Genel Energy - Proxy Solicitation & Information Statement 2012

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION.

If you are in any doubt as to the action you should take, you are recommended to seek your own personal financial advice from your stockbroker, bank manager, solicitor, accountant or other independent financial adviser authorised pursuant to the Financial Services and Markets Act 2000. All Shareholders should consult their professional advisers regarding their own tax position.

If you have sold or otherwise transferred all of your Voting Ordinary Shares in Genel Energy plc, please forward this document and the accompanying documents at once to the purchaser or transferee or to the agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

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Genel Energy plc

(Incorporated and registered in Jersey with number 107897)

Approval for Waiver of Obligations under Rule 9 of the City Code on Takeovers and Mergers

Notice of the General Meeting of Genel Energy plc to be held at The Dickens Room, Holborn Bars, 138-142 Holborn, London EC1N 2NQ on Wednesday, 5 September 2012 at 10.00 a.m. is set out at the end of this document. The Form of Proxy accompanying this document for use in connection with the General Meeting should be completed and returned in accordance with the instructions thereon so as to be received by the Company’s Registrars, Capita Registrars (Jersey) Limited, by hand or by post at PXS, 34 Beckenham Road, Beckenham BR3 4TU by no later than 10.00 a.m. on Monday, 3 September 2012. The recommendation of the Independent Directors on the resolution referred to in this document is set out on page 7 of this document.

J.P. Morgan Limited, which conducts its UK investment banking business as J.P. Morgan Cazenove, is authorised by the Financial Services Authority and is acting for Genel Energy plc, through its Independent Directors, and no one else in relation to the Rule 9 Waiver and will not be responsible to any person other than Genel Energy plc, for providing the protections afforded to its clients, nor for providