Energy SpA - Capital/Financing Update 2016

Update to Bondholders

Iona Energy Company (UK) Limited (In Administration)

("the Company")

17 November 2016

Update to Bondholders

We refer to our previous update to bondholders of 15

September 2016.

In that update, we advised that an extension to the

backstop date in the sale and purchase

agreement (SPA) with Bridge Petroleum 2 Limited

("Bridge") had been agreed to 31 October

2016 in return for exclusivity and Bridge agreeing to

cover operating costs.

Since our last update, substantial work was undertaken

to complete prospective funders' due

diligence. However, on reaching 31 October there were

several outstanding components.

Accordingly, we elected not to further extend the

backstop date to the SPA in order to have

greater flexibility to assess alternatives.

Bridge has now advised that they are unable to

complete the transaction under the SPA as a

result of one of their proposed funders determining

that the Orlando development no longer met

their investment criteria.

We have been assessing, and continue to assess,

alternative options available and will provide

further updates as soon as we are in a position to do

so.

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