Placing

THIS ANNOUNCEMENT (INCLUDING THE APPENDICES) AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH IT WOULD BE UNLAWFUL TO DO SO.

Further, this announcement is for information purposes only and shall not constitute an offer to sell or issue or the solicitation of an offer to buy, subscribe for or otherwise acquire any new ordinary shares of Petroceltic International plc in any jurisdiction in which any such offer or solicitation would be unlawful.

Petroceltic International plc ("Petroceltic" or "the Company")

Proposed placing of new ordinary shares to raise approximately US$100 million (£59.7 million)

Petroceltic announces today its intention to raise approximately US$100 million (£59.7 million) through an issue of new ordinary shares of €0.3125 each ("Ordinary Shares") by way of a placing (the "Placing") with institutional investors (the "Placees"). The principal purpose of the Placing is to provide financial flexibility to pursue growth opportunities across Petroceltic's existing portfolio and also through new ventures, to bridge funding pending receipt of Sonatrach farm out proceeds and additional debt availability under the Senior Secured Facility and for general corporate purposes. The Company is also pleased to announce the participation of a new strategic shareholder for £30 million (approximately US$50 million) as part of the proposed Placing.

Details of the Placing

The Placing is being conducted, subject to the satisfaction of certain conditions, through an accelerated bookbuilding process to be carried out by J&E Davy ("Davy"), HSBC Bank plc ("HSBC") and Mirabaud Securities LLP ("Mirabaud", and together with Davy and HSBC, the "Joint Bookrunners"), each of which is acting as joint bookrunner in relation to the Placing. The book will open with immediate effect. The book is expected to close no later than 4.30 p.m. today, but may be closed earlier or later at the sole discretion of the Company and the Joint Bookrunners. The allocation, number of Ordinary Shares to be issued in the Placing (the "Placing Shares") and the price at which the Placing Shares are to be placed (the "Placing Price") will be agreed by the Company with the Joint Bookrunners at the close of the accelerated bookbuilding process. Details of the above will be announced as soon as practicable after the close of the bookbuilding process.

The Placing Shares will, when issued, be credited as fully paid and will rank pari passu in all respects with the existing Ordinary Shares, including the right to receive all dividends and other distributions declared, made or paid in respect of such shares after the date of issue of the Placing Shares. Subject to Shareholder approval in respect of the Second Tranche Placing (as defined below), the Placing will be made on a non-pre-emptive basis and accordingly Shareholders generally will not be offered a pro rata right to subscribe for the Placing Shares if such approval is given.

The Placing is being made in two tranches. Under the first tranche of the Placing ("First Tranche Placing"), 8,776,870 Ordinary Shares ("First Tranche Shares") will be allotted pursuant to the existing authority to issue new shares on a non-pre-emptive basis, which was granted to the Directors of the Company by Shareholders at the Company's annual general meeting held on 30 May 2013 (which amounted to 5 per cent of the Company's issued ordinary share capital as at 7 May 2013, being the date of the notice of the 2013 annual general meeting of the Company). The First Tranche Placing will be conditional upon, among other things: (i) admission of the First Tranche Shares to trading on AIM, a market operated by the London Stock Exchange ("AIM"), and to trading on the Enterprise Securities Market, a market operated by the Irish Stock Exchange ("ESM") ("Admission"), which is expected to occur on 21 May 2014, and (ii) on the Placing Agreement not having been terminated prior to Admission of the First Tranche Shares. Settlement for the First Tranche Shares is expected to take place on 21 May 2014.

The second tranche of the Placing ("Second Tranche Placing") will be conditional upon, among other things, the passing of the Resolution at an extraordinary general meeting ("EGM") of the Company, to be held at the Royal College of Physicians, 6 Kildare Street, Dublin 2, Ireland on 9 June 2014, on Admission of such Ordinary Shares ("Second Tranche Shares") to trading on AIM and ESM and on the Placing Agreement not having been terminated prior to Admission of the Second Tranche Shares.

Completion of the First Tranche Placing is not conditional on the completion of the Second Tranche Placing. The Placing is not being underwritten.

A circular, containing a notice of the EGM, will be sent shortly to the Shareholders outlining the terms of the Placing and seeking the necessary approval of the Shareholders to issue the Second Tranche Shares on a non-pre-emptive basis (the "Circular").

Application will be made to AIM and ESM for Admission of the Second Tranche Shares and, subject to the Resolution being passed at the EGM and satisfaction of the conditions referred to above, it is expected that Admission of the Second Tranche Shares will become effective on 10 June 2014.

Appendix I to this Announcement (which forms part of this Announcement) sets out the terms and conditions of the Placing and Appendix IV to this Announcement (which forms part of this Announcement) sets out certain risk factors relevant to investing in the Company. By choosing to participate in the Placing, Placees will be deemed to have read and understood this Announcement in its entirety (including the Appendices) and to be making an offer on the Terms and Conditions and providing the representations, warranties, acknowledgements and undertakings contained in the Appendices.

New Strategic Shareholder

As part of the proposed Placing, the Company is pleased to announce that Dovenby Capital Limited ("Dovenby") will invest £30 million (approximately US$50 million) by subscribing for Placing Shares in the Placing.

Dovenby is an investment company led by Dato' Ahmad Fuad, an experienced Malaysian oil and gas industry specialist. Mr. Fuad served as deputy chairman of Bumi Armada Berhad until his retirement in June 2013. Bumi Armada is a Malaysia-based international offshore oil field services provider that owns and operates Floating Production, Storage and Offloading units ("FPSOs") and Offshore Support Vessels ("OSVs") in Asia.

As part of the investment, Dovenby, the Company, Dato' Fuad and Datuk Abdul Farish (together the shareholders of Dovenby) will enter into an investment agreement (the "Investment Agreement"). Under the terms of the Investment Agreement, Dovenby will be entitled to appoint one non-executive director to the Board of the Company. Dovenby has also agreed not to sell its shares in the Company for a period of 180 days after the issue of the First Tranche Shares to it and to accept certain other obligations, including not increasing its shareholding in the Company beyond 15 per cent of its issued Ordinary Shares for three years without the Company's prior approval.

Further details of the proposed strategic investment by Dovenby and the Investment Agreement can be found in the section headed "Principal Terms of the Investment Agreement" in Appendix III to this Announcement.

Background to the Placing

Following the merger with Melrose Resources plc, which completed in October 2012, Petroceltic's strategic focus in 2013 was on the integration, delivery and the creation of a business organisation capable of sustained long term growth. Continued progress was made across the Company's main assets:

Algeria:

During 2013, Petroceltic made significant progress towards the development of the strategically important Ain Tsila gas condensate field, the development of which is the subject of the Isarene Production Sharing Contract ("Isarene PSC"), including the establishment of the Groupement Isarene ("Groupement"), which is a joint development organisation staffed by seconded personnel from Petroceltic, Enel and Sonatrach. At the end of the year, the Groupement issued invitations to tender for the Front End Engineering and Design ("FEED") studies and commercial work on the detailed gas sales agreement is near completion. The FEED study will be a critical input in the finalisation of both the detailed project costs and schedule. While no formal decisions have been taken to date, first gas now appears more likely to occur in 2018 than the previous estimate of late 2017.

The Company also agreed a farm out of a further 18.375 per cent interest in the Isarene PSC with Sonatrach for a consideration up to a maximum of US$180 million. The Company had agreed, subject to Sonatrach's pre-emption right, farm out terms for that 18.375 per cent interest with an international oil and gas company but Sonatrach exercised its contractual pre-emption right to acquire the 18.375 per cent interest. The consideration payable by Sonatrach comprises a US$20 million payment on completion of the transaction, a further US$140 million payment of Petroceltic's share of the Isarene project development costs from the effective date of 4 July 2013 and contingent payments of up to US$20 million if certain project related milestones are achieved. Formal completion of this farm out remains subject only to final ratification by the Algerian government authorities. Upon completion of the farm out, Sonatrach will hold a 43.375 per cent participating interest in the Isarene PSC, Petroceltic (as operator) will hold 38.25 per cent and Enel will hold the remaining 18.375 per cent.

Egypt:

During the fourth quarter of 2013, the ratification process for the award of the El Qa'a Plain exploration licence was completed, followed by ratification of two further new licences to the Group, North Thekah and South Idku, in early January 2014. The addition of these new licences has increased the Group's core exploration acreage position in Egypt by over 300 per cent.

The Company's production performance continued to be strong in 2013, and it was able to support occasional requests from the Egyptian government to supply additional gas to support increased domestic demand. The Company also successfully completed a number of important facilities investments, which will enhance the value of future production by enabling incremental liquids recovery.

The Company also commenced drilling of an exploration well on the South Dikirnis prospect on 2 May 2014. The well is targeting a potential oil and gas bearing prospect within the West Dikirnis licence (Petroceltic, operator, 100 per cent) adjacent to existing facilities and infrastructure. The South Dikirnis prospect has a gross mean unrisked prospective resource of 7.6 MMboe. The well is scheduled to reach total depth in early June 2014.

Kurdistan Region of Iraq:

Activities in 2013 were principally focussed on rig contracting, permitting, civil engineering and well site preparation works ahead of the spudding of the Shakrok-1 well in August and in preparation for the spudding of the Shireen well on the Dinarta block this year. Both wells have very significant resource potential, are located close to analogous discoveries in adjacent acreage and have multiple exploration targets.

On the Shakrok licence (Petroceltic 16 per cent, Hess Corporation (operator) 64 per cent and Kurdistan Regional Government 20 per cent), the Group announced in April 2014 that the Shakrok-1 well had reached its total depth of 3,538 metres and that a total of four potential oil-bearing Jurassic zones had been selected for testing. On 8 May 2014, the Group announced that two of the selected four zones had flowed formation water to surface with no hydrocarbons. The Company plans to proceed with testing the remaining two zones and testing operations are planned to continue until late May. On the Dinarta licence (Petroceltic 16 per cent, Hess Corporation (operator) 64 per cent and Kurdistan Regional Government 20 per cent), preparations for drilling continue and the Shireen-1 well is expected to commence drilling in the next two to three weeks. The well is forecast to take circa 150 days of drilling to reach its forecast total depth. The well is targeting oil in both the Jurassic and Triassic formations, with mean unrisked gross prospective oil resources of 706 MMbbls.

Other Assets:

In Bulgaria, the Company invested over US$40 million relating to development in 2013, with the majority of this capital focused on the sub-sea tie-back of the Kaliakra-1 discovery well, which commenced production in September, and some advance pipe lay work in preparation for the Kavarna East development in 2015.

In Romania, recent discoveries offshore have materially increased the level of Black Sea exploration activity and proven the existence of a high quality gas province. Following drilling of the South Cobalcescu-1 well in 2013, the Company has continued its work programme on its other licences during 2014. The Muridava-1 exploration well was initiated on the Muridava Licence (Petroceltic 40 per cent (operator), Sterling Resources 40 per cent, Petromar 20 per cent) on 11 April 2014. The well is expected to take two months to complete and is targeting mean unrisked gross prospective resources of 185 Bcf.

Petroceltic also has a highly prospective portfolio offshore of Italy, most notably including the Elsa discovery, and it is finalising a new environmental impact assessment and detailed drilling and testing plan for this project. On the onshore Carpignano Sesia prospect, Petroceltic continues to work with Eni as operator with a view to potentially commencing drilling activities in 2015.

In Greece, a consortium including Petroceltic successfully applied for the Patraikos block, offshore of western Greece, an under-explored area which has a proven petroleum system. During the initial three year concession period, the consortium will undertake seismic acquisition and other geological studies aimed at high grading existing leads and prospects for possible future drilling.

Proposed Step-Up

As was announced in the preliminary results announcement, which was also published today, the Company intends for an application to be made for a listing of shares in a new holding company for the Group on the standard listing segment of the Official List of the UKLA and for a listing on the secondary segment of the Official List of the Irish Stock Exchange. This process has recently commenced and listing is expected to become effective in the third quarter of 2014, to be preceded by an extraordinary general meeting of the Company to seek Shareholder approval for the insertion of such new holding company for the Group as part of the new listing.

Use of Proceeds

The net proceeds of the Placing will be used: (i) to provide financial flexibility to pursue growth opportunities by funding a potentially accelerated programme in the Kurdistan Region of Iraq and certain cost increases, advancing plans for recently acquired licences in Egypt and Greece and pursuing new ventures that are under evaluation, with potential bolt on acquisitions to be selectively considered, (ii) to bridge funding pending receipt of Sonatrach farm out proceeds (due upon completion of the agreed sale of an 18.375 per cent interest in the Isarene PSC in Algeria) and also additional debt availability under the Senior Secured Facility, and (iii) for general corporate purposes.

Brian O'Cathain, Chief Executive of Petroceltic commented:

"The proceeds of this Placing will provide the Company with the financial flexibility to undertake all its currently planned exploration programmes, continue the current pace of progress on the Isarene PSC pending completion of the second farmout to Sonatrach and to maintain an appropriate balance of debt and equity funding within the business."

"Furthermore, we are delighted to welcome Dovenby as a new shareholder in Petroceltic. With the extensive experience of Dato' Fuad and his colleagues in international oilfield development and their track record of successful investments in the oil and gas sector, we believe their investment is a further endorsement of Petroceltic's strategy and growth plans."

The expected timetable of principal events in connection with the Placing is as follows:

Update on Legal Proceedings

In July 2013, the Company issued legal proceedings in the High Court of Ireland against two former consultants to the Company, Mr Seghir Maza and Mr Samir Abdelly, and against Abdelly Associés International Consulting Limited ("AAIC"), a Tunisian company owned and controlled by Mr Abdelly (together, "the Consultants"), seeking to set aside a number of consultancy and services agreements entered into in 2004 and 2005 with respect to the Company's business activities in Algeria. The proceedings also seek the return of significant payments that were made to Mr Abdelly and Mr Maza under those agreements.

The Company's action followed the receipt of correspondence, sent on behalf of AAIC during 2013, threatening legal proceedings against the Company and seeking payment of the sum of US$3.4 million pursuant to these agreements. The agreements contain provisions under which the Consultants could make claims for further material payments from the Company.

In November 2013, the High Court of Ireland granted the Company judgment, in default of appearance, against Mr Maza and granted all reliefs sought by the Company against him in the proceedings, including an order that the agreements between Mr Maza and the Company be declared void and that the Company be entitled to recover US$4.7 million from Mr Maza, being amounts previously paid under one of the agreements, plus interest from the date of judgment. The proceedings against Mr Abdelly and AAIC are on-going and the ultimate outcome of these proceedings, by their nature, remain subject to inherent uncertainty.

Further details on the legal proceedings are contained in Appendix II of this Announcement and on the risks to the Group associated with the agreements with the Consultants and the current legal proceedings are contained in Appendix IV of this Announcement.

Enquiries:

Petroceltic

Davy

HSBC

Mirabaud

Pelham Bell Pottinger

Murray Consultants

THE MATERIAL SET FORTH HEREIN IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT INTENDED, AND SHOULD NOT BE CONSTRUED, AS AN OFFER OF SECURITIES FOR SALE IN THE UNITED STATES OR ANY OTHER JURISDICTION. THE SECURITIES OF THE COMPANY DESCRIBED HEREIN HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR WITH ANY REGULATORY AUTHORITY OR UNDER THE LAWS OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES, AND MAY NOT BE OFFERED, SOLD, RE-SOLD, TRANSFERRED OR DELIVERED, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, EXCEPT PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND OTHERWISE IN COMPLIANCE WITH THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES. NEITHER THE US SECURITIES AND EXCHANGE COMMISSION NOR ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES HAS APPROVED OR DISPROVED OF AN INVESTMENT IN THE PLACING SHARES OR PASSED UPON OR ENDORSED THE MERITS OF THE PLACING OR THE ACCURACY OR ADEQUACY OF THE CONTENTS OF THIS ANNOUNCEMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENCE IN THE UNITED STATES.

This Announcement should be read in conjunction with the preliminary results announcement which was published today (the "Results Announcement"). In particular, your attention is drawn to the "Important Notices" section of this Announcement, to the detailed terms and conditions of the Placing and further information relating to the Bookbuild described in Appendix I, and to the risk factors described in Appendix IV. By choosing to participate in the Placing and by making an oral and legally binding offer to acquire Placing Shares, investors will be deemed to have read and understood this Announcement in its entirety and to be making such offer on the terms and subject to the conditions in it, and to be providing the representations, warranties, acknowledgements and undertakings contained in Appendix I.

