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Roxi Petroleum: 2011 Year Review

Roxi Petroleum plc, the Central Asian oil and gas company with a focus on Kazakhstan, announces its preliminary results for the year ended 31 December 2011.

Financial Highlights 2011

• Loss after taxation of US $ 9.4 million
• Completion of US $ 50 million Galaz farm-out with LGI
• Cancellation of deal with Canamens resulting in return of 35% effective interest in BNG LLP to Roxi
• US $ 23.6 million of loans previously due to Canamens being novated to Roxi in exchange for 1.5% royalty payable by Roxi to Canamens based on future production from BNG LLP 2012 to date
• Signing of US $ 30 million BNG farm-out with KNOC
• Vertom Loan facility increased to US $ 7 million loan
• First oil production revenues as pilot production commences on Galaz

Operational Highlights 2011

• Extension of licence area of Galaz granted
• NW Konys (Galaz) licence extended for 2 years to May 2013
• Airshagil (BNG) licence extended for 2 years to June 2013
• Completion of NW Konys reservoir study (Galaz)
• Initial (time) processing of 1400 km2 3D seismic cube completed on BNG
• 37 prospects and leads mapped at depths of 1700m to 5000m on BNG contract area
• Gaffney Cline completed technical audit of 202 mmbbls risked resources on BNG and 13 mmbbls of most-likely contingent resources on South Yelemes
• Well 136 drilled on North Yelemes to 2900m pending testing and evaluation
• Wells NK-9 and NK-10 drilled on NW Konys to 1500m
• Pilot production licenses and emissions licences granted for South Yelemes and NW Konys 2012 to date
• Preparation, tendering and construction of facilities at NW Konys and South Yelemes to commence pilot production
• Well NK-6 commences pilot production on NW Konys (Galaz) at an average production rate of 155 bpd
• Spud NK-7 well on Galaz

Vertom loan extension

Vertom International NV (“Vertom”) has agreed to extend both the amount of its current loan to Roxi and repayment dates. Accordingly, the amount of the facility will be increased from its current $5 million level to $7 million and the repayment date will be extended from the current 29 September
2013 to 30 April 2014. All other terms of the facility remain unaltered.

Related Party Transaction

As Mr Oraziman is associated with Vertom and is a director of the Company and as Vertom is a significant shareholder in Roxi, the extension of the existing Vertom loan facility is a related party transaction under the AIM Rules. With regard to the Company’s requirement for further funding, the
Independent Directors, being the directors other than Mr Oraziman, have considered alternative sources of funding, including bank debt and the issue of equity, and have concluded that such alternatives would be not available to the Company on terms more beneficial than those offered by

The Independent Directors consider, having consulted with the Company’s nominated adviser, Strand Hanson, that the terms of the increased Vertom $7 million debt facility are fair and reasonable insofar as the Company’s shareholders are concerned.

Summary of Operations

Commenting on the preliminary results, Clive Carver, Chairman of Roxi Petroleum plc, said, “I am pleased to report that your Company made very significant advances in 2011 and has continued to do so in the early months of 2012. The two fundamental issues at the start of 2011 were finding a replacement farm-out partner at BNG and securing the required regulatory consents to allow production at our three principal assets. We will look to leverage on the operational and financial strengths of our farm-out partners KNOC and LGI to increase shareholder value and to report further operational successes as they arise.”


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