PetroNeft today announce that the acquisition of an additional 40% interest In Licence 67 from Belgrave Naftogas (formerly Arawak Russia B.V.) has now completed and therefore PetroNeft's interest in this licence has risen from 50% to 90%. PetroNeft also has a 50% operated interest in Licence 61.

Licence 67 contains two oil fields, Ledovoye and Cheremshanskoye and several exploration prospects. In 2016 Rhyder Scott calculated 2P reserves for the Ledovoye field of 14 mmbbls and 3P reserves of 17.4 mmbbls. In 2019 and following the successful C-4 well, the Russian State Reserves Committee approved C1+C2 reserves (approximately equivalent to International 2P reserves) for the Cheremshanskoye field of 19.2 mmbbls. This qualifies the field for a small field partial exemption of the state Mineral Extraction Tax.

Consideration for the acquisition is US$2.9 million which has been satisfied through the Issuance of 80,000,000 PetroNeft ordinary shares ('New Ordinary Shares') to Belgrave Naftogas for a value of US$1.2 million and cash consideration of US$1.7 million, which will be financed through a 3 year loan from Belgrave Naftogas to PetroNeft.

Alastair McBain, chairman of PetorNeft, is also a Director of Belgrave Naftogas which is a wholly owned subsidiary of Sarum Energy Ltd., where Alastair holds a 72% interest. His direct and indirect shareholding in PetroNeft will increase to 92,698,500 ordinary shares representing a 10.08% interest in the Company. In addition, Mr McBain has a US$550,000 interest in the $2.9m Convertible Loan Facility announced on 17 February 2021, where the lenders can elect at any time to convert up to 75% of the outstanding loan to shares at a conversion price of stg£0.02 in year 1 and stg£0.025 in year 2.

Application will be made to the London Stock Exchange and Euronext Dublin for the 80,000,000 PetroNeft ordinary shares to be admitted to trading on AIM and Euronext Growth. It is expected that admission to trading on each exchange will become effective and that dealings in the New Ordinary Shares will commence on AIM and Euronext Growth at 8.00 a.m. on 12 March 2021.

The total issued share capital of the Company, as increased by the New Ordinary Shares, will be 919,356,740 Ordinary Shares.

David Sturt, CEO PetroNeft commented:
"Licence 67 is an asset which we believe has significant potential value for PetroNeft shareholders. Over the last two years our understanding of this licence has improved considerably and we are delighted to be bringing it into production. With oil prices improving and a favorable tax treatment for this licence, we see this as an investment which can deliver significant value at low cost

We look forward to being able to update shareholders further as our operational plan unfolds."

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