This Announcement contains (or may contain) certain forward-looking statements with respect to certain of the Company's plans and its current goals and expectations, financial condition and performance and which involve a number of risks and uncertainties. The Company cautions readers that no forward-looking statement is a guarantee of future performance and that actual results could differ materially from those contained in the forward-looking statements. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements sometimes use words such as "aim", "anticipate", "target", "expect", "estimate", "intend", "plan", "goal", "believe", or other words of similar meaning. Examples of forward-looking statements include, amongst others, statements regarding the Company's probable, inferred or contingent oil resources or reserves, future financial position, income growth, impairment charges, business strategy, projected costs, estimates of capital expenditure, and plans, dividend growth and objectives for future operations of the Company and other statements that are not historical fact. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances, including, but not limited to, UK, Irish, Algerian, Egyptian, Kurdistan Region of Iraq and global economic and business conditions, the effects of continued volatility in credit markets, market-related risks such as changes in commodity prices, interest rates and foreign exchange rates, the policies and actions of governmental and regulatory authorities, changes in legislation, the further development of standards and interpretations under International Financial Reporting Standards ("IFRS") applicable to past, current and future periods, evolving practices with regard to the interpretation and application of standards under IFRS, the outcome of pending and future litigation or regulatory investigations, the success of future exploration, appraisal, development, acquisitions and other strategic transactions and the impact of competition. A number of these factors are beyond the Company's control. As a result, the Company's actual future results may differ materially from the plans, goals, and expectations set forth in the Company's forward-looking statements. Given these risks and uncertainties, prospective investors are cautioned not to place undue reliance on forward-looking statements which are not guarantees of future performance. Any forward-looking statements made in this Announcement by or on behalf of the Company speak only as of the date they are made. Neither the Company nor the Joint Bookrunners undertake any obligation nor do they intend to revise or update any forward-looking statements in this Announcement to reflect events or circumstances after the date of this Announcement (except, in the case of the Company, to the extent required by the London Stock Exchange, the Irish Stock Exchange or by applicable law or regulation). Forward-looking statements in this Announcement are current only as of the date on which such statements are made. None of the future projections, expectations, estimates or prospects in this Announcement should be taken as forecasts or promises nor should they be taken as implying any indication, assurance or guarantee that the assumptions on which such future projections, expectations, estimates or prospects have been prepared are correct or exhaustive or, in the case of the assumptions, fully stated in the Announcement. As a result of these risks, uncertainties and assumptions, the recipient should not place undue reliance on these forward-looking statements as a prediction of actual results or otherwise. For a more detailed description of the risks and uncertainties, please see the risk factors discussed attached as Appendix IV hereto.

This Announcement (including the Appendices) is for information purposes only and shall not constitute an offer to buy, sell, issue, or subscribe for, or the solicitation of an offer to buy, sell, issue, or subscribe for any securities, nor shall there be any sale of securities in the United States, Australia, Canada, South Africa, Japan or any other jurisdiction in which such offer, solicitation or sale is or may be unlawful (a "Prohibited Jurisdiction"). This Announcement and the information contained herein are not for release, publication or distribution, directly or indirectly, to persons in a Prohibited Jurisdiction unless permitted pursuant to an exemption under the relevant local law or regulation in any such jurisdiction. This Announcement has been issued by and is the sole responsibility of the Company.

The distribution of this Announcement and the offering of the Placing Shares in certain jurisdictions may be restricted by law or regulation. No action has been taken by the Company or the Joint Bookrunners or any of their respective Affiliates that would permit an offering of Placing Shares or possession or distribution of this Announcement or any other offering or publicity material relating to Placing Shares in any jurisdiction where action for that purpose is required. Persons into whose possession this Announcement comes are required by the Company and the Joint Bookrunners to inform themselves about and to observe such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

No representation or warranty, express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by the Joint Bookrunners or by any of their respective Affiliates, directors, officers, employees or agents as to, or in relation to, the contents of this Announcement, including the Appendices, or any other written or oral information made available to or publicly available to any interested party or its advisers, and any responsibility or liability therefor is expressly disclaimed.

Davy, which is regulated in Ireland by the Central Bank of Ireland, is acting for the Company and for no-one else in connection with the Placing, and will not be responsible to anyone other than the Company for providing the protections afforded to clients of Davy or for providing advice to any other person in relation to the Placing or any other matter referred to herein. Apart from the responsibilities and liabilities, if any, which may be imposed upon Davy by the Financial Services and Markets Act 2000 or the regulatory regime established thereunder, Davy does not accept any responsibility whatsoever or makes any representation or warranty, express or implied, concerning the contents of this Announcement, including its accuracy, completeness or verification, or concerning any other statement made or purported to be made by it, or on its behalf, in connection with the Company, the Placing Shares or the Placing, and nothing in this Announcement is, or shall be relied upon as, a promise or representation in this respect, whether as to the past or future. Davy accordingly disclaims, to the fullest extent permitted by law, all and any responsibility and liability whether arising in tort, contract or otherwise (save as referred to herein) which it might otherwise have in respect of this Announcement or any such statement.

HSBC, which is authorised by the Prudential Regulatory Authority and regulated in the United Kingdom by the Prudential Regulatory Authority and the Financial Conduct Authority, is acting for the Company and for no-one else in connection with the Placing, and will not be responsible to anyone other than the Company for providing the protections afforded to clients of HSBC or for providing advice to any other person in relation to the Placing or any other matter referred to herein. Apart from the responsibilities and liabilities, if any, which may be imposed upon HSBC by the Financial Services and Markets Act 2000 or the regulatory regime established thereunder, HSBC does not accept any responsibility whatsoever or makes any representation or warranty, express or implied, concerning the contents of this Announcement, including its accuracy, completeness or verification, or concerning any other statement made or purported to be made by it, or on its behalf, in connection with the Company, the Placing Shares or the Placing, and nothing in this Announcement is, or shall be relied upon as, a promise or representation in this respect, whether as to the past or future. HSBC accordingly disclaims, to the fullest extent permitted by law, all and any responsibility and liability whether arising in tort, contract or otherwise (save as referred to herein) which it might otherwise have in respect of this Announcement or any such statement.

Mirabaud, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting for the Company and for no-one else in connection with the Placing, and will not be responsible to anyone other than the Company for providing the protections afforded to clients of Mirabaud or for providing advice to any other person in relation to the Placing or any other matter referred to herein. Apart from the responsibilities and liabilities, if any, which may be imposed upon Mirabaud by the Financial Services and Markets Act 2000 or the regulatory regime established thereunder, Mirabaud does not accept any responsibility whatsoever or makes any representation or warranty, express or implied, concerning the contents of this Announcement, including its accuracy, completeness or verification, or concerning any other statement made or purported to be made by it, or on its behalf, in connection with the Company, the Placing Shares or the Placing, and nothing in this Announcement is, or shall be relied upon as, a promise or representation in this respect, whether as to the past or future. Mirabaud accordingly disclaims, to the fullest extent permitted by law, all and any responsibility and liability whether arising in tort, contract or otherwise (save as referred to herein) which it might otherwise have in respect of this Announcement or any such statement.

The price of the Company's Ordinary Shares and the income from them (if any) may go down as well as up and investors may not get back the full amount invested on disposal of such shares. No statement in this Announcement is intended to be a profit forecast or profit estimate and no statement in this Announcement should be interpreted to mean that earnings per share of the Company for current or future financial years would necessarily match or exceed historical earnings per share of the Company.

IMPORTANT NOTICES

MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THIS ANNOUNCEMENT (INCLUDING THE APPENDICES) AND THE TERMS AND CONDITIONS SET OUT HEREIN ARE FOR INFORMATIONAL PURPOSES ONLY AND ARE DIRECTED ONLY AT PERSONS WHO ARE: (A) (I) INVESTMENT PROFESSIONALS FALLING WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 (THE "ORDER"), OR (II) PERSONS FALLING WITHIN ARTICLE 49(2)(A) TO (D) ("HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC") OF THE ORDER, OR (III) PERSONS TO WHOM IT MAY OTHERWISE BE LAWFULLY COMMUNICATED; AND (B) (I) PERSONS IN MEMBER STATES OF THE EUROPEAN ECONOMIC AREA WHO ARE QUALIFIED INVESTORS (AS DEFINED IN ARTICLE 2(1)(E) OF EU DIRECTIVE 2003/71/EC, AS AMENDED (THE "PROSPECTUS DIRECTIVE")) (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS"). THIS ANNOUNCEMENT (INCLUDING THE APPENDICES) AND THE TERMS AND CONDITIONS SET OUT IN THIS ANNOUNCEMENT MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS ANNOUNCEMENT (INCLUDING THE APPENDICES) AND THE TERMS AND CONDITIONS SET OUT IN THIS ANNOUNCEMENT RELATE IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. THIS ANNOUNCEMENT (INCLUDING THE APPENDICES) DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN THE COMPANY.

Persons (including individuals, funds or otherwise) by whom or on whose behalf a commitment to subscribe for Placing Shares has been given ("Placees") will be deemed to have read and understood this Announcement, including the Appendices, in its entirety and to be making such offer on the Terms and Conditions, and to be providing the representations, warranties, acknowledgements and undertakings contained in the Appendices. In particular, each such Placee represents, warrants and acknowledges that it is: (i) a Relevant Person (as defined above) and undertakes that it will subscribe for, hold, manage or dispose of any Placing Shares that are allocated to it for the purposes of its business; and (ii) outside the United States and is subscribing for the Placing Shares for its own account or is acquiring the Placing Shares for an account with respect to which it exercises sole investment discretion in an "offshore transaction" (as such term is defined in Regulation S under the Securities Act).

The Placing Shares referred to in this Announcement are being offered and sold outside the United States in "offshore transactions" (as defined in and pursuant to Regulation S under the Securities Act. Any offering to be made in the United States will be made to a limited number of "qualified institutional buyers" ("QIBs") as defined in Rule 144A under the Securities Act and pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. No public offering of securities of the Company will be made in connection with the Placing in the United Kingdom, Ireland, the United States, Australia, Canada, Japan, South Africa or elsewhere.

The relevant clearances have not been, and nor will they be, obtained from the securities commission of any province or territory of Canada; no prospectus has been lodged with, or registered by, the Australian Securities and Investments Commission or the Japanese Ministry of Finance; and the Placing Shares have not been, and nor will they be, registered under the securities laws of any state, province or territory of Australia, Canada, South Africa or Japan.

Accordingly, the Placing Shares may not (unless an exemption under the relevant securities laws is applicable) be offered, sold, resold or delivered, directly or indirectly, in or into the United States, Australia, Canada, South Africa, Japan or any other jurisdiction outside the United Kingdom and Ireland.

Persons (including, without limitation, nominees and trustees) who have a contractual or other legal obligation to forward a copy of the Appendices or this Announcement should seek appropriate advice before taking any action.

The Placing Shares to be issued pursuant to the Placing will not be admitted to trading on any stock exchange other than AIM and the ESM. Neither the content of the Company's website nor any website accessible by hyperlinks on the Company's website is incorporated in, or forms part of, this Announcement.

APPENDIX I:

TERMS AND CONDITIONS OF THE PLACING

IMPORTANT INFORMATION FOR PLACEES ONLY REGARDING THE PLACING

Details of the Placing

The Joint Bookrunners have today entered into the Placing Agreement under which, subject to the conditions set out in that agreement, the Joint Bookrunners, as agents for and on behalf of the Company, have agreed to use their reasonable endeavours to procure placees for the Placing Shares at a price to be determined following completion of the accelerated bookbuilding process in respect of the Placing (the "Bookbuild"), described in this Announcement and provided for in the Placing Agreement. The Placing is not being underwritten.

The Placing Shares will, when issued, be credited as fully paid and will rank pari passu in all respects with the existing issued Ordinary Shares.

The First Tranche Shares will be issued free of any pre-emption rights, encumbrance, lien or other security interest. The Second Tranche Shares will, subject to approval by the Shareholders at the EGM, be issued free of any pre-emption rights, encumbrance, lien or other security interest.

As part of the Placing, the Company has agreed with the Joint Bookrunners that it will not issue or sell any Ordinary Shares for a period of 180 days after Admission of the Second Tranche Shares, without the prior consent of the Joint Bookrunners. This agreement is subject to customary exceptions and does not prevent the Company from granting or satisfying exercises of options granted pursuant to the terms of existing employee share schemes of the Company, as disclosed in publicly available information relating to the Company.

Application for admission to trading

Application will be made to AIM and ESM for Admission of the First Tranche Shares, which is expected to occur on 21 May 2014. The First Tranche Shares will be allotted pursuant to the existing authority to issue new shares on a non-pre-emptive basis, which was granted to the Directors of the Company by Shareholders at the Company's annual general meeting held on 30 May 2013.

Admission of the Second Tranche Shares is conditional upon the passing of the Resolution at the EGM, which is proposed to be convened for on or around 9 June 2014. It is expected that Admission of the Second Tranche Shares will become effective on or around 10 June 2014 and that dealings in the Second Tranche Shares will commence at that time.

The Bookbuild

The Joint Bookrunners will today commence the Bookbuild to determine demand for participation in the Placing by Placees. This Appendix gives details of the terms and conditions of, and the mechanics of participation in, the Placing. No fees or commissions will be paid to Placees or by Placees in respect of any Placing Shares.

The Joint Bookrunners will be entitled to effect the Placing by such alternative method to the Bookbuild as they may, in their sole discretion, and with the Company's prior approval, determine.

Participation in, and principal terms of, the Placing

1. The Joint Bookrunners are acting as joint bookrunners and as agents of the Company.

2. Participation in the Placing will only be available to persons who may lawfully be, and are, invited to participate by the Joint Bookrunners. The Joint Bookrunners and their respective Affiliates are each entitled to enter bids in the Bookbuild as principal.

3. The Bookbuild will establish the Placing Price and the number of Placing Shares. The Placing Price and the number of Placing Shares to be issued will be agreed between the Joint Bookrunners and the Company following completion of the Bookbuild. The Placing Price and the number of Placing Shares will be announced on a Regulatory Information Service following the completion of the Bookbuild and agreement between the Joint Bookrunners and the Company as to the number of Placing Shares.

4. To bid in the Bookbuild, Placees should communicate their bid by telephone to their usual sales or equity capital markets contact at one of the Joint Bookrunners. Each bid should state the number of Placing Shares which the prospective Placee wishes to subscribe for at either the Placing Price, which is ultimately established by the Company and the Joint Bookrunners, or at prices up to a price limit specified in its bid. Bids may be scaled down by the Joint Bookrunners on the basis referred to in paragraph 9 below. The Joint Bookrunners reserve the right not to accept bids or to accept bids in part rather than in whole. The acceptance of the bids shall be at the Joint Bookrunners' absolute discretion.

5. The Bookbuild is expected to close no later than 4.30 p.m. (London time) on 16 May 2014 but may be closed earlier or later at the sole discretion of the Joint Bookrunners and the Company. The Joint Bookrunners may, in their sole discretion, accept bids that are received after the Bookbuild has closed. The Company reserves the right (with the agreement of the Joint Bookrunners) to reduce or seek to increase the amount to be raised pursuant to the Placing, in its absolute discretion.

6. Each prospective Placee's allocation will be agreed between the Joint Bookrunners and the Company and will be confirmed orally by one of the Joint Bookrunners as agent of the Company following the close of the Bookbuild. That oral confirmation will constitute an irrevocable legally binding commitment of that person (who will at that point become a Placee) in favour of the Company and the Joint Bookrunners to subscribe for the number of Placing Shares allocated to it at the Placing Price on these Terms and Conditions and in accordance with the Company's articles of association.

7. Each prospective Placee's allocation and commitment will be evidenced by a contract note issued to such Placee by one of the Joint Bookrunners. These Terms and Conditions will be deemed incorporated into that contract note.

8. Each Placee will also have an immediate, separate, irrevocable and binding obligation, owed to the Joint Bookrunners (as agents of the Company), to pay to the Joint Bookrunners (or as they may direct) in cleared funds, at the time set out in paragraph 12, an amount equal to the product of the Placing Price and the number of Placing Shares such Placee has agreed to subscribe for and the Company has agreed to allot and issue to that Placee. Each Placee's obligation will be owed to the Company and to the Joint Bookrunners. The Company shall allot such Placing Shares to each Placee following each Placee's payment to the Joint Bookrunners of such amount and, in the case of the Second Tranche Shares, subject to the passing of the Resolution.

9. Subject to paragraphs 4 and 5 above, the Joint Bookrunners may choose to accept bids, either in whole or in part, on the basis of allocations determined in agreement with the Company and may scale down any bids for this purpose on such basis as they may determine. The Joint Bookrunners may also, notwithstanding paragraphs 4 and 5 above, subject to the prior consent of the Company (i) allocate Placing Shares after the time of any initial allocation to any person submitting a bid after that time and (ii) allocate Placing Shares after the Bookbuild has closed to any person submitting a bid after that time. The acceptance of offers shall be at the absolute discretion of the Joint Bookrunners.

10. A bid in the Bookbuild will be made on the terms and subject to the conditions in this Announcement and will be legally binding on the Placee on behalf of which it is made and, except with the consent of the Joint Bookrunners, will not be capable of variation or revocation after the time at which it is submitted.

11. Except as required by law or regulation, no press release or other announcement will be made by the Joint Bookrunners or the Company using the name of any Placee (or its agent), in its capacity as Placee (or agent), other than with such Placee's prior written consent.

12. Irrespective of the time at which a Placee's allocation pursuant to the Placing is confirmed, settlement for Placing Shares to be subscribed for pursuant to the Placing will be required to be made at the time required in respect of each tranche, on the basis explained below under "Registration and Settlement".

13. All obligations under the Bookbuild and Placing will be subject to fulfilment of the conditions referred to below under "Conditions of the Placing" and to the Placing not being terminated on the basis referred to below under "Termination of the Placing Agreement".

14. By participating in the Bookbuild, each Placee will agree that its rights and obligations in respect of the Placing will terminate only in the circumstances described below and will not be capable of rescission or termination by the Placee.

15. To the fullest extent permissible by law, none of the Joint Bookrunners nor any of their respective Affiliates nor any person acting on their behalf shall have any responsibility or liability to any Placee (or to any other person whether acting on behalf of a Placee or otherwise). In particular, none of the Joint Bookrunners nor any of their respective Affiliates nor any person acting on behalf of any of them shall have any responsibility or liability (including to the fullest extent permissible by law, any fiduciary duties) in respect of the Joint Bookrunners' conduct of the Bookbuild or of such alternative method of effecting the Placing as the Joint Bookrunners may determine.

