Energy SpA — Capital/Financing Update 2016

Nov 18, 2016

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.

The affairs, business and property of Iona Energy Company (UK) Limited ("the Company") is being managed by the Joint Administrators. The Joint Administrators act as agents of the Company and without personal liability.