Placing, Acquisition and Issue of Equity

 8 August 2017

Mayan Energy Ltd / Index: AIM / Epic: MYN/ ISIN: VGG6622A1057 / Sector: Oil and Gas

Mayan Energy Ltd ("Mayan" or "the Company")

Placing, Issue of Equity, Acquisition of Interests; Introduction of New Personnel, and TVR

Mayan (AIM: MYN) is pleased to announce that it has completed a conditional placing of 287,000,000 new ordinary shares of no par value each ("the Ordinary Shares") in the capital of the Company at a placing price of 0.3 pence (the "Placing Price") per Ordinary Share (the "Placing Shares"), representing a premium of approximately 15% to the closing mid-market price of 0.26p, raising gross proceeds of £861,000 (the "Placing"). 

The Placing is anchored by two shareholders: AIM traded MX Oil plc who will acquire a 14.6% stake in the Company, by subscribing to 100,000,000 Ordinary Shares and David Kahn, a financial investor and key operational partner for Mayan who will acquire a 12.1% stake in the Company, by subscribing to 83,333,333 Ordinary Shares. Each of MX Oil plc and David Kahn have subscribed for shares at the Placing Price. The subscription by David Kahn is conditional on receipt of funds by the Company by 15 September 2017 and accordingly the Placing Shares to be issued to Mr Kahn (which will rank pari passu with the existing Ordinary Shares) will, subject to payment, be admitted to trading on AIM with dealings expected to commence on 19 September 2017 (the "Kahn Shares").

In addition, the Company has issued 61,794,872 Ordinary Shares at the Placing Price to settle certain outstanding liabilities and accrued adviser fees (the "Settlement Shares").

Furthermore, the Company has entered into an agreement to acquire a 70% working interest and 52.5% net revenue interest in two production leases in the Forest Hill Field, Wood County, Texas for a total spend of US$173,000. The Company also announces that it has added another professional advisor with a track record of success in the oil and gas industry to its development team. 

Acquisition Highlights

• Mayan has acquired from Longview Oil & Gas, LLC ("LOG") a 70.0% working interest and 52.5% net revenue interest in two leases in the Forest Hill Field, Wood County, Texas and also an initial 100% membership interest (potentially reducing to 50% as set out below) of Pergerson Energy, LLC, ("Pergerson"), a registered operator with the Railroad Commission of Texas[, the oil & gas regulatory in Texas] (operator number 653595) for:

o US$ 110,000 in cash of which US$30,000 has already been advanced to LOG with the remainder due by August 15, 2017; 

o Mayan's agreement to carry LOG to a maximum of US$63,000 of expenditure connected with the workover of the first six wells to be reworked (the "Initial Wells" all of which have been drilled in the last five years) and,

o Pergerson, will be used by Mayan to operate the assets and other than its registration as an operator with the Railroad Commission of Texas, has no other assets, liabilities or operations. Once the Forest Hill Field wells have been placed on Pergersen's Form P5 (required by the oil & gas regulator in Texas, the Texas Railroad Commission), by 6 September 2017 Mayan will sell 50% of Pergerson to LOG for US$ 25,000, such that that time Mayan and LOG will each have a 50% interest in Pergerson. 

• Whilst currently not producing, the Forest Hill Field has been historically prolific- there are more than 230 wells on the property- and the Company believes that there remains substantial oil in place which could be recoverable by implementation of a waterflood or other enhanced oil recovery programmes.

• The workover program is expected to be undertaken in three phases, being:

o August 2017: Phase 1- the workover of 6 initial wells with the objective of adding 60 barrels a day gross production from these wells which produced as recently as Q1 2016;

o 2017/18: Phase 2, workover of 50-70 wells; and

o 2018/19: Phase 3, workover of remaining X0-X0 wells by means of water flood to capture additional reserves and production.

• The Company expects to add substantial value to the property in Phase 1 and then to approach farm-out partners to aid in development costs associated with the Phase 2 and Phase 3 work plan where it expects each well to average 20 barrels per day of oil production following the workover;

• Gordon Johnson, Vice President at LOG, will join the Mayan team and will serve as geology and operations consultant providing geology, land management and operations services to the Company. Mr. Johnson is a specialist in remediation and recompletion of oil and gas wells in mature fields.

Placing Details

The Company has raised gross proceeds of £861,000 through the conditional placing of 287,000,000 Ordinary Shares at the Placing Price. The Placing is conditional on Admission and application will be made for the Placing Shares, which will rank pari passu with the existing Ordinary Shares, to be admitted to trading on AIM (the "Admission"). It is expected that Admission will become effective and dealings in the Placing Shares excluding the Kahn Shares (amounting to 203,666,667 Ordinary Shares in total) will commence on or around 21 August 2017.