Conditions of the Placing

The Placing is conditional upon the Placing Agreement becoming unconditional and not having been terminated in accordance with its terms. The obligations of the Joint Bookrunners under the Placing Agreement are conditional on, amongst other things:

A. there not having been a material adverse change in, or any development reasonably likely to result in a material adverse change in or affecting, the condition, financial, operational or otherwise, or in the earnings, management, business affairs, solvency or prospects of the Company or any other member of the Group, whether or not foreseeable and whether or not arising in the ordinary course of business since the date of the Placing Agreement;

B. agreement being reached between the Company and the Joint Bookrunners on the Placing Price and the number of Placing Shares, and the publication by the Company of a pricing announcement;

C. in respect of the Second Tranche Placing only, the passing of the Resolution, without amendment, at the EGM;

D. the representations, warranties and agreements of the Company contained in the Placing Agreement being true, accurate and not misleading on the date of the Placing Agreement, on the date that the Placing Price and the number of Placing Shares is agreed and on each Admission;

E. the Company complying in all material respects with its obligations under the Placing Agreement to the extent the same fall to be performed or satisfied prior to each Admission and the Joint Bookrunners receiving a certificate from the Company confirming such is the case and confirming that the representations and warranties given pursuant to the Placing Agreement are true and accurate;

F. the Company allotting, subject only to the relevant Admission, the Placing Shares in accordance with the Placing Agreement; and

G. Admission of the First Tranche Shares taking place by 8.00 a.m. (London time) on 21 May 2014 and Admission of the Second Tranche Shares taking place by 8:00 a.m. (London time) on 10 June 2014 (or such later date as the Company and the Joint Bookrunners may otherwise agree).

If (i) any of the conditions contained in the Placing Agreement in relation to the Placing Shares are not fulfilled or, where permitted, waived by the Joint Bookrunners, by the respective time or date where specified (or such later time and/or date as the Company and the Joint Bookrunners may agree), or (ii) the Placing Agreement is terminated in the circumstances specified below, the Placing will not proceed and each Placee's rights and obligations hereunder in relation to the Placing Shares shall cease and terminate at such time and each Placee agrees that no claim can be made by or on behalf of the Placee in respect thereof.

The Joint Bookrunners may, at their discretion and upon such terms as they think fit, waive compliance by the Company with the whole or any part of any of the Company's obligations in relation to the conditions in the Placing Agreement, save that the conditions in the Placing Agreement relating to Admission taking place, the publication of the pricing announcement, the Resolution being passed and the allotment of the Placing Shares may not be waived. Any such extension or waiver will not affect Placees' commitments as set out in this Announcement.

None of the Joint Bookrunners, the Company or any other person shall have any responsibility or liability to any Placee (or to any other person whether acting on behalf of a Placee or otherwise) in respect of any decision made as to whether or not to waive or to extend the time and / or the date for the satisfaction of any condition to the Placing nor for any decision made as to the satisfaction of any condition or in respect of the Placing generally, and by participating in the Placing each Placee agrees that any such decision is within the absolute discretion of the Joint Bookrunners (and, where applicable, the Company).

By participating in the Bookbuild, each Placee agrees that its rights and obligations hereunder terminate only in the circumstances described above and under "Termination of the Placing Agreement" below, and will not be capable of rescission or termination by the Placee.

Termination of the Placing Agreement

Each Joint Bookrunner is entitled, at any time before each Admission, to terminate the Placing Agreement in relation to their obligations in respect of the Placing by giving notice to the Company if, amongst other things:

A. there has been a breach or an alleged breach by the Company of any of the warranties and representations contained in the Placing Agreement or any failure by the Company to perform any of the undertakings or agreements in the Placing Agreement; or

B. it shall come to the notice of the Joint Bookrunners that any statement contained in this Announcement, the Circular or any other document or announcement issued or published by or on behalf of the Company in connection with the Placing (together the "Placing Documents"), or any of them, is or has become untrue, incorrect or misleading in any respect, or any matter has arisen, which would, if the Placing were made at that time, constitute a material omission from the Placing Documents, or any of them, and which in the good faith opinion of the Joint Bookrunners is material; or

C. in the good faith opinion of the Joint Bookrunners, there has been, or the Joint Bookrunners have become aware of, or there has been made public, a material adverse change in, or any development reasonably likely to result in a material adverse change in, or affecting the condition, financial, operational, legal or otherwise, or in the earnings, management, business affairs, solvency or prospects of the Company or any member of the Group, whether or not foreseeable and whether or not arising in the ordinary course of business since the date of the Placing Agreement, the effect of which is such as to make it, in the good faith judgment of any Joint Bookrunner, impracticable or inadvisable to market the Placing Shares or to enforce contracts for the sale of the Placing Shares; or

D. there has occurred (i) any material adverse change in the financial markets in the United States, the United Kingdom, member states of the European Union or in the international financial markets, (ii) any outbreak or escalation of hostilities, act of terrorism or other calamity or crisis or (iii) any change or development involving a prospective change in national, United Kingdom, Algerian or international political, financial or economic conditions, or currency exchange rates, in each case the effect of which is such as to make it, in the good faith judgement of the Joint Bookrunners, impracticable or inadvisable to market the Placing Shares or to enforce contracts for the sale of the Placing Shares; or

E. the quotation of the Ordinary Shares on AIM or the ESM has been cancelled, or trading in any shares in the Company has been suspended or limited by the London Stock Exchange or the Irish Stock Exchange, or if trading generally on the London Stock Exchange, on the Irish Stock Exchange or the New York Stock Exchange has been suspended or limited, or there are certain other disruptions, limitations or suspensions in respect of the operations of certain stock exchanges or a banking moratorium is declared by certain authorities.

Upon such termination, the parties to the Placing Agreement shall be released and discharged (except for any liability arising before or in relation to such termination) from their respective obligations under or pursuant to the Placing Agreement subject to certain exceptions.

By participating in the Placing, Placees agree that the exercise by the Joint Bookrunners (or any of them) of any right of termination or other discretion under the Placing Agreement shall be within the absolute discretion of the Joint Bookrunners and that they need not make any reference to Placees in this regard and that, to the fullest extent permitted by law, the Joint Bookrunners shall have no responsibility or liability to Placees whatsoever in connection with any such exercise or failure so to exercise.

No offering document

No offering document, prospectus or admission document has been or will be prepared in relation to the Placing and Placees' commitments will be made solely on the basis of publicly available information taken together with the information contained in this Announcement (including this Appendix) released by the Company today, and any Exchange Information (as defined below) previously published by the Company and subject to the further terms set forth in the contract note to be provided to individual prospective Placees.

Each Placee, by accepting a participation in the Placing, agrees that the content of this Announcement (including this Appendix) and the publicly available information released by or on behalf of the Company is exclusively the responsibility of the Company and confirms that it has neither received nor relied on any other information, representation, warranty, or statement made by or on behalf of the Company (other than publicly available information) or the Joint Bookrunners or their respective Affiliates (other than the amount of the relevant Placing participation in the oral confirmation given to Placees and the contract note referred to below) or any other person and none of the Joint Bookrunners, their respective Affiliates, any persons acting on their behalf or the Company nor any other person will be liable for any Placee's decision to participate in the Placing based on any other information, representation, warranty or statement which any of the Placees may have obtained or received (regardless of whether or not such information, representation, warranty or statement was given or made by or on behalf of any such persons). Each Placee acknowledges and agrees that it has relied on its own investigation of the business, financial or other position of the Company in accepting a participation in the Placing. Nothing in this paragraph shall exclude the liability of any person for fraudulent misrepresentation.

Registration and settlement

Settlement of transactions in the Placing Shares (ISIN: IE00BB0QZ876) following Admission will take place within the system administered by Euroclear UK & Ireland Limited ("CREST"), using the delivery versus payment mechanism, subject to certain exceptions. The Company reserves the right to require settlement for and delivery of the Placing Shares (or a portion thereof) to Placees in certificated form if, in the Joint Bookrunners' opinion, delivery or settlement is not possible or practicable within the CREST system within the timetable set out in this Announcement or would not be consistent with the regulatory requirements in the Placee's jurisdiction.

Following the close of the Bookbuild for the Placing, each Placee allocated Placing Shares in the Placing will be sent a contract note stating the number of Placing Shares to be allocated to it at the Placing Price, the aggregate amount owed by such Placee to the Joint Bookrunner to whom such Placee submitted its bid for Placing Shares (the "Relevant Joint Bookrunner") and settlement instructions. Placees should settle against: (i) CREST ID 189 (in the case of Davy); (ii) CREST ID 118 (in the case of HSBC); or (iii) CREST ID 834 (in the case of Mirabaud). It is expected that such contract note will be despatched on 16 May 2014. 16 May 2014 will also be the trade date in respect of the First Tranche Shares and the Second Tranche Shares.

Each Placee agrees that it will do all things necessary to ensure that delivery and payment is completed in accordance with either the standing CREST or certificated settlement instructions that it has in place with the Relevant Joint Bookrunner.

The Company will deliver the Placing Shares to a CREST account operated by Davy as agent for the Company and Davy will enter its delivery (DEL) instruction into the CREST system. Davy will hold any Placing Shares delivered to this account as nominee for the Placees. The input to CREST by a Placee of a matching or acceptance instruction will then allow delivery of the relevant Placing Shares to that Placee against payment.

It is expected that settlement in respect of the First Tranche Shares will be on 21 May 2014 and that settlement in respect of the Second Tranche Shares will be on 10 June 2014, in accordance with the instructions given to the Relevant Joint Bookrunner.

Interest is chargeable daily on payments not received from Placees on the due date in accordance with the arrangements set out above at the rate of two percentage points above LIBOR as determined by the Joint Bookrunners.

Each Placee agrees that, if it does not comply with these obligations, the Joint Bookrunners may sell any or all of the Placing Shares allocated to that Placee on such Placee's behalf and retain from the proceeds, for the Company's account and benefit, an amount equal to the aggregate amount owed by the Placee plus any interest due. The relevant Placee will, however, remain liable for any shortfall below the aggregate amount owed by it and shall be required to bear any stamp duty, stamp duty reserve tax or other stamp, securities, transfer, registration, execution, documentary or other similar impost, duty or tax (together with any interest or penalties) which may arise upon the sale of such Placing Shares on such Placee's behalf.

If Placing Shares are to be delivered to a custodian or settlement agent, Placees should ensure that the contract note is copied and delivered immediately to the relevant person within that organisation. Insofar as Placing Shares are registered in a Placee's name or that of its nominee or in the name of any person for whom a Placee is contracting as agent or that of a nominee for such person, such Placing Shares should, subject to as provided below, be so registered free from any liability to UK or Irish stamp duty or UK stamp duty reserve tax. If there are any circumstances in which any other stamp duty or stamp duty reserve tax (together with interest and penalties) is payable in respect of the issue of the Placing Shares, neither the Joint Bookrunners nor the Company shall be responsible for the payment thereof.

Representation and warranties

By participating in the Placing each Placee (and any person acting on such Placee's behalf) irrevocably acknowledges, confirms, undertakes, represents, warrants and agrees (as the case may be) with the Joint Bookrunners (in their capacities as bookrunners and placing agents of the Company in respect of the Placing) and the Company, in each case as a fundamental term of their application for Placing Shares as set out below. Each Placee (and any person acting on such Placee's behalf):

1. represents and warrants that it has read and understood this Announcement, including the Appendices, in its entirety and that its subscription for the Placing Shares is subject to and based upon all the terms, conditions, warranties, acknowledgements, agreements and undertakings and other information contained herein and will not rely on any information or any representations, warranties or statements made at any time by any person in connection with the Placing or otherwise, other than the information contained in this Announcement and any information publicly announced to a Regulatory Information Service by or on behalf of the Company on or prior to the date of this Announcement;

2. acknowledges and agrees that no prospectus, offering document or admission document has been or will be prepared in connection with the Placing and represents and warrants that it has not received an admission document or other offering document in connection with the Bookbuild, the Placing or the Placing Shares;

3. acknowledges that the Ordinary Shares are admitted to trading on AIM and the ESM, and that the Company is therefore required to publish certain business and financial information in accordance with the rules and practices of the AIM and the ESM (collectively, the "Exchange Information"), which includes a description of the nature of the Company's business, the Results Announcement and the Company's most recent balance sheet and profit and loss account, and similar statements for preceding financial years and that it has reviewed such Exchange Information and is able to obtain or access such Exchange Information without undue difficulty, and is able to obtain access to such information or comparable information concerning any other publicly traded company, without undue difficulty;

4. acknowledges that none of the Joint Bookrunners or the Company nor any of their Affiliates nor any person acting on behalf of any of them has provided, and will not provide, it with any material or information regarding the Placing Shares, the Placing or the Company or any other person other than this Announcement; nor has it requested any of the Joint Bookrunners, the Company, any of their Affiliates or any person acting on behalf of any of them to provide it with any such material or information;

5. acknowledges that the Placing Shares have not been and will not be registered under the securities legislation of the United States, Australia, Canada, Japan or South Africa or any other Prohibited Jurisdiction and, subject to certain exceptions, may not be offered, sold, taken up, renounced or delivered or transferred, directly or indirectly, in or into such Prohibited Jurisdictions;

6. represents and warrants that it is not within Australia, Canada, South Africa, Japan or any other jurisdiction in which it is unlawful to make or accept an offer to acquire the Placing Shares;

7. represents and warrants that it and any account for which it exercises sole investment discretion are or, at the time of the Placing Shares are acquired, will be (a) not in the United States and not acting for the account or benefit of a "US person" (as defined in Regulation S) and is acquiring the Placing Shares in an "offshore transaction" as defined in Regulation S; or (b) a QIB and has duly executed an investor representation letter in a form provided to it and delivered the same to one of the Joint Bookrunners or its affiliates;

8. represents and warrants that it, and any account for which it exercises sole investment discretion, are not acquiring the Placing Shares as a result of any "directed selling efforts" (as defined in Regulation S) or "general advertising" or "general solicitation" (each within the meaning of Rule 502(c) under the Securities Act);

9. if it is a QIB, represents and warrants that (a) in making its investment decision, it has consulted its own independent advisers or otherwise has satisfied itself concerning, without limitation, the effects of United States federal, state and local income tax laws and foreign tax laws generally and the US Employee Retirement Income Security Act of 1974, as amended ("ERISA"); (b) it has received all information (including the business, financial condition, prospects, creditworthiness, status and affairs of the Company, the Placing and the Placing Shares, as well as the opportunity to ask questions) concerning the Company, the Placing and the Placing Shares that it believes is necessary or appropriate in order to make an investment decision in respect of the Company and the Placing Shares; (c) it is aware and understands that an investment in the Placing Shares involves a considerable degree of risk and no U.S. federal or state or non-U.S. agency has made any finding or determination as to the fairness for investment or any recommendation or endorsement of the Placing Shares; and (d) it is able to bear the economic risk of an investment in the Placing Shares, is able to sustain a complete loss of the investment in the Placing Shares and has no need for liquidity with respect to its investment in the Placing;

10. acknowledges that it is acquiring the Placing Shares for investment purposes and not with a view to any distribution or for resale in connection with, the distribution thereof in whole or in part, in the United States and that it has full power to make the acknowledgements, representations and agreements herein on behalf of each such account;

11. acknowledges that the Placing Shares have not been and will not be registered under the Securities Act or with any state or other jurisdiction of the United States, nor approved or disapproved by the U.S. Securities and Exchange Commission, any state securities commission in the United States or any other United States regulatory authority, and agrees not to reoffer, resell, pledge or otherwise transfer the Placing Shares except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act;

12. acknowledges that the Placing Shares offered and sold in the United States are "restricted securities" within the meaning of Rule 144(a)(3) under the Securities Act and, so long as the Placing Shares are "restricted securities", it will not deposit the Placing Shares into any unrestricted depositary receipt facility maintained by any depositary bank in respect of the Company's Ordinary Shares and understands that the Placing Shares and the Warrants will not settle or trade through the facilities of the Depository Trust Corporation, the NYSE, NASDAQ or any other US exchange or clearing system;

13. represents and warrants that it, and any account for which it exercises sole discretion, will not reoffer, sell, pledge or otherwise transfer the Placing Shares or the Warrants except (a) in an "offshore transaction" as defined in an within the meaning of Regulation S under the Securities Act; (b) in the United States to QIBs pursuant to Rule 144A under the Securities Act; (c) pursuant to Rule 144 under the Securities Act (if available); or (d) pursuant to an effective registration statement under the Securities Act and that, in each such case, such offer, sale, pledge, or transfer will be made in accordance with any applicable securities laws of any state of the United States;

14. represents and warrants that it is not a "benefit plan investor" (within the meaning of ERISA), or other employee benefit plan subject to any US federal, state, local or other law or regulation that is substantially similar to the prohibited transaction provisions of Section 406 of ERISA or Section 4975 of the US Internal Revenue Code of 1986, as amended, and that it will not sell or otherwise transfer any Placing Shares or any interest therein unless the transferee makes or is deemed to make the representations and warranties set forth in this paragraph 14, and the purchaser acknowledges and agrees that any purported transfer of Placing Shares or any interest therein that does not comply with this paragraph 14 will not be effective and will not be recognised by the Company;

15. acknowledges and agrees that the Placing Shares and the Warrants will, to the extent they are delivered in certificated form, bear a legend to the following effect unless agreed otherwise with the Company:

"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES, AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (B) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT OR (C) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES. EACH HOLDER, BY ITS ACCEPTANCE OF THESE SECURITIES, REPRESENTS THAT IT UNDERSTANDS AND AGREES TO THE FOREGOING RESTRICTIONS.";

16. acknowledges that the Placing Shares have not been and will not be qualified by a prospectus under Canadian Securities Laws and are not being offered or sold to any person in any Canadian jurisdiction;

17. acknowledges that the content of this Announcement is exclusively the responsibility of the Company and that neither the Joint Bookrunners, their respective Affiliates nor any person acting on their behalf has or shall have any responsibility or liability for any information, representation or statement contained in this Announcement or any information previously published by or on behalf of the Company and will not be liable for any Placee's decision to participate in the Placing based on any information, representation or statement contained in this Announcement, any information previously published by or on behalf of the Company or otherwise. Each Placee further represents, warrants and agrees that the only information on which it is entitled to rely and on which such Placee has relied in committing itself to subscribe for the Placing Shares is contained in this Announcement and any Exchange Information, such information being all that it deems necessary to make an investment decision in respect of the Placing Shares and that it has neither received nor relied on any other information given or investigations, representations, warranties or statements made by the Joint Bookrunners or the Company and neither the Joint Bookrunners nor the Company will be liable for any Placee's decision to accept an invitation to participate in the Placing based on any other information, representation, warranty or statement. Each Placee further acknowledges and agrees that it has relied on its own investigation of the business, financial or other position of the Company in deciding to participate in the Placing;

18. acknowledges that it has not relied on any information relating to the Company contained in any research reports prepared by the Joint Bookrunners, any of their respective Affiliates or any person acting on the Joint Bookrunners' or any of their respective Affiliates' behalf and understands that (i) none of the Joint Bookrunners, any of their respective Affiliates nor any person acting on their behalf has or shall have any liability for public information or any representation; (ii) none of the Joint Bookrunners, any of their respective Affiliates nor any person acting on their behalf has or shall have any liability for any additional information that has otherwise been made available to such Placee, whether at the date of publication, the date of this Announcement or otherwise; and that (iii) none of the Joint Bookrunners, any of their respective Affiliates nor any person acting on their behalf makes any representation or warranty, express or implied, as to the truth, accuracy or completeness of such information, whether at the date of publication, the date of this Announcement or otherwise;

19. acknowledges that none of the Joint Bookrunners nor any person acting on behalf of them nor any of their respective Affiliates has or shall have any responsibility or liability for any Exchange Information, any publicly available or filed information, or any representation relating to the Company, provided that nothing in this paragraph excludes the liability of any person for fraudulent misrepresentation made by that person;

20. represents and warrants that neither it, nor the person specified by it for registration as a holder of Placing Shares is, or is acting as nominee or agent for, and that the Placing Shares will not be allotted to, a person whose business either is or includes issuing depositary receipts or the provision of clearance services and therefore that the issue to the Placee, or the person specified by the Placee for registration as holder, of the Placing Shares will not give rise to a liability under any of sections 67, 70, 93 and 96 of the Finance Act 1986 (depositary and clearance services) and that the Placing Shares are not being acquired in connection with arrangements to issue depositary receipts or to issue or transfer Placing Shares into a clearance system;

21. acknowledges that no action has been or will be taken by the Company, the Joint Bookrunners or any person acting on behalf of the Company or the Joint Bookrunners that would, or is intended to, permit a public offer of the Placing Shares in any country or jurisdiction where any such action for that purpose is required;

22. represents and warrants that it has complied with its obligations in connection with money laundering and terrorist financing under the Criminal Justice Act 1993, the Proceeds of Crime Act 2002, the Terrorism Act 2000, the Terrorism Act 2006 and the Money Laundering Regulations 2007 (the "Regulations") and, if making payment on behalf of a third party, that satisfactory evidence has been obtained and recorded by it to verify the identity of the third party as required by the Regulations;

23. represents and warrants that it is acting as principal only in respect of the Placing or, if it is acting for any other person (i) it is duly authorised to do so, (ii) it is and will remain liable to the Company and/or the Joint Bookrunners for the performance of all its obligations as a Placee in respect of the Placing (regardless of the fact that it is acting for another person), (iii) it is both an "authorised person" for the purposes of FSMA and a "qualified investor" ("Qualified Investor") as defined in the Prospectus Directive acting as agent for such person, and (iv) such person is either (1) a "qualified investor" as referred to at section 86(7) of FSMA or (2) a "client" (as defined in section 86(2) of FSMA) of its that has engaged it to act as such client's agent on terms which enable it to make decisions concerning the Placing or any other offers of transferable securities on such client's behalf without reference to such client;

24. represents and warrants that it will subscribe for any Placing Shares for which it subscribes for its account or for one or more accounts as to each of which it exercises sole investment discretion and it has full power to make the acknowledgements, representations and agreements herein on behalf of each such account;

25. if a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive (including any relevant implementing measure in any member state), represents and warrants that the Placing Shares subscribed for by it in the Placing will not be subscribed for on a non-discretionary basis on behalf of, nor will they be subscribed for with a view to their offer or resale to, persons in a member state of the European Economic Area which has implemented the Prospectus Directive other than to Qualified Investors, or in circumstances in which the prior consent of the Joint Bookrunners has been given to the proposed offer or resale;

26. represents and warrants that it has not offered or sold and, prior to the expiry of a period of six months from Admission, will not offer or sell any Placing Shares to persons in the United Kingdom, except to Qualified Investors or otherwise in circumstances which have not resulted and which will not result in an offer to the public in the United Kingdom within the meaning of section 85(1) of FSMA or to persons in Ireland, except in circumstances which have not resulted and will not result in an offer to the public in Ireland within the meaning of Regulation 12 of the Prospectus (Directive 2003/71/EC) Regulations 2005 of Ireland, as amended;

27. acknowledges that any offer of Placing Shares may only be directed at persons in member states of the European Economic Area who are Qualified Investors and represents and warrants that it has not offered or sold and will not offer or sell any Placing Shares to persons in the European Economic Area prior to Admission of the First Tranche Shares, or as the case may be, Second Tranche Shares except to Qualified Investors or otherwise in circumstances which have not resulted in and which will not result in an offer to the public in any member state of the European Economic Area within the meaning of the Prospectus Directive (including any relevant implementing measure in any member state);

28. represents and warrants that it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of FSMA) relating to the Placing Shares in circumstances in which section 21(1) of FSMA does not require approval of the communication by an authorised person;

29. represents and warrants that it has complied and will comply with all applicable provisions of FSMA with respect to anything done by it in relation to the Placing Shares in, from or otherwise involving, the United Kingdom and the European Communities (Markets in Financial Instruments) Regulations 2007 of Ireland with respect to anything done by it in relation to the Placing Shares in, from or otherwise involving Ireland;

30. represents and warrants that it is a person falling within Article 19(1), Article 19(5) and/or Article 49(2)(a) to (d) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 or is a person to whom this Announcement may otherwise be lawfully communicated;

31. represents and warrants that (i) it and any person acting on its behalf has capacity and authority and is otherwise entitled to subscribe for and purchase the Placing Shares under the laws of all relevant jurisdictions which apply to it; (ii) it has paid any issue, transfer or other taxes due in connection with its participation in any territory; (iii) it has not taken any action which will or may result in the Company, the Joint Bookrunners, any of their respective Affiliates or any person acting on their behalf being in breach of the legal and/or regulatory requirements of any territory in connection with the Placing and (iv) that the subscription for and purchase of the Placing Shares by it or any person acting on its behalf will be in compliance with applicable laws and regulations in the jurisdiction of its residence, the residence of the Company, or otherwise;

32. undertakes that it and any person acting on its behalf will make payment for the Placing Shares allocated to it in accordance with this Announcement on the due time and date set out herein against delivery of such Placing Shares to it, failing which the relevant Placing Shares may be placed with other Placees or sold as the Joint Bookrunners may in their absolute discretion determine and it will remain liable for any shortfall below the net proceeds of such sale and the placing proceeds of such Placing Shares and may be required to bear any stamp duty or stamp duty reserve tax (together with any interest or penalties due pursuant to the terms set out or referred to in this Announcement) which may arise upon the sale of such Placee's Placing Shares on its behalf;

33. acknowledges that its allocation (if any) of Placing Shares will represent a maximum number of Placing Shares which it will be entitled, and required, to subscribe for, and that the Company may call upon it to subscribe for a lower number of Placing Shares (if any), but in no event in aggregate more than the aforementioned maximum;

34. acknowledges that none of the Joint Bookrunners or any of their respective Affiliates, nor any person acting on their behalf, is making any recommendations to it or advising it regarding the suitability or merits of any transactions it may enter into in connection with the Placing and that participation in the Placing is on the basis that it is not and will not be a client of the Joint Bookrunners and that the Joint Bookrunners have no duties or responsibilities to any Placee for providing the protections afforded to their respective clients or for providing advice in relation to the Placing nor in respect of any representations, warranties, undertakings or indemnities contained in the Placing Agreement nor for the exercise or performance of any of the Joint Bookrunners' rights and obligations thereunder including any rights to waive or vary any conditions or exercise any termination right;

35. undertakes that (i) the person whom it specifies for registration as holder of the Placing Shares will be (a) itself or (b) its nominee, as the case may be; (ii) neither the Joint Bookrunners nor the Company will be responsible for any liability to stamp duty or stamp duty reserve tax (together with interest and penalties) resulting from a failure to observe this requirement and (iii) each Placee and any person acting on behalf of such Placee agrees to participate in the Placing on the basis that the Placing Shares will be allotted to the CREST stock account of the Relevant Joint Bookrunner who will hold them as nominee on behalf of such Placee until settlement in accordance with its standing settlement instructions with payment for the Placing Shares being made simultaneously upon receipt of the Placing Shares in the Placee's stock account on a delivery versus payment basis;

36. acknowledges that these Terms and Conditions and any agreements entered into by it pursuant to these Terms and Conditions and any non-contractual obligations arising out of or in connection with such agreements shall be governed by and construed in accordance with the laws of England and Wales and it submits (on behalf of itself and on behalf of any person on whose behalf it is acting) to the exclusive jurisdiction of the English courts as regards any claim, dispute or matter arising out of any such contract, except that enforcement proceedings in respect of the obligation to make payment for the Placing Shares (together with any interest chargeable thereon) may be taken by the Company or the Joint Bookrunners in any jurisdiction in which the relevant Placee is incorporated or in which any of its securities have a quotation on a recognised stock exchange;

37. acknowledges that the Joint Bookrunners and the Company and their respective Affiliates will rely upon the truth and accuracy of the representations, warranties, agreements, undertakings and acknowledgements set forth herein and which are irrevocable and it irrevocably authorises the Joint Bookrunners to produce this Announcement, pursuant to, in connection with, or as may be required by any applicable law or regulation, administrative or legal proceeding or official inquiry with respect to the matters set forth herein;

38. agrees to indemnify on an after-tax basis and hold the Company, the Joint Bookrunners, any of their respective Affiliates and any person acting on their behalf harmless from any and all costs, claims, liabilities and expenses (including legal fees and expenses) arising out of or in connection with any breach of the representations, warranties, acknowledgements, agreements and undertakings in this Appendix and further agrees that the provisions of this Appendix shall survive after completion of the Placing;

39. acknowledges that it irrevocably appoints any director of the Joint Bookrunners as its agent for the purposes of executing and delivering to the Company and/or its registrars any documents on its behalf necessary to enable it to be registered as the holder of any of the Placing Shares agreed to be taken up by it under the Placing;

40. acknowledges that its commitment to subscribe for Placing Shares on the terms set out herein and in the contract note will continue notwithstanding any amendment that may in future be made to the terms of the Placing and that Placees will have no right to be consulted or require that their consent be obtained with respect to the Company's conduct of the Placing;

41. in making any decision to subscribe for the Placing Shares, confirms that (i) it has knowledge, sophistication and experience in financial, business and international investment matters as is required to evaluate the merits and risks of acquiring the Placing Shares; (ii) it is experienced in investing in securities of this nature in the Company's sector and is aware that it may be required to bear, and is able to bear, the economic risk of, and is able to sustain a complete loss in connection with, the Placing; (iii) it has relied on its own examination and due diligence of the Company and its Affiliates taken as a whole, and the terms of the Placing, including the merits and risks involved; (iv) it has had sufficient time to consider and conduct its own investigation with respect to the offer and purchase of the Placing Shares, including the tax, legal, currency and other economic considerations relevant to such investment and (v) will not look to the Company, the Joint Bookrunners, any of their respective Affiliates or any person acting on their behalf for all or part of any such loss or losses it or they may suffer;

42. acknowledges and agrees that the Joint Bookrunners do not owe any fiduciary or other duties to it or any Placee in respect of any representations, warranties, undertakings or indemnities in the Placing Agreement;

43. understands and agrees that it may not rely on any investigation that the Joint Bookrunners or any person acting on their behalf may or may not have conducted with respect to the Company and its Affiliates or the Placing and the Joint Bookrunners have not made any representation to it, express or implied, with respect to the accuracy or adequacy of publicly available information concerning the Company, the merits of the Placing, the subscription for the Placing Shares, or as to the condition, financial or otherwise, of the Company and its Affiliates, or as to any other matter relating thereto, and nothing herein shall be construed as a recommendation to it to subscribe for the Placing Shares. It acknowledges and agrees that no information has been prepared by, or is the responsibility of, the Joint Bookrunners for the purposes of this Placing;

44. accordingly it acknowledges and agrees that it will not hold the Joint Bookrunners or any of their respective Affiliates or any person acting on its behalf responsible or liable for any misstatements in or omission from any publicly available information relating to the Company's group or information made available (whether in written or oral form) relating to the Company's group (the "Information") and that none of the Joint Bookrunners or any person acting on behalf of the Joint Bookrunners, makes any representation or warranty, express or implied, as to the truth, accuracy or completeness of such Information or accepts any responsibility for any of such Information; and

45. acknowledges that in connection with the Placing, the Joint Bookrunners and any of their respective Affiliates acting as an investor for its own account may take up shares in the Company and in that capacity may retain, purchase or sell for its own account such shares in the Company and any securities of the Company or related investments and may offer or sell such securities or other investments otherwise than in connection with the Placing. Accordingly, references in this Announcement to shares being issued, offered or placed should be read as including any issue, offering or placement of such shares in the Company to any of the Joint Bookrunners and any Affiliate acting in such capacity. Neither the Joint Bookrunners nor any Affiliate intends to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligations to do so.

The foregoing acknowledgements, agreements, undertakings, representations, warranties and confirmations are given for the benefit of each of the Company and the Joint Bookrunners (for their own benefit and, where relevant, the benefit of their respective Affiliates and any person acting on their behalf) and are irrevocable. The agreement to settle a Placee's allocation (and/or the allocation of a person for whom such Placee is contracting as agent) free of stamp duty and stamp duty reserve tax depends on the settlement relating only to the subscription by it and/or such person direct from the Company for the Placing Shares in question. Such agreement assumes, and is based on a warranty from each Placee, that neither it, nor the person specified by it for registration as holder, of Placing Shares is, or is acting as nominee or agent for, and that the Placing Shares will not be allotted to, a person whose business either is or includes issuing depositary receipts or the provision of clearance services. If there are any such arrangements, or the settlement relates to any other dealing in the Placing Shares, stamp duty or stamp duty reserve tax may be payable. In that event the Placee agrees that it shall be responsible for such stamp duty or stamp duty reserve tax, and neither the Company nor the Joint Bookrunners shall be responsible for such stamp duty or stamp duty reserve tax. If this is the case, each Placee should seek its own advice and notify the Joint Bookrunners accordingly.

In addition, Placees should note that they will be liable for any capital duty, stamp duty and all other stamp, issue, securities, transfer, registration, documentary or other similar impost, duties or taxes (including any interest, fines or penalties relating thereto) payable outside the United Kingdom or Ireland by them or any other person on the subscription by them of any Placing Shares or the agreement by them to subscribe for any Placing Shares.

When a Placee or person acting on behalf of the Placee is dealing with the Joint Bookrunners, any money held in an account with any of the Joint Bookrunners on behalf of the Placee and/or any person acting on behalf of the Placee will not be treated as client money within the meaning of the rules and regulations of the FCA made under FSMA. The Placee acknowledges that the money will not be subject to the protections conferred by the client money rules; as a consequence, this money will not be segregated from the Joint Bookrunners' money in accordance with the client money rules and will be used by the Joint Bookrunners in the course of their own business; and the Placee will rank only as a general creditor of the Joint Bookrunners.

All times and dates in this Announcement may be subject to amendment. The Joint Bookrunners shall notify the Placees and any person acting on behalf of the Placees of any changes.

Past performance is no guide to future performance and persons needing advice should consult an independent financial adviser.

The rights and remedies of the Joint Bookrunners and the Company under these Terms and Conditions are in addition to any rights and remedies which would otherwise be available to each of them and the exercise or partial exercise of one will not prevent the exercise of others.

Each Placee may be asked to disclose in writing or orally to the Joint Bookrunners:

A. if he is an individual, his nationality; or

B. if he is a discretionary fund manager, the jurisdiction in which the funds are managed or owned.

APPENDIX II:

UPDATE ON LEGAL PROCEEDINGS

Introduction

On 5 July 2013, the Company announced that it had issued legal proceedings in the High Court of Ireland (the "High Court") against two former consultants to the Company, Mr Seghir Maza and Mr Samir Abdelly and against a Tunisian company owned and controlled by Mr Abdelly, Abdelly and Associés International Consulting Limited ("AAIC"), (collectively, the "Consultants"). Mr Abdelly had previously been a legal adviser to the Company in relation to certain projects in North Africa.

