Shareholder Q&A - 2018

1 Shareholder updates: A number of shareholders have asked about the frequency of the Company's updates. Our policy has been to provide updates when a regulatory announcement is required under the AIM Rules or other regulation that is applicable to an AIM quoted company. When the Company makes a regulatory announcement, the Company makes efforts to provide additional updates its other operations and projects, so as to maximise the overall disclosure made to investors. However, the Board appreciates that there have been some months when we have had little new to say.

2 Maintaining our listing on AIM: In April 2016, the Company announced that the Board believes that maintaining a share trading facility on AIM is key to the Company executing its strategy. Some shareholders have asked whether our major shareholder supports our continued listing on AIM, and the Company can confirm that this is the case.

3 Share-by- backs versus dividends: Our stated dividend policy is to provide dividends to shareholders at a rate of 10% of our Earnings Before Interest, Tax and Depreciation/ Amortisation (EBITDA), subject to no mitigating circumstances and shareholder approval. The Board believes that this benefits all shareholders. The Board is of the view that a share-by- back programme would initially only benefit those selling into the programme, though remaining shareholders should see benefit, other things being equal, in the longer run through share price appreciation, as there would be fewer shares in issue. The Board believes that a dividend policy provides more flexibility in our view and shows a long-term commitment to our shareholders to share in success over time.

4 Competent Persons Report (CPR): The preparation of the CPR by Blackwatch Petroleum Services, a summary of which was announced on May 2018, took longer than originally anticipated. The Board believed that it was important that the CPR covered the strategic acquisitions made in 2015 and 2016 and also took the Company's progress with drilling into account, so as to maximise the relevant information available to our consultants. As we had changed CPR consultants to Blackwatch Petroleum Services, we were keen that they should make a detailed review of all of our historic and current information from scratch. The result has been most useful to us in our discussions with potential partners for our key operations. The Company announced Blackwatch Petroleum Services' has estimates of reserves in respect of the Company's South Dagi licence when these became available in late 2017.

5 Shareholder meetings: The Directors are more than willing to meet individual shareholders and engage by email, though it must be understood that we can only provide publicly available information.

6 Director share purchases: This is for the individual directors to consider. Under the regulation that is applicable to an AIM quoted company, there are significant periods where directors are not permitted to purchase or sell shares, known as "close periods", and this is quite a limiting factor.

Q: Please clarify the total amount of money loaned for purchase of shares in Kholmsk Port and loans to the Port itself.

A: To the knowledge of the Board, the total of loans is the equivalent of approximately US $3 million, of which US$ 1.5 million has been lent to the Port and 1.5 million for share acquisition by third parties. The Company itself owns 23.1 % of the shares of the Port. As announced, an independent audit is to be undertaken of all such payments, as part of a working capital review.


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