As part of the Placing, a placing commitment of £300,000 was received from MX Oil plc, and from David Kahn whose holdings of shares in the Company, will following the issue of the Placing Shares, will comprise of 100,000,000 ordinary shares and 83,333,333 ordinary shares respectively, representing 14.6% and 12.1% of the enlarged issued share capital. Both investors have committed to three month lock-in periods in respect of their holdings of Ordinary shares.

Settlement Shares

In addition, Heriberto ('Eddie') Gonzalez Jr., Chief Executive Officer, has indicated to the Company an intention to increase his commitment to the company by taking 16,666,667, new Ordinary Shares at the Placing Price (£50,000) following completion of the Placing, such Ordinary Shares to be issued in settlement of accrued salary owed to Eddie Gonzalez. A further announcement will be made once this share issue is complete.

The Company has also issued 61,794,872 Ordinary Shares at the Placing Price to meet certain adviser and Consultant fees (the 'Settlement Shares').

Application will be made for the Settlement Shares, which will rank pari passu with the existing ordinary shares, to be admitted to trading on AIM ('Admission'). It is expected that Admission of the Settlement Shares will become effective and dealings will commence on or around 21 August 2017.

Use of Funds

The funds raised by the Placing will be used to:

· finance the Company's acquisition of Wilson & Wood County Fields from LOG and conclude the Initial phase of the work plan for these assets;

· finance incidental costs associated with the implementation of the work plan in Oklahoma whilst the farm-out partner will fund the substantial portion of actual oil and gas work, certain minimal regulatory and land management costs are to be borne by the company. These costs are not expected to exceed US$25,000.

· payment to legacy creditors not expected to be more than $100,000; and

· meet the Company's general working capital needs.

Eddie Gonzalez, CEO, commented: "This second acquisition and new member of our team affirms that the new Mayan story continues to unfold. With the two acquisitions in Texas and the farm-out previously announced in Oklahoma (see RNS of 17 July 2017) along with continued opportunistic development of Shoats Creek, we are in position to drive steady production growth from our diversified portfolio of oil and gas properties. Going forward, we are going to focus on the two Texas properties and our Oklahoma properties (the "Core Assets") where we believe we can drive more consistent production additions taking the company toward a sustainable cash flow positive position. The Core Assets are well suited to the skillsets of Messrs Kahn (David Kahn is a principal of LOG- see RNS of 21 July 2017) Johnson and Brock, who together will cornerstone the new oil and gas team we are developing. With the broad range of activity now unfolding we anticipate significant news flow over the next several weeks and months as we demonstrate to the market that Mayan is no longer a turn-around story but truly a production, revenue and cash flow growth story."

Total Voting Rights ("TVR")

Following the issue of the 203,666,667 Ordinary Shares (being the 287,000,000 Placing Shares less the Kahn Shares) and the 61,794,872 Settlement Shares, the Company's issued share capital will consist of 604,156,447 Ordinary Shares with voting rights. No Ordinary Shares are held in treasury at the date of this announcement and therefore following the Admission, the total number of Ordinary Shares in the Company with voting right will be 604,156,447.

The above total voting rights figure may be used by shareholders as the denominator for the calculation by which they will determine if they are required to notify their interest in, or a change to their interest in the Company.

In addition, in connection with the Placing the Company has agreed to award Cornhill Capital Limited, the Company's Broker and Placing Agent ('Cornhill') and a further direct subscriber, warrants over 28,825,000 Ordinary Shares valid for two years from the day of the Placing, which shall give Cornhill and the direct subscriber the right to acquire 28,825,000 Ordinary Shares of the Company at the Placing Price.

Special note concerning the Market Abuse Regulation

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No 596/2014 ("MAR"). Market soundings, as defined in MAR, were taken in respect of the Subscription, with the result that certain persons became aware of inside information, as permitted by MAR. That inside information is set out in this announcement. Therefore, those persons that received inside information in a market sounding are no longer in possession of inside information relating to the Company and its securities.

Qualified Person

The technical information that is contained in this announcement has been reviewed by Kevin Green, a Consultant to the Company and a Petroleum Geologist who is a suitably qualified person with over 30 years' experience in assessing hydrocarbon reserves and who has consented to the inclusion of the technical information. 

**ENDS**

For further information visit www.Mayanenergy.com or contact the following:

Notes:

Mayan Energy Limited is an AIM listed (London Stock Exchange) oil and gas energy Company; focussed on the redevelopment and enhancement of its upstream oil and gas interests in Oklahoma, Louisiana and Texas.