Those proceedings sought: (i) to set aside a number of agreements entered into by the Company and PIL (together, the "Companies") with AAIC and Mr Maza in 2004 and 2005 in connection with the Company's bid for its oil and gas exploration and development licence in Algeria; and (ii) repayment of all monies paid to the Consultants by PIL pursuant to those agreements.

In November 2013, the High Court awarded judgment, in default of appearance, in favour of the Company and PIL against Mr Maza arising from the legal proceedings issued by the Company and PIL against Mr Maza, described above. The judgement held the Maza agreements to be void and included judgment in favour of PIL in the amount of US$4.7 million, being an amount previously paid by PIL to Mr Maza in relation to the Maza Agreements.

Background to the legal proceedings

In 2004, the Algerian national oil and gas company ("ANOGC") announced that it would hold the fifth international Licensing Round for oil and gas exploration in ten different blocks or areas in Algeria (the "Fifth Licensing Round"). The Company, having satisfied certain pre-qualification criteria set by ANOGC, was invited by ANOGC to participate in the Fifth Licensing Round.

The Fifth Licensing Round was conducted by means of an open, competitive tender in accordance with published terms and conditions. The criteria for the assessment of bids were: (i) the agreement of the bidder to undertake to carry out the minimum work programme for the licence provided for in the Production Sharing Contract ("PSC") as proposed by ANOGC and (ii) the proposal of a numerical factor that determined the sharing in percentage terms of oil and gas production revenue between the bidder and the Algerian State, known as the K factor. The lower the proposed K factor, the higher the proportion of revenues that would be allocated to the Algerian State.

The Company, with assistance from retained technical experts, submitted a bid for two blocks (the "Isarene Blocks") in accordance with ANOGC's published requirements for the Fifth Licensing Round. The Company agreed to undertake the minimum work programme that was stipulated for the Isarene Blocks and bid a K factor of 0.739 in its submission for the Isarene Blocks. The K factor bid by the Company was the lowest K factor submitted by any bidder in the Fifth Licensing Round.

Bids in the Fifth Licensing Round were submitted in sealed packages by 10 a.m. on 28 July 2004. Bids were then opened two hours later at a televised, public ceremony in Algeria, at which the successful bidders for each block in the Fifth Licensing Round were announced.

At the opening ceremony, it was announced that the Company was the successful bidder, and the only bidder, for the Isarene Blocks. The PSC, entered into between the Company and ANOGC on 26 September 2004, was ratified by the Algerian Council of Ministers on 17 January 2005 and came into effect on 26 April 2005, following formal notification to the Company by ANOGC to that effect.

The Agreements

2004 to 2007:

In July 2004 and March 2005 (prior to the appointment of the Company's existing management team and board of directors) the Companies entered into the Agreements.

On 21 July 2004, the Company entered into two Irrevocable Letters of Commitment ("ILCs"). The first ILC was entered into between the Company and AAIC. The second ILC was entered into between the Company, AAIC and Mr Maza.

The ILCs provided that, in return for the Consultants providing "legal and technical assistance" in connection with the Fifth Licensing Round, the Companies would make various payments to the Consultants, including sums representing a percentage of the value of the bid and a percentage of the operating costs of the project in Algeria, together with stock options and lump sum payments.

On 11 March 2005, prior to the PSC coming into effect, PIL entered into two consultancy agreements, one with AAIC and the other with Mr Maza (respectively the "AAIC Consultancy Agreement" and the "Maza Consultancy Agreement" (together, the "Consultancy Agreements")), in relation to services purportedly provided by the Consultants to the Companies in relation to the Fifth Licensing Round. AAIC and Mr Abdelly have alleged that the Consultancy Agreements replaced the ILCs. Parent company guarantees of PIL's obligations under the Consultancy Agreements were entered into by the Companies on the same day.

The AAIC Consultancy Agreement purported to commit PIL to make payments to AAIC of up to US$5 million, payable on the occurrence of certain events during the lifetime of the Company's licence, and to further payments to AAIC amounting to a 2.5% share of PIL's annual income, exclusive of taxation or duty of any kind arising from the sale by PIL of hydrocarbons from the Isarene Blocks pursuant to the PSC, after deduction of allowable and other costs.

The Maza Consultancy Agreement purported to commit PIL to make payments to Mr Maza of up to US$11 million, again payable on the occurrence of certain events during the lifetime of the Company's licence, and to further payments to Mr Maza amounting to a 5% share of PIL's annual income, exclusive of taxation or duty of any kind arising from the sale by PIL of hydrocarbons from the Isarene Blocks pursuant to the PSC, after deduction of allowable and other costs.

A further services agreement was entered into between the Company and AAIC in May 2005, which provided that AAIC be retained by the Company for a fee of US$200,000 per annum, in return for which AAIC would provide services, such as arranging meetings with officials in Libya, Tunisia and Algeria, lobbying, administrative and logistical support in Algeria and other advice to the Company (the "Services Agreement").

Payments made by the Company to AAIC and Mr Maza on 20 August 2004 were acknowledged under the Consultancy Agreements as advance payments pursuant to those agreements. In total, in the period between 2004 and 2006, US$2 million was paid by PIL to AICC pursuant to the AAIC Consultancy Agreement and US$5 million was paid by PIL to Mr Maza pursuant to the Maza Consultancy Agreement. A further US$200,000 was paid by PIL to AICC pursuant to the Services Agreement in 2006. No further payments were made by the Companies under the Agreements.

2007 to 2013:

On 3 May 2007, the Board of the Company, following consultation with its legal advisers, decided to cease all communication with the Consultants and, as a result, invoices received by PIL for US$3 million from AAIC and for US$6 million from Mr Maza were not paid. In addition, the Companies did not acknowledge or respond to correspondence received from the Consultants in 2007, 2009 and early 2013 in relation to those unpaid invoices.

On 9 May 2013, AAIC demanded payments from the Companies of US$3 million under the AAIC Consultancy Agreement and US$400,000 under the Services Agreement.

Upon receipt of the AAIC payment demand in May 2013, the Company reviewed its files and records relating to the matter and also made inquiries of certain persons who it believed would have knowledge of the Company at the time the Agreements were entered into. It also sought legal advice from its Irish and Algerian legal advisers. The Company did not find evidence of any services having been provided by the Consultants to the Companies under the Agreements. The Company's Irish lawyers wrote to AAIC's lawyers at that time, denying that any services were ever provided to the Companies under the AAIC Agreements and noting that the AAIC Consultancy Agreement did not include any description of the type of services allegedly provided and that no details of the services delivered had been provided to the Companies. No details of any such services were provided by the Consultants to the Companies in response to the Company's correspondence. The Company's conclusion was that, as no services had been provided to either of the Companies under the Agreements, the Agreements constituted a fraud on the Companies.

The Company considered it prudent to raise these matters with ANOGC. Accordingly, on 2 July 2013, the Company met with ANOGC to inform it of the existence of the Consultancy Agreements (and explained that those agreements were entered into by former directors of the Company), the identity of the Consultants, the timing of entry into the Consultancy Agreements, the nature of the proposed services to be provided under those agreements, AAIC's demand for a US$3.4 million payment in May 2013 and the Company's belief that a fraud had been perpetrated on it on the basis that no services had been provided to the Company by the Consultants. ANOGC was also informed at that meeting in broad terms of the Company's proposed legal strategy and that the Company would be required to make certain public disclosures on the matter. At the meeting, the Company gave ANOGC a copy of the draft public announcement that it intended to issue shortly thereafter to apprise the market of the matter (the Company issued an announcement concerning the Agreements on 5 July 2013).

The legal proceedings

The Companies issued legal proceedings in the High Court against the Consultants on 4 July 2013 seeking: (i) a declaration that the Agreements are void; and (ii) the return of all monies previously paid by PIL to the Consultants pursuant to the Agreements.

In November 2013, the High Court granted the Companies judgment, in default of appearance, against Mr Maza and granted all reliefs sought by the Companies against him in the proceedings, including an order that the Maza Agreements were induced by Mr Maza's fraudulent misrepresentations and were in breach of trust or were knowingly obtained by inducing a breach of fiduciary duty, and were consequently void. The High Court ordered that the Companies be entitled to recover US$4.7 million from Mr Maza, plus interest and costs. No such recovery by the Companies has been made to date.

The legal proceedings against AAIC and Mr Abdelly are ongoing. In their defence of the legal proceedings dated 28 January 2014, AAIC and Mr Abdelly claim that the Consultancy Agreements and their associated Guarantees replaced the ILCs. These parties have counterclaimed against the Companies, seeking judgment against them in the amount of US$3 million and a declaration that the AAIC Consultancy Agreement and the associated Guarantee are valid and subsisting. In their defence, AAIC and Mr Abdelly allege that various services were provided to the Companies in 2004 and 2005, including identifying the opportunity for the Company to participate in the Fifth Licensing Round (and in particular in bidding for the Isarene Blocks), providing information on the Licensing and tender process and logistical support (such as transport and accommodation), assisting the Companies with the pre-qualification process so as to enable them to become eligible to participate in the bidding process and advising on the appropriate K factor to be submitted by the Companies in the Fifth Licensing Round.

On 19 March 2014, the Companies rejected those claims in their formal response to the defence and counterclaim and denied that any such services were ever provided to the Companies. The Companies anticipate that the first substantive hearing of the High Court to determine the matter will take place in late 2014 or early 2015.

APPENDIX III:

PRINCIPAL TERMS OF THE INVESTMENT AGREEMENT

As part of the Placing, Dovenby and the Company will today enter into an Investment Agreement, in which Dovenby will agree to invest £30 million (approximately US$50 million) by subscribing for Placing Shares in the Placing. As part of the First Tranche Placing, a proportion of Dovenby's subscription will occur immediately. With regard to the balance of Placing Shares that Dovenby will agree to subscribe for, its subscription will be conditional upon the passing of the Resolution. Dato' Ahmad Fuad and Datuk Abdul Farish, the owners of Dovenby, will agree to guarantee the obligations of Dovenby under the Investment Agreement and give certain covenants contained in the Investment Agreement.

Pursuant to the terms of the Investment Agreement, Dovenby will be entitled to appoint one director to the Board, for so long as it holds at least 8 per cent of the issued share capital of the Company. It is also expected that a nominee of Dovenby will be appointed to the Board within three months from the conclusion of the Placing.

Dovenby will undertake not to directly or indirectly increase its shareholding in the Company beyond 15 per cent of the Company's issued ordinary share capital for a period of three years after its subscription for First Tranche Shares, and not to dispose of any Ordinary Shares for a period of six months after its subscription for First Tranche Shares, in each case without the Company's prior consent. It will also support the Company's annual proposal to Shareholders at its annual general meeting to disapply Shareholders' statutory pre-emption rights in respect of new share issues up to an amount not exceeding 5 per cent of the Company's issued share capital.

Dovenby and the Company will establish a joint committee to identify regions and investigate opportunities for strategic co-operation, with a view to exploring the possibility of a further strategic alliance to jointly seek additional oil and gas projects. In addition, if an opportunity in the upstream oil and gas exploration, production or development business, in any capacity in which the Company operates becomes known to Dovenby, Dovenby will offer the Company the right to pursue that opportunity.

If a takeover offer or scheme of arrangement is made for the issued share capital of the Company that is not already held by Dovenby, and that offer or scheme is recommended by the Board of the Company, and the price per Ordinary Share offered in any such offer or scheme exceeds the Placing Price, Dovenby will either make its own superior offer or scheme of arrangement for the issued share capital of the Company, or accept that offer in respect of its entire holding of Ordinary Shares.

APPENDIX IV

RISK FACTORS

Ordinary Shares are subject to a number of risks. Accordingly, Shareholders should consider carefully all of the information set out in this Announcement including, in particular, the risks described below, prior to making any decision relating to the Ordinary Shares. Additional risks and uncertainties not presently known to Petroceltic or the Directors, or that Petroceltic or the Directors currently consider to be immaterial, may also have an adverse effect on the Company.

THE FOLLOWING FACTORS DO NOT PURPORT TO BE AN EXHAUSTIVE LIST OR EXPLANATION OF ALL THE RISK FACTORS INVOLVED IN INVESTING IN PETROCELTIC. IN PARTICULAR, PETROCELTIC'S PERFORMANCE MIGHT BE AFFECTED BY CHANGES IN MARKET AND/OR ECONOMIC CONDITIONS AND IN LEGAL, REGULATORY AND TAX REQUIREMENTS. ADDITIONALLY, THERE MAY BE RISKS OF WHICH THE BOARD IS NOT AWARE OR BELIEVES TO BE IMMATERIAL WHICH MAY, IN THE FUTURE, ADVERSELY AFFECT THE COMPANY'S BUSINESS AND THE MARKET PRICE OF THE ORDINARY SHARES. IN SUCH CASES, THE MARKET PRICE OF THE ORDINARY SHARES MAY DECLINE AND HOLDERS OF ORDINARY SHARES MAY LOSE ALL OR PART OF THEIR INVESTMENT.

1. RISKS RELATING TO THE GROUP'S BUSINESS

The Group has assets located in the North African and Middle East region, which has been subject to ongoing political and security concerns

1.1 The geopolitical situation in North Africa and the Middle East, where the majority of the Group's assets are located, has changed dramatically in recent years, and remains in transition. Revolutionary, political and civil activities have ousted long-standing leaderships in several countries and have created turbulent political situations and civil unrest in others. While such instances of instability in the North Africa and Middle East region have not so far materially affected the Group's assets, there can be no assurance that such instability in the region will not escalate in the future and as such have a material adverse effect on the Group's business. In addition, such instability may in future spread to additional countries in the North Africa and Middle East region in which the Group currently operates and where the Group will operate and governments in the North Africa and Middle East region may not be successful in maintaining domestic order and stability, all of which could adversely affect the Group's business, as well as result in a decrease in the price of Ordinary Shares.

1.2 The Group has a significant proportion of its assets located in Egypt, a region which has been subject to political and security concerns. Since early 2011, there have been significant political changes and civil unrest in Egypt, which have resulted in free parliamentary and presidential elections in 2012 followed by a removal of the Muslim Brotherhood regime in 2013. The Group's activities could be disrupted or face a significant impairment in value if such civil unrest or occasional violent activities in Egypt escalate or if the Egyptian government does not continue to be generally successful in maintaining or improving the prevailing levels of domestic order and stability. The civil unrest in the region has led to a small number of sporadic incidences of local protests at the locations of the Group's operations, aimed at lobbying the Group for assistance with local infrastructure projects and improvements. These protests have led to intermittent operational interruptions of the Group's operations in 2012 and 2013.

1.3 The political situation in Egypt has severely disrupted economic activity in Egypt, adversely impacting the key tourism sector, trade and foreign investment and the value of the Egyptian Pound, while putting significant strains on the finances of the Egyptian Government. All sales of oil and gas in Egypt are made to the government through EGPC. Oil and gas companies active in Egypt carry a high level of receivables with EGPC and increased political and economic instability could result in further delays in payment of the receivables. Any material delay or failure by EGPC to meet its agreed schedule of payments to the Group, or any continued deterioration in the political and economic situation in Egypt, could have a significant adverse impact on the Group's business, results of operations, financial condition or prospects. The Group has continued to receive payments for its oil and gas from EGPC in accordance with a payment rescheduling agreement (PRA) entered into between Petroceltic and EGPC, which details a monthly repayment programme designed to reduce the level of EGPC receivables.

1.4 Terrorist activities or armed conflict involving any of the countries where the Group operates may disrupt its business activities and adversely affect its financial condition. If events of this nature occur and persist, the resulting political and social instability could adversely affect prevailing oil and gas prices and cause a reduction in revenues. In addition, oil and gas production facilities, transportation systems and storage facilities could be the direct targets of terrorist attacks, and the Group's operations could be adversely impacted if infrastructure integral to its operations is destroyed or damaged.

1.5 The January 2013 Islamist militant attack on the BP, Statoil and Sonatrach operated In Amenas gas field ("In Amenas field") in Algeria heightened security concerns around the country's oil and gas operations. The attacks on the In Amenas field, located approximately 125 kilometers from the Company's Ain Tsila field resulted in numerous casualties and the shut down of oil and gas production for a number of weeks. There can be no assurance that such attacks will not recur or escalate in Algeria in the future. Any such attack on the Company's Ain Tsila facilities (the construction and development for which is planned to commence in 2015, with first production expected to commence in 2018) could have a materially adverse effect on the Group's business, results of operations, financial condition or prospects. Furthermore, the Group and its partners may need to invest more heavily than anticipated in its security procedures of its staff and facilities, which may lead to a rise in production costs and adversely affect the Group's profitability.

1.6 The Group has an interest in exploration assets in the Kurdistan Region of Iraq. Political, economic and legal conditions in the Kurdistan Region of Iraq and in Iraq generally could materially and adversely affect the Group's business and its prospects. The Group cannot completely protect its title to assets in the Kurdistan Region of Iraq as the Federal Iraqi government has historically disputed the validity of PSCs entered into with the KRG and future oil laws passed by the Iraq Government may adversely affect title to assets. Proceeds from exports of oil and gas from the Kurdistan Region of Iraq are received and administered by the Iraq Government, which, in turn, is obliged to pass on oil contractors' entitlements to the contractors through the KRG. To date, the Iraq Government has not passed on the Kurdistan Region of Iraq's oil contractors' full entitlements to export sales proceeds. Consequently, there is currently uncertainty relating to the receipt of proceeds from oil that is exported.

