engineers (SPE), an Active Member of the American Association of Petroleum Geologists (AAPG) and is a Fellow of the Geological Society of London (BGS).

Appendix III

Glossary of Terms

 Glossary