The Group will be exposed to risks associated with operations in emerging markets

1.7 The Group's international operations may be susceptible to political, social and economic instability and civil disturbances. A material risk for the Group concerns the longer collection times of accounts receivable. Other risks for the Group in operating in such areas include:

a) disruption to operations, including strikes, civil actions, international conflict or political interference;

b) changes to the fiscal regime including changes in the rates of income and corporation taxes or changes to the terms of the production sharing contracts or the concession agreements;

c) reversal of current policies encouraging foreign investment or foreign trade by the governments of certain of the countries in which the Group operates;

d) limited access to markets for periods of time;

e) increased inflation;

f) restrictive actions by local governments, including the imposition of tariffs and limitations on imports and exports;

g) modification or renegotiation of contracts; and

h) expropriation or forced divestment of assets.

1.8 Any of the above factors could result in disruptions to the Group's business, increased costs or reduced future growth opportunities. The Group maintains insurance to cover risks associated with its operations to the standard that would be expected from a prudent operator but, notwithstanding, this can give no assurance that such insurance will be sufficient to cover potential losses, in whole or in part, caused by any disruptions.

1.9 Once the Group, or an operator of assets in which the Group has an interest, has established hydrocarbon exploration and/or production operations in a particular country, it may be expensive and logistically burdensome to discontinue such operations should economic, political, physical or other conditions subsequently deteriorate. All of these factors could materially adversely affect the Group's business, results of operations, financial condition or prospects.

The Group operates in countries with less developed legal systems

1.10 Some of the countries in which the Group operates, may have less developed legal systems than countries with more established economies, which may result in risks such as:

a) effective legal redress in the courts of such jurisdictions, whether in respect of a breach of law or regulation or in an ownership dispute, being more difficult to obtain;

b) a higher degree of discretion on the part of governmental authorities;

c) a lack of judicial or administrative guidance on interpreting applicable rules and regulations;

d) inconsistencies or conflicts between and within various laws, regulations, decrees, orders and resolutions; or

e) relative inexperience of the judiciary and courts in such matters.

In certain jurisdictions the commitment of local business people, government officials and agencies and the judicial system to abide by legal requirements and negotiated agreements may be more uncertain, creating particular concerns with respect to licences and agreements for business. These may be susceptible to revision or cancellation and legal redress may be uncertain or delayed. There can be no assurance that joint ventures, licences, licence applications or other legal arrangements will not be adversely affected by the actions of government authorities or others and the effectiveness of and enforcement of such arrangements in these jurisdictions cannot be assured.

The Group is exposed to the risks of fraud and corruption

1.11 As upstream oil and gas exploration and production companies, the Group is exposed to the risks of fraud and corruption both internally and externally. In addition, some of the Group's activities are located in countries where corruption may exist. The Group seeks to comply fully with legislation such as the UK Bribery Act 2010 and has put in place internal control policies and external diligence and compliance policies. However, there can be no assurance that such procedures and established internal controls will adequately protect against fraudulent and/or corrupt activity and such activity could have an adverse effect on the Group's business, reputation, results of operations, financial condition and/or prospects.

If the Company and PIL (together, the "Companies") were to be unsuccessful in the AAIC Litigation, PIL, whose obligations are guaranteed by the Company, may be required to make significant payments to AAIC. It may also be required to make significant payments to Mr Maza if he were to persuade the High Court to set aside the Maza Judgment and if the Companies were to be unsuccessful in their subsequent action to set aside the Maza Agreements.

1.12 The AAIC Litigation is currently before the High Court of Ireland (the "High Court") and the substantive court hearing is expected to occur in late 2014 or early 2015.

The Directors believe that a fraud was committed on the Companies at the time that the AAIC Agreements and the Maza Agreements were entered into in 2004 and 2005, that the Agreements were ultra vires and/or entered into under duress and that, consequently, those Agreements are invalid or ought to be rescinded.

If the Companies were to be unsuccessful in the AAIC Litigation and the High Court were to find the AAIC Agreements to be valid and binding obligations of PIL, PIL could be required to pay AAIC:

(a) approximately US$3 million plus interest in respect of contractual payments due under the AAIC Agreements; and

(b) further payments in the future of a sum amounting to a 2.5% share of PIL's income, exclusive of taxation or duty of any kind arising from the sale by PIL of hydrocarbons from the Isarene Blocks pursuant to the PSC, after deduction of allowable and other costs.

The Companies might also incur additional expense in connection with the AAIC Litigation and any subsequent appeals and any related litigation (including any enforcement actions).

The Companies have obtained a judgment (in default of appearance) in the High Court against Mr Maza, declaring that the Maza Agreements were induced by Mr Maza's fraudulent misrepresentations and were in breach of trust or were knowingly obtained by inducing a breach of fiduciary duty, and were consequently void.

Whether or not the Companies were to be unsuccessful in their action against AAIC, Mr Maza might request the High Court to set aside the Maza Judgment and permit him to defend the claim brought against him by the Companies to set aside the Maza Agreements. The Company has received legal advice that it would be difficult for Mr Maza to convince the High Court that he should be allowed to defend the proceedings at that stage, although that possibility cannot be ruled out.

If Mr Maza was granted permission by the High Court to defend the claim brought against him by the Companies, and if the High Court were subsequently to find that the Maza Agreements were valid and binding obligations of PIL, PIL could be required to pay Mr Maza:

(a) approximately US$6 million plus interest in respect of contractual payments due under the Maza Agreements; and

(b) further payments in the future of a sum amounting to a 5% share of PIL's income, exclusive of taxation or duty of any kind arising from the sale by PIL of hydrocarbons from the Isarene Blocks pursuant to the PSC, after deduction of allowable and other costs.

The Companies might also incur additional expense in connection with such proceedings, any subsequent appeals and any related litigation (including any enforcement actions).

If facts or circumstances exist relating to the subject matter of the AAIC Litigation and/or the Maza Judgment such as to lead to investigations being commenced or action being taken against the Company, the Group may suffer significant financial losses and/or reputational damage.

1.13 In the event that some improper conduct by the Companies, their former directors or former employees relating to the subject matter of the AAIC Litigation and/or the Maza Judgment is found to have taken place, investigative, administrative, legal, or regulatory prosecutions, actions or proceedings may be brought against the Companies in Ireland or elsewhere asserting, for example, breach of applicable laws or regulations, breach of contractual or other obligations, a failure to fulfil a condition or liability for damages.

The Group may incur significant costs and expenses in investigating, defending and/or settling any such actions or proceedings. In addition, any such actions or proceedings may result in the Group suffering significant losses, damages, fines, penalties or liabilities, or result in censure, reprimand, adverse publicity and reputation damage of or to the Group, any of which could have a material adverse impact on the Group and its business, results of operations, financial position, future performance and future prospects, particularly if such actions or proceedings were to affect the Group's oil and gas exploration and development licences or agreements in Algeria or elsewhere (or the Company's participation in these licences or agreements), the loss of which would have a material adverse impact on the Group and its business, results of operations, financial position, future performance and future prospects.

Failure to meet work commitments, premature termination, suspension or withdrawal of licences or failure to extend licences may have an adverse effect on the Group's reserves and prospects

1.14 The Group has 42 licences, permits and production sharing contracts, many of which have work programme commitments that must be carried out within certain agreed timeframes. Material non-compliance with these work commitments within the currently required timeframes, or failure to successfully negotiate extensions to the time permitted to carry out these work plan commitments, could result in the Group losing those relevant interests and the associated resource potential therein and also restrict the ability to obtain new licences in the relevant jurisdictions. The Group's rights to exploit many of its oil and gas assets are limited in time. There is no guarantee or assurance that such rights can be extended or that new rights can be obtained to replace any rights that expire.

1.15 If the Group is unable or unwilling to fulfil the specific terms of any of its existing or future rights, concessions, licences, permits and other authorisations or if it operates its business in a manner that violates applicable law, government regulators may impose fines or suspend or terminate the relevant right, concession, licence, permit or other authorisation, any of which could have a material adverse effect on the Group's results of operations, cash flows and financial condition. Furthermore, as licence terms and commitments are typically set by governments, unexpected and significant changes to licence terms and commitments could significantly impact the value of those licences to the Group.

The Group has Italian assets which have been and may in the future be impacted by an Italian offshore drilling moratorium

1.16 A number of the Group's offshore Italian permits and a number of its offshore permit applications have been delayed in each instance due to Legislative Decree 128/10 (the "2010 Decree") which restricted certain offshore oil and gas activities in Italy. In June 2012, Law Decree 83/2012 converted with no substantial modifications into Law 134/2012 (the "2012 Decree"). The 2012 Decree was passed to provide that, inter alia, the 2010 Decree would no longer apply to i) applications for any titles that were under review at the time the 2010 Decree came into force, and any connected or subsequent proceedings; ii) any titles, including exploration licenses that had already been issued prior to the 2010 Decree coming into force; and iii) any proceedings connected with or subsequent to such titles, including possible extensions of the same. Following the 2012 Decree, the Group has resumed its planning for an appraisal well on the Elsa Discovery offshore Abruzzo, a priority area identified by the 2012 Decree. Although the 2012 Decree removes some of the uncertainty concerning exploration, development and production activities in Italian waters, there can be no certainty that the Group will be able to recommence some or all of its planned offshore exploration and development activities in Italy which may result in a loss in value in some or all of the Group's Italian offshore interests.

The Group's success depends on the ability to find, acquire, appraise, develop and produce oil and gas reserves that are economically recoverable

1.17 Exploration, appraisal, development and production of oil and natural gas reserves are speculative and involve a significant degree of risk. The long-term commercial success of the Group will depend on its ability to find, acquire, develop and commercially produce oil and natural gas reserves, principally through its assets in Egypt, Bulgaria, Algeria, Italy, the Kurdistan Region of Iraq, Romania and other countries in which it may own or acquire assets. Risks normally incidental to such activities including blowouts, oil spills, explosions, fires, equipment damage or failure, natural disasters, geological uncertainties, unusual or unexpected rock formations, abnormal pressures, availability of technology and engineering capacity, availability of skilled resources, maintaining project schedules and managing costs, as well as technical, fiscal, regulatory, political and other conditions. Furthermore, given the early stage of development of the Group's assets outside of Algeria, Egypt and Bulgaria, no proved or probable reserves have been estimated in connection with these assets as of the date of this Announcement. There is no assurance that oil and gas will be discovered on the existing oil and gas assets of the Group, or assets acquired in the future by the Group or, if there are oil and gas discoveries that the Group will be able to realise those reserves as intended. Additionally, the Group may be unable to reach an agreement with government authorities on the terms on which it may commence production to commercialise reserves.

1.18 A proportion of the Group's activity will be conducted offshore. The Group currently hold a number of offshore licences in the Black Sea in relation to its Bulgarian and Romanian assets and in the Central Adriatic in relation to its Italian assets. Exploration, development and production of offshore hydrocarbon reserves and the infrastructure required to produce them involves an increased risk relative to onshore activity and may result in additional costs relating to the technical difficulties of operating offshore.

The Group's business will require substantial capital expenditure and will be primarily reliant on existing cash reserves, debt facilities and cash flows from production

1.19 The Group's activities are heavily capital intensive and the Group will need to continue to make substantial capital expenditures in the exploration, development and production stages of its business. To date, the Group's capital expenditures have been primarily financed with capital contributions from its Shareholders, proceeds from the farm down of interests in its assets, cash flows from production and debt financing. There can be no certainty that the Group will achieve sustainable or positive cash flows from its operating activities.

1.20 In the longer term, the Group may need to raise additional external capital to fund (i) future development activities, which may result from exploration success, (ii) work commitments on its interests, (iii) acquisitions or (iv) for other purposes. These capital requirements may be in excess of the Group's cash reserves and available debt finance. In addition, in the longer term, the Group may need to raise new finance to fund other aspects of its operations including exploration, appraisal and production. The Group's ability to fund its obligations and activities in the longer term may be dependent upon obtaining appropriate external financing in the form of debt, joint ventures and/or farm-outs (or a combination thereof), and new equity.

If Admission of the Placing Shares does not occur, or if only Admission of the First Tranche Shares were to occur, the Company would have to seek alternative forms of finance and/or undertake other activities such as delaying or reducing capital expenditure

 1.21 The Placing is being made in two tranches. The First Tranche Placing is conditional upon, among other things, admission of the First Tranche Shares to trading on AIM and to trading on the ESM and on the Placing Agreement not having being been terminated prior to Admission of the First Tranche Shares. The First Tranche Placing is being made under the existing authority to issue new shares on a non-pre-emptive basis granted to the Directors on 30 May 2013 and so does not require additional shareholder approval. The Second Tranche Placing is conditional upon, among other things, the passing of the Resolution at the EGM of the Company, on Admission of the Second Tranche Shares to trading on AIM and ESM and on the Placing Agreement not having being been terminated prior to Admission of the Second Tranche Shares.

Accordingly, if Admission of the First Tranche Shares does not occur or if the Placing Agreement is terminated before Admission of the First Tranche Shares, the Company will not receive any of the proceeds of the Placing. In addition, if the Resolution is not passed, or if the Placing Agreement is terminated following Admission of the First Tranche Shares but prior to Admission of the Second Tranche Shares, the Company will only receive the proceeds of the First Tranche Shares. In such circumstances, Placees will only subscribe for the First Tranche Shares and will not be entitled to subscribe for the Second Tranche Shares.

If the Company does not receive the proceeds of the First Tranche Shares and/or the Second Tranche Shares, the Company would have to seek alternative forms of finance and/or undertake other activities such as delaying or reducing capital expenditure. Failure to secure alternative forms of finance at all or on commercially acceptable terms, or undertaking other activities such as delaying or reducing capital expenditure, could have a material adverse effect on the Group's business, prospects, financial condition and results of operations.

There can be no certainty that covenants contained in the Group's debt facility will not be breached

1.22 On 12 April 2013, Petroceltic and certain of its subsidiaries (the "Obligors") entered into a new financing facility with HSBC, the International Finance Corporation, Nedbank Limited and Standard Chartered Bank (together the "Lenders") (the "Senior Financing Facility"). The Senior Financing Facility is up to $500 million reserve based lending facility, which will be contractually repaid over time in accordance with an agreed reduction schedule. As such, the maximum amount available under the Senior Financing Facility reduces over its term. In addition, the available amount at any time is also constrained by the then applicable borrowing base amount, which is calculated (and re-calculated every six months or as requested by the Lenders and/or the Obligors) in accordance with its terms through the use of a financial model on the basis of a number of economic and technical assumptions (including, for example, commodity price assumptions and technical projections with respect to the likely recovery of hydrocarbons from the relevant assets). Consequently, due to variations in the assumptions used as inputs to the financial model, the amount which may be available to be borrowed from time to time under the Senior Financing Facility may be lower than the commitments as set out in the reduction schedule. The Senior Financing Facility is required to be repaid in full on 30 April 2018, or may be requested by Petroceltic to be extended up to 30 April 2020 (dependent on the acceptance by all lenders), at which time the Group may need to obtain further facilities. There can be no guarantee that the Group will be able to refinance the Senior Financing Facility when needed or that such refinancing will be available on terms favourable to the Group. A number of factors (including conditions in the credit, debt and equity markets and general economic conditions) may make it difficult for the Group to obtain replacement financing on favourable terms or at all. Failure to obtain replacement financing on a timely basis, on acceptable terms or at all, could result in a number of significant adverse impacts on the Group, including forfeiture or disposal of its interest in some or all of its oil and gas assets, significant penalties and other costs, restricting the ability of the Group to operate its business.

The Group may be subject to risks associated with wider market conditions

1.23 The deterioration in the global economy and the volatility of international markets over recent years caused a number of major governments and central banks to undertake unprecedented levels of intervention designed to stabilise global and domestic financial systems, stimulate new lending and support structurally important institutions at risk of failing. Many developed economies experienced severe recession while growth rates slowed in many emerging economies, with serious adverse consequences on asset values, employment levels, consumer confidence and levels of economic activity. Interest rates fell in absolute terms to historic lows in many markets, while trade flows contracted. Whilst global equity markets have stabilised, performing strongly on the whole during 2013, international equity markets and currency markets remain susceptible to volatility. The Group's financial condition and business prospects are affected by global and local economic and market conditions. Any deterioration of these conditions could have a material adverse effect on the Group's business, prospects, financial condition and results of operations, and the trading price of Ordinary Shares.

Dry wells may lead to a downgrading of the potential value of the Group's licences, concessions or production sharing contracts or require further funds to continue exploration work

1.24 Many of the areas being explored by the Group, have a number of prospects for the discovery of oil and gas. Should drilling be undertaken in a particular geographic area but no oil and gas is discovered (a "dry well"), this may lead to a downgrading of the potential value of the licences, concessions or production sharing contracts concerned and may impact the value of other licences, concessions or production sharing contracts within the same geological basin, as well as implying that the other prospects within that geographic area may be less likely to yield exploration success, thereby potentially decreasing the value of the Group's assets. If this is the case, once the minimum work commitments under the relevant licences, concessions or production sharing contracts have been satisfied, the Group may relinquish its interests in the licences, concessions or production sharing contracts, in which case they would have no further exploration rights, even though they may have identified a number of additional prospects in that area.

1.25 Dry wells may also result in the Group requiring substantially more funds if it chooses to continue exploration work and drill further wells beyond the existing minimum work commitments. Such funding may be unavailable or may have to be obtained on unfavourable terms, leading to a potential deterioration in financial position. Drilling a dry well would also mean that the Group may not be able to recover the costs incurred in drilling that well or make a return on its investment, resulting in significant exploration expenditure being written off. Any of these circumstances may have a material adverse effect on the business, prospects, financial position and results of operations of the Group.

The Group will have to undertake significant development activities

1.26 The Group's ability to develop successfully its licences, concessions and production sharing contracts for hydrocarbon production depends on the Group's operating ability to conduct complex development projects in a timely and cost-effective manner. This in turn relies on the availability of and access to skilled personnel and contractors in the area of the development activity. There can be no guarantee that the Group will be successful in meeting its development programme timelines on budget without significant time delays or capital budget overruns.

1.27 The development of the Ain Tsila field by the Group and its joint venture partners will require significant capital expenditure. The capital estimate for the field development plan will be finalised by the Group and its joint venture partners following the completion of a Front End Engineering and Design ("FEED") study, which is expected to be completed by the end of 2014. It is intended that the Group will provide its funding commitments for the Ain Tsila field through a combination of cash flows from operations, the Senior Financing Facility and from the completion of the second farmout of an additional 18.375 per cent of the Group's equity in the Isarene PSC to Sonatrach. There can be no assurance that the Group will be able to secure the necessary funds for its financing commitment of the Ain Tsila development, or that the Group and its joint venture partners will be successful in meeting the development programme timeline on budget or without significant time delays or capital budget overruns.

1.28 In October 2013, Sonatrach exercised its right under the Isarene PSC to pre-empt the Group's proposed sale of a 18.375 per cent interest in the Isarene PSC. The amendment to the Isarene PSC required to give effect to the transfer was signed by Petroceltic, Sonatrach and Enel in February 2014. Formal completion of the assignment to Sonatrach remains subject only to final ratification by the Algerian government authorities. Whilst the Director's believe that final ratification by the Algerian government authorities will be forthcoming, there can be no assurance as to the timing of final ratification, or that such ratification will occur at all.

There is a risk that recovery of hydrocarbons may not be technically or economically feasible

1.29 The Group's ability to develop successfully its licences, concessions and production sharing contracts for hydrocarbon production depends not only upon the presence of significant in-place hydrocarbon resources in the concession areas, but also on the ability of the Group to recover such resources in a commercially viable manner. There can be no guarantee that the Group will be able to recover any hydrocarbons in its concession areas or that it will be able to do so at a cost that makes production commercially feasible.

1.30 Further, even if recovery of such hydrocarbons is technically feasible in the Group's concessions, there is a risk that it may not be commercially viable due to the costs of the technology, drilling, equipment and other resources needed to extract the hydrocarbons from the reservoirs, all of which will depend to a significant extent on the specific conditions of each particular reservoir. The commercial viability of any particular reservoir will be largely a function of the prevailing prices for oil and natural gas compared to the costs of extracting hydrocarbons from that reservoir, such that a higher cost base for a particular reservoir, whether due to its particular geophysical qualities or otherwise, could make profitable extraction from that reservoir impossible. If the Group is unable to recover additional hydrocarbons from its licences, concessions and production sharing contracts at all due to geological factors or technical limitations, or if it is able to recover hydrocarbons only at a cost which makes production commercially unviable, this would have a material adverse effect on the Group's business, prospects, financial condition and results of operations.

1.31 Future oil and natural gas exploration may involve unprofitable efforts, not only from unsuccessful wells, but from wells that are productive but do not produce sufficient revenues to return a profit after deduction of expenditures, including the cost of drilling and operating expenses. Completion of a well does not assure a profit on the investment or the recovery of drilling, completion and operating costs. In addition, drilling hazards or environmental damage may greatly increase the cost of operations, and field operating conditions may adversely affect the production from productive wells. These conditions include delays in obtaining governmental approvals or consent, restrictions on production from particular wells resulting from extreme weather conditions, insufficient storage or transportation capacity or other geological and mechanical conditions.

 The Group will be required to rely on third-party operators and other joint venture partners and is typically required to consult these partners in relation to significant matters

1.32 It is common in the oil and gas industry for companies to form joint ventures with other companies through which exploration, development and operating activities for a particular property or concession area are conducted. In such cases, one company is designated by agreement amongst the joint venture, to manage or "operate" the joint venture. The operator is the primary point of contact for the regulator, national oil company or the government and is responsible for maintaining positive relationships with the relevant authorities. The operator is also responsible for implementing the field work by entering into agreements with various sub-contractors to provide drilling rigs and other equipment and services necessary for carrying out exploration and development operations. As a result, the Group may have limited ability to exercise influence over the operations and associated costs of those assets which it does not operate, and which could adversely affect the Group's financial performance.

1.33 The Carisio exploration permit in the Po Valley in Italy is operated by a third party, Eni S.p.A., the Dinarta and Shakrok blocks in the Kurdistan Region of Iraq are operated by Hess Corporation, and the El Qa'a Plain and North Thekah licences in Egypt are operated by Dana Petroleum and Edison, respectively. As a result the Group may have limited ability to exercise influence over the operations of these assets or their associated costs, which could adversely affect the Group's financial performance. The Group will be dependent on the competence and judgement of third-party operators with regard to these non-operated assets. The participants in these assets proportionately share liability for any claims and liabilities which may arise as a result of the operator's activities carried out for the benefit of the participants (as the case may be). Should the operator of any of the Group's assets become subject to any liabilities, the Group may also be subject to a part of such liability. In addition, the Group will be dependent on its partners' operations for the timing and quality of activities and may be less able to control these activities or the forward plans for the development of its non-operated assets.

The Group has contractual arrangements in place with a number of third parties for sales and service providers

1.34 The Group has material contracts in place with parties for marketing and sales activities and, from time to time, with service contractors for drilling, construction and other activities. Should any of these parties experience any difficulties or default on such contractual agreements, this could adversely affect the Group's business, prospects, financial condition and results of operations. In particular, there are a limited number of possible counterparties for the Group's gas sales agreements. Should current marketing and sales arrangements experience any interruption, there can be no guarantee that alternative arrangements can be put in place. In addition, it is not possible to guarantee that any future contracts will be available or can be entered into on economically beneficial terms.

The Group may not be able to manage the expansion of its operations effectively through organic growth or acquisitions

1.35 There is no certainty that all, or indeed any, of the elements of the strategy for the Group will develop as anticipated or that the Group will become profitable. In the event that the Group's operations are successful, the Group's current systems, procedures and controls will need to be expanded and strengthened to support the Group's future operations. There can be no assurance that the Group will be able to manage successfully the expansion of its operations through organic growth or acquisitions. Any failure of the Group to manage successfully its growth and development could have a material adverse effect on its business, prospects, financial condition or results of operations.

The Group is dependent on the attraction and retention of key employees

1.36 The Group's success depends, to a large extent, on key personnel, which include, inter alia, certain key executive Directors, senior management and country managers. The loss of the services of any of these personnel could have a material adverse effect on the Group. The competition for qualified personnel in the oil and gas industry is intense. There can be no assurance that the Group will be able to continue to attract and retain all personnel necessary for the development and operation of its business.

 The Group is subject to future decommissioning liabilities

1.37 The Group, through its licence interests, has assumed certain obligations in respect of the decommissioning of its fields and related infrastructure and is expected to assume additional decommissioning liabilities in respect of its future operations. These liabilities are derived from legislative and regulatory requirements concerning the decommissioning of wells, transportation and production facilities and require the Group to make provision for and/or underwrite the liabilities relating to such decommissioning. Any significant increase in the actual or estimated decommissioning costs that the Group incurs may adversely affect the results of operations and financial condition of the Group. There can be no assurance that the Group will not in the future incur decommissioning charges since local or national governments may require decommissioning to be carried out in circumstances where there is no current express obligation to do so, particularly in case of future licence renewals.

The Group may be adversely affected by litigation or adverse publicity

1.38 There can be no guarantee that the past, current or future actions of the Group will not result in litigation, and there have been a number of cases where the rights and privileges of oil and gas companies have been the subject of litigation. Defence and settlement costs can be substantial, even with respect to claims that have no merit. Due to the inherent uncertainty of the litigation process, there can be no assurance that the resolution of any particular legal proceeding will not have a material adverse effect on the Group's business, financial condition or results of operations. In addition, the adverse publicity surrounding such claims may have a material adverse effect on business performance and reputation.

Fluctuations in currency exchange rates may impact the business, results of operations and/or financial condition of the Group

1.39 The US Dollar is the primary currency in which the Group conducts business, while a proportion of revenues are received in Bulgarian Leva, which is pegged to the Euro. Similarly, certain costs, capital expenditures, assets and liabilities of the Group are denominated in US Dollars, Egyptian Pounds, Algerian Dinars, Bulgarian Leva, Romanian Lei, Euro or Sterling. The Group also incurs borrowings in US Dollars for both corporate purposes and development projects. The Group generally seeks to match the currency of its revenue and expenses for its operations to reduce its exposure to currency fluctuations but, in limited circumstances, the revenue and expenses may be in different currencies and, therefore, subject to foreign exchange risk, which may have an adverse effect on the Group's results of operations and financial position. In addition, the Group may have other expenditure (in particular central administrative costs) and equity funding denominated in other currencies, most notably Sterling and Euro. The Group presents its consolidated financial statements in US Dollars and, consequently, the presentation of the consolidated financial statements may be affected by movements in foreign exchange rates and particularly by Sterling/US Dollar and Euro/US Dollar exchange rates.

The Group's risk management policies and procedures may leave it exposed to unidentified or unanticipated risks

1.40 The Group's activities will be exposed to commodity price, foreign exchange, interest rate, counterparty (including credit), operational, regulatory and other risks. The Group's policies and procedures to identify, monitor and manage risks may not be fully effective in the future. Failure to mitigate all risks associated with the Group's business could have a material adverse effect on the Group's business, results of operations and financial condition.

 2. RISKS RELATING TO THE OIL AND GAS INDUSTRY

The oil and gas industry is intensely competitive and the Group, may not be able to compete effectively

2.1 The oil and gas industry is intensely competitive, particularly in securing access to exploration acreage, gas markets, oil services and rigs, technology and processes and human resources. The Group's competitive position depends on geological, geophysical and engineering expertise, financial resources, the ability to develop its properties and the ability to select, acquire and develop proved reserves. The Group will compete with a substantial number of other companies which have a larger technical staff and greater financial and operational resources. Many such companies not only engage in the acquisition, exploration, development and production of oil and gas reserves, but also undertake refining operations and market refined products. The Group will compete with major and independent oil and gas companies and other industries supplying energy and fuel in the marketing and sale of oil and gas to transporters, distributors and end users, including industrial, commercial and individual consumers.

2.2 The Group will compete with other oil and gas companies in attempting to secure drilling rigs and other equipment necessary for drilling and completion of wells and to construct production and transmission facilities. Such equipment may be in short supply from time to time. The costs of third party services and equipment have increased significantly over recent years and may continue to rise. Scarcity of equipment and services and increased prices may, in particular, result from any significant increase in regional exploration and development activities which in turn may be the consequence of increased or continued high prices for oil or gas. Additionally, companies not previously investing in oil and gas may choose to acquire licences or reserves to establish a firm supply or simply as an investment. Competition for exploration and production licences may, therefore, increase in the future, and may lead to increased costs associated with the Group's activities, and fewer available growth opportunities. Such competition in the oil and gas industry could have a material adverse effect on the Group's business, prospects, financial condition or results of operations.

Current reserves and resources data are only estimates and are inherently uncertain

2.3 The estimation of underground accumulations of oil and gas is a subjective process aimed at understanding the statistical probabilities of recovery. These are not exact determinations. Estimates of the quantity of economically recoverable oil and gas reserves, rates of production, net present value of future cash flows and the timing of development expenditures depend upon several variables and assumptions, including the following: (i) historical production from the area compared with production from other comparable producing areas; (ii) interpretation of geological and geophysical data; (iii) effects of regulations adopted by governmental agencies; (iv) future percentages of international sales; (v) future oil and gas prices; (vi) capital expenditure; and (vii) future operating costs, royalties, tax on the extraction of commercial hydrocarbons, development costs and workover and remedial costs. The assumptions upon which the estimates of the Group's hydrocarbon reserves, resources or production profiles have been based may change over time or prove to be incorrect. The Group may be unable to recover and produce the estimated levels or quality of hydrocarbons set out in this Announcement and if this proves to be the case, the Group's business, prospects, financial condition or results of operations could be materially adversely affected.

2.4 As all reserves and resources estimates are subjective, each of the following items may differ materially from those assumed in estimating reserves and resources: (i) the quantities and qualities of oil and gas that are ultimately recovered; (ii) the production and operating costs and capital expenditure incurred; (iii) the amount and timing of additional exploration and future development expenditures; and (iv) future oil and gas prices.

2.5 Many of the factors, assumptions and variables used in estimating reserves and resources are beyond the Group's control and may prove to be incorrect over time. Evaluations of reserves and resources necessarily involve multiple uncertainties. The accuracy of any reserves or resources evaluation depends on the quality of available information and petroleum engineering and geological interpretation. Exploration drilling, interpretation and testing and production after the date of the estimates may require substantial upward or downward revisions to the Group's reserves or resources data. Moreover, different reservoir engineers may make different estimates of reserves and cash flows based on the same available data. Actual production, revenues and expenditures with respect to reserves and resources will vary from estimates, and the variances may be material. The estimation of reserves and resources may also change because of acquisitions and disposals, new discoveries and extensions of existing fields as well as the application of improved recovery techniques.

Oil and gas exploration is speculative, capital intensive and can result in a complete loss of capital

2.6 The risks associated with oil and gas exploration include, but are not limited to, encountering unusual or unexpected geological formations or pressures, unexpected reservoir behaviour, unexpected or different fluids or fluid properties, premature decline of reservoirs, uncontrollable flow of oil, gas or well fluids, inaccurate subsurface seismic drilling, equipment failures, extended interruptions due to (amongst other things) adverse weather conditions, environmental hazards, industrial accidents, lack of availability of exploration and production equipment, explosions, pollution, oil or gas escapes, industrial action and shortages of manpower. Encountering any of these can greatly increase the cost of operations. Extreme weather, adverse geological conditions and other field operating conditions may delay drilling or appraisal activities and can also increase costs. Oil and gas exploration and appraisal projects often involve unprofitable activities, resulting either from dry wells or from wells that may be put into production but do not generate sufficient revenues to return a profit after development, operating and other costs. Completion of a well does not guarantee a profit on the investment or recovery of the costs associated with that well. Any of the above factors could result in a total loss of investment in certain projects, which could have a material adverse effect on the Group's business, prospects, financial condition and results of operations.

Companies within the oil and gas industry may be exposed to commodity price fluctuations

2.7 Oil and gas prices are unstable and are subject to fluctuation. Any material decline in oil and/or gas prices could result in a reduction of the Group's net production revenue and an impairment in the value of its assets. It may become uneconomic to produce from some wells as a result of lower prices, which could result in a reduction in the volumes and value of the Group's reserves. The Group might also elect not to produce from certain wells at lower prices. All of these factors could result in a material decrease in the Group's net production revenue. As such, fluctuations in oil and gas prices could materially and adversely affect the Group's business, financial condition, results of operation and prospects resulting potentially in a reduction in its acquisition and development activities.

2.8 Volatility and uncertainties of the oil and gas industry continue to persist. Any discussion of price or demand is subjective and as such there are many differing opinions on the cause of recent price changes and on the outlook for future prices.

2.9 The relatively high prices for oil, gas and other commodities may benefit the Group in the short-term; however, there is no certainty as to how long these market conditions will last. Along with other oil and gas producers, the Group faces the potential that the demand and prices for oil and gas may fall, perhaps significantly, which may impact on future revenues received by the Group, for oil and natural gas.

Companies within the oil and gas industry are reliant on the availability of equipment and are subject to access restrictions

2.10 Oil and gas exploration and development activities are dependent on the availability of drilling and related equipment in the particular areas where such activities will be conducted. Demand for such limited equipment or access restrictions may affect the availability of such equipment to the Group and may delay exploration and development activities. There can be no assurance that sufficient drilling and completion equipment, services and supplies will be available when needed. Shortages could delay the Group's proposed exploration, development, and sales activities and could have a material adverse effect on its financial condition. If the demand for, and wage rates of, qualified crews rise in the drilling industry then the oil and gas industry may experience shortages of qualified personnel to operate equipment and facilities. This could delay the Group's drilling operations and adversely affect financial condition and results of operations.

The oil and gas industry is sensitive to the cost of new technologies and technology transfer risk

2.11 The oil and gas industry is characterised by rapid and significant technological advancements and introductions of new products and services utilising new technologies. Other oil and gas companies may have greater financial, technical and personnel resources that allow them to enjoy technological advantages and may in the future allow them to implement new technologies either before the Group does so or in circumstances where the Group is not able to do so. There can be no assurance that the Group will be able to respond to such competitive pressures and implement such technologies on a timely basis or at an acceptable cost. One or more of the technologies currently utilised by the Group may become obsolete. If the Group is unable to utilise the most advanced commercially available technology, its respective business, financial condition, results of operations and prospects could be materially adversely affected.

Companies operating within the oil and gas industry are subject to stringent regulations including environmental, and health and safety

2.12 The Group's operations are subject to environmental, health and safety regulations in the jurisdictions in which they operate. Whilst the Director's believe that the Group carries out its activities and operations in material compliance with these environmental, safety and health and sanitary regulations, there can be no guarantee that its contractors or staff will individually comply with the policies and practices in place.

2.13 The discharge of oil, gas or other pollutants into the air, soil or water may give rise to liabilities to foreign governments and third parties and may require the Group to incur significant costs to remedy such discharge. No assurance can be given that changes in environmental laws or their application to the Group's operations will not result in a curtailment of production or a material increase in the costs of production, development or exploration activities or otherwise adversely affect the Group's financial condition, results of operations or prospects. The obtaining of exploration, development or production licences and permits may become more difficult or be the subject of delay by reason of governmental, regional or local environmental consultation, approvals or other considerations or requirements. These factors may lead to delayed or reduced exploration, development or production activity in addition to increased costs.

Oil and gas exploration may cause damage to persons, property and the environment for which the Group may not be adequately insured

2.14 Exploration for oil and gas carries inherent risks. The Group's exploration, development and production activities present several risks such as those of explosions in wells and pipelines and escape of hazardous materials and contamination; major process safety incidents; failure to comply with approved policies; effects of natural disasters and pandemics; social unrest; civil war and terrorism; exposure to general operational hazards; personal health and safety; and crime. The occurrence of any of these events or other accidents could result in personal injuries, loss of life, severe environmental damage entailing containment, clean-up and repair expenses, equipment damage and civil proceedings against the Group, any of which could result in material legal sanctions and financial liabilities, as well as significant reputational damage, and may have a material adverse effect on the Group's business, prospects, financial condition or results of operations. The Group's insurance policies may not cover all liabilities, and the proceeds of insurance applicable to covered risks may not be adequate to cover expenses relating to such losses or liabilities. Insurance may not be available for all risks. In certain circumstances, the Group may elect not to obtain insurance to deal with specific events due to the high premiums associated with such insurance or for other reasons.

 Labour disputes may result in interruption or shutdowns which could have a material adverse effect on the Group's operations

2.15 The Group's contractors or service providers may be limited in their flexibility in dealing with their staff due to the presence of staff associations among their staff. If there is a material disagreement between contractors or service providers and their staff belonging to staff associations, the Group's operations could suffer an interruption or shutdown that could have a material adverse effect on business, results of operations or financial condition.

3. RISKS RELATING TO ORDINARY SHARES OF PETROCELTIC

The value of Ordinary Shares may fluctuate

3.1 The value of Ordinary Shares of Petroceltic may, in addition to being affected by the Group's actual or forecast operating results, fluctuate significantly as a result of a large number of factors, some specific to the Group and its operations and some which may affect oil and gas companies generally and which are outside the Group's control, including, inter alia:

a) the results of exploration, development and appraisal programmes and production operations;

b) changes in the financial performance of the Group, its peers or the industry;

c) changes in laws, rules and regulations applicable to the Group and its operations;

d) general economic, political and other conditions, in particular, in Algeria, Italy, the Kurdistan Region of Iraq, Egypt, Bulgaria, and Romania;

e) fluctuations in the prices of oil, gas and other petroleum products; and

f) fluctuations in the capital markets.

The Ordinary Shares may be unsuitable as an investment

3.2 The Ordinary Shares may not be a suitable investment for all prospective shareholders. Before making a final decision, investors are advised to consult an appropriate independent investment adviser authorised under FSMA if they are in the UK, under the European Communities (Markets in Financial Instruments) Regulations 2007 (Nos 1 to 3) or the Investment Intermediaries Act 1995 (as amended) if they are in Ireland, or if they are not in the UK or Ireland, another appropriately authorised financial adviser who specialises in advising on acquisitions of shares and other securities. The value of the Ordinary Shares and the income received from them can go down as well as up and investors may not recover all or any part of their original investment.

 Investors may not be able to realise returns on their investment in the Ordinary Shares within a period that they would consider to be reasonable

3.3 The share prices of publicly quoted companies can be highly volatile and shareholdings illiquid. The price at which the Ordinary Shares are quoted and the price which investors may realise for their Ordinary Shares may be influenced by a large number of factors, some of which are general or market specific, others which are sector specific and others which are specific to the Group and its operations. These factors include, without limitation, the performance of the Group and the overall stock market, large purchases or sales of Ordinary Shares by other investors, changes in legislation or regulations and changes in general economic, political or regulatory conditions and other factors which are outside of the control of the Group.

The Group will principally aim to achieve capital growth and, at present, the intended dividend policy for the Group will be that all funds available for distribution should be reinvested in the business of the Group. There can be no assurance as to the level of future dividends. The declaration, payment and amount of any future dividends of the Group are subject to the discretion of the Board, and will depend on, among other things, the Group's earnings, financial position, cash requirements and availability of profits and distributable reserves. A dividend may never be paid and at present, there is no intention to pay a dividend.

Shareholders may be exposed to fluctuations in currency exchange rates

3.4 The Ordinary Shares will be quoted on the London Stock Exchange in Stg pence and on the Irish Stock Exchange in Euro. An investment in the Ordinary Shares by an investor whose principal currency is not Sterling or Euro will expose the investor to foreign currency exchange rate risk. Any depreciation of Sterling or Euro in relation to such foreign currency will reduce the value of an investment in the Ordinary Shares in foreign currency terms.

The ability of non-EU Shareholders to bring actions or enforce judgements against the Group or the Directors may be limited

3.5 The ability of an overseas Shareholder to bring an action against the Group may be limited under law. Petroceltic is a public limited company incorporated in Ireland. The rights of holders of Ordinary Shares are governed by the laws of Ireland and by Petroceltic's Memorandum and Articles of Association. These rights may differ from the rights of Shareholders in corporations incorporated in other jurisdictions. All of the Directors are residents of Ireland or the United Kingdom. Consequently, it may not be possible for a non-EU Shareholder to effect service of process within the overseas Shareholder's country of residence upon either the Group or the Directors, or to enforce a judgement obtained in a court of the overseas Shareholder's country of residence against either the Group or the Directors.

Future substantial sales of Ordinary Shares in the public market may depress the share price

3.6 (a) Sales of a substantial number of Ordinary Shares by holders of such shares in the public market could adversely depress the market price of the Ordinary Shares.

(b) Ordinary Shares held by certain Shareholders are secured by way of separate fixed and/or floating charge(s) in favour of certain third party financial institutions. Such financial institutions may exercise certain rights under the effective charge documentation to effect a sale of the Ordinary Shares without the consent of these Shareholders. The financial institutions are under no obligation to abide by any orderly market restrictions which have been agreed to by each Shareholder. This may result in the sale of a substantial number of Ordinary Shares which may adversely depress the market price of the Ordinary Shares.

The Group's largest Shareholder, Skye, is in a position to be able to exercise influence over the affairs of the Group. The interests of Skye may differ from those of other Shareholders

3.7 As at 15 May 2014, Ordinary Shares representing approximately 23.0 per cent of total Ordinary Shares were held by Skye. Robert Adair is chairman of Skye and, together with his personal holdings, has a 23.4 per cent beneficial interest in the share capital of the Company. This concentration of ownership may have the effect of delaying, preventing or deterring a change in control of the Group, depriving Shareholders of an opportunity to receive a premium for their Ordinary Shares as part of any sale of the Group, and affecting the market price of the Ordinary Shares. In addition, Skye will be able to exercise significant influence over matters requiring Shareholder approval, including the election of directors and significant corporate transactions. The interests of Skye may be different from, and conflict with, the interests of the Company or the Company's other Shareholders. Differences between the interests of Skye and the other Shareholders of the Company may lead to conflicts or restrict the Company's ability to implement its business strategy.

The Company intends to apply for a listing on the standard segment of the official list of the UKLA and to the secondary listing segment of the official list of the Irish Stock Exchange. Accordingly, the Company will not be required to comply with those protections applicable to a Premium Listing or Primary Listing, or trading on AIM or ESM.

3.8 The Company intends to apply for a listing on the standard segment of the official list of the UKLA (a "Standard Listing") and the secondary listing segment of the official list of the Irish Stock Exchange (a "Secondary Listing"). As a consequence, additional on-going requirements and protections applicable to companies listed on the premium segment of the Official List in the UK, and the primary listing segment of the Official List in Ireland, will not apply to the Company. In particular, the provisions of Chapters 6 to 13 of the Listing Rules of the UKLA and Chapters 6 to 10 of the Listing Rules of the Irish Stock Exchange, being additional requirements for listing of equity securities (listing principles, sponsors, continuing obligations, significant transactions, related party transactions, dealing in own securities and treasury shares and contents of circulars), will not apply. In addition, a Standard Listing and a Secondary Listing will not permit the Company to gain UK FTSE indexation or ISEQ indexation. Furthermore, on or immediately prior to the commencement of trading of Ordinary Shares on the official lists of the London Stock Exchange and Irish Stock Exchange, the listing of the Company's Ordinary Shares on AIM and ESM will be cancelled, and, as a consequence, the AIM Rules and ESM Rules will no longer apply to the Company. Therefore, the on-going requirements and protections of the AIM Rules and the ESM Rules (in particular, retention of a Nominated Adviser and ESM Adviser, substantial transactions, related party transactions, reverse takeovers, fundamental changes of business, dealings in a close period and company information disclosure on a website) will cease to apply.

The Company may be unable to transition from a Standard Listing to a Premium Listing in the future

3.9 The Directors intend to seek a Premium Listing for the Company, subject to (i) meeting the eligibility criteria contained in Chapter 6 of the UK Listing Rules, (ii) obtaining any necessary approvals; and (iii) market and trading conditions. However, as at the date of this Announcement, the Company has not yet entered into any discussions with the UKLA regarding a Premium Listing. There can be no assurance that the Company will meet the eligibility criteria for a Premium Listing or that a transition to a Premium Listing will be achieved. If the Company does not achieve a Premium Listing, the Company will not be obliged to comply with the higher standards of corporate governance or other requirements which it would be subject to upon achieving a Premium Listing and, for as long as the Company continues to have a Standard Listing, it will only be required to continue to comply with those standards applicable to a company with a Standard Listing. In addition, if the Company was unable to achieve a Premium Listing this may have an adverse effect on the valuation of its Ordinary Shares. Furthermore, investors may not benefit from the enhanced liquidity and broader Shareholder base which can accompany a Premium Listing.

DEFINITIONS

In this Announcement:

"AAIC Consultancy Agreement" means the agreement dated 11 March 2005 between PIL and AAIC;

"AAIC Agreements" means the AAIC Consultancy Agreement, the associated Company guarantee and the Irrevocable Letter of Commitment between the Company and Abdelly and Associés International Consulting Limited;

"AAIC Litigation" means the legal proceedings issued by the Company and PIL in the High Court of Ireland in 2013 against Mr Samir Abdelly and Abdelly and Associés International Consulting Limited arising from the AAIC Agreements;

"Admission" means the admission of the First Tranche Shares or (as the case may be) the Second Tranche Shares to trading on AIM becoming effective in accordance with Rule 6 of the AIM Rules for Companies and the admission of the First Tranche Shares or (as the case may be) the Second Tranche Shares to trading on ESM in accordance with Rule 6 of the ESM Rules for Companies;

"Affiliate" has the meaning given in Rule 501(b) of Regulation D promulgated under the Securities Act or Rule 405 under the Securities Act, as applicable;

"Agreements" means the AAIC Agreements and the Maza Agreements;

"AIM" means AIM, a market operated by the London Stock Exchange;

"Announcement" means this Announcement (including the Appendices to this Announcement);

"ANOGC" means the Algerian national oil and gas company in 2004;

"Bcf" means billion cubic feet, a unit of measurement for large volumes of natural gas;

"Board" means the board of Directors;

"Bookbuild" means the bookbuilding process to be commenced by the Joint Bookrunners, in which they have agreed to use reasonable endeavours to procure placees for the Placing Shares, as described in this Announcement and subject to the terms and conditions set out in this Announcement and the Placing Agreement;

"Circular" means the circular to Shareholders of the Company containing notice of the EGM, which is expected to be posted on 16 May 2014;

"Company" or "Petroceltic" means Petroceltic International plc;

"Consultancy Agreements" means the AAIC Consultancy Agreement and the Maza Consultancy Agreement;

"CREST" means the relevant system, as defined in the Uncertificated Securities Regulations 2001 (SI 2001/3755) (in respect of which Euroclear UK & Ireland Limited is the operator);

"Davy" means J&E Davy, trading as Davy, including its affiliate Davy Corporate Finance;

"Directors" means the directors of the Company from time to time;

"EGM" means the extraordinary general meeting of the Company, proposed to be held on or around 9 June 2014;

"EGPC" means the Egyptian General Petroleum Corporation;

"ESM" means the Enterprise Securities Market of the Irish Stock Exchange;

"FCA" means the Financial Conduct Authority of the United Kingdom;

"First Tranche Placing" means that part of the Placing which relates to the First Tranche Shares and which is not conditional on the passing of the Resolution;

"First Tranche Shares" means the 8,776,870 new Ordinary Shares to be allotted and issued by the Company as part of the Placing pursuant to the existing allotment authority granted to the Directors on 30 May 2013;

"FSMA" means the Financial Services and Markets Act 2000;

"Group" means the Company and its subsidiary undertakings;

"Irish Stock Exchange" means The Irish Stock Exchange plc;

"Isarene PSC" or "PSC" means the Isarene production sharing contract between the Company and ANOGC entered into on 26 September 2004 and which came into effect on 26 April 2005;

"Listing Rules" means the listing rules of the Irish Stock Exchange and/or where appropriate the listing rules made by the UKLA under section 73A of FSMA;

"London Stock Exchange" means London Stock Exchange plc;

"Main Markets" the London Stock Exchange's and/or Irish Stock Exchange's respective main markets for listed securities;

"Maza Agreements" means the Maza Consultancy Agreement, the associated Company guarantee and the Irrevocable Letter of Commitment between the Company, Abdelly and Associés International Consulting Limited and Mr Seghir Maza;

"Maza Consultancy Agreement" means the agreement dated 11 March 2005 between the Company and Mr Seghir Maza;

"Maza Judgment" means the judgment, in default of appearance, against Mr Seghir Maza granted to the Company and PIL by the High Court of Ireland in November 2013. That judgment arose from the legal proceedings issued by the Company and PIL in the High Court of Ireland in 2013 against Mr Maza in relation to the Maza Agreements. The judgment held the Maza Agreements to be void and included judgment in favour of PIL in the amount of US$4.7 million, being an amount previously paid by PIL to Mr Maza pursuant to the Maza Agreements;

"Mirabaud" means Mirabaud Securities LLP;

"MMboe" means million barrels of oil equivalent;

"MMbbl" means million barrels of oil, condensate or natural gas liquids;

"Official List" means the official list maintained by the Irish Stock Exchange and/or the office list of the UKLA, as the context may require;

"Ordinary Share" means an ordinary share of €0.3125 each in the capital of the Company;

"PIL" means Petroceltic Isarene Limited, a subsidiary of the Company;

"Placee" means any person (including individuals, funds or otherwise) by whom or on whose behalf a commitment to subscribe for Placing Shares has been given;

"Placing" means the placing of the Placing Shares by the Joint Bookrunners, on behalf of the Company, with investors;

"Placing Agreement" means the placing agreement dated 16 May 2014 between the Company and the Joint Bookrunners in respect of the Placing;

"Placing Price" means the price per Ordinary Share at which the Placing Shares are placed;

"Placing Shares" means the Ordinary Shares to be issued pursuant to the Placing (being the First Tranche Shares and the Second Tranche Shares), the number of which is to be determined at the close of the Bookbuild;

"Prospectus Directive" means the Directive of the European Parliament and of the Council of the European Union 2003/71/EC, as amended;

"Regulation S" means Regulation S promulgated under the Securities Act;

"Regulatory Information Service" one of the regulatory information services authorised by the Irish Stock Exchange and/or the FCA to receive, process and disseminate regulated information from listed companies;

"Resolution" means the resolution to be set out in the notice of EGM pursuant to which it is proposed that the Directors be authorised to allot the Second Tranche Shares to Placees without first offering those shares to Shareholders;

"Second Tranche Placing" means that part of the Placing that relates to the Second Tranche Shares, which is conditional on the passing of the Resolution;

"Second Tranche Shares" means the new Ordinary Shares to be allotted and issued by the Company as part of the Placing, conditional (inter alia) on the passing of the Resolution;

"Securities Act" means the US Securities Act of 1933, as amended;

"Senior Secured Facility" means the US$500 million revolving senior secured facility agreement entered into by the Company with HSBC and others on 12 April 2013;

"Shareholder(s)" means holder(s) of Ordinary Shares;

"Sonatrach" means Société Nationale pour la Recherche, la Production, le Transport, la Transformation, et la Commercialisation des Hydrocarbures s.p.a., an Algerian government owned company formed to exploit the hybocarbon resources of Algeria;

"South Africa" means the Republic of South Africa;

"Terms and Conditions" means the terms and conditions of the Placing set out in Appendix I to this Announcement;

"tranche" means the First Tranche Placing or the Second Tranche Placing, as applicable;

"UKLA" means the FCA acting in its capacity as the competent authority for the purposes of Part VI of FSMA;

"United Kingdom" or "UK" means the United Kingdom of Great Britain and Northern Ireland;

"United States" or "US" means the United States of America, its territories and possessions, any state of the United States and the District of Columbia;

"US$" means United States dollars, the lawful currency of the United States;

"£" means the lawful currency of the United Kingdom; and

"€" means euro, the lawful currency of the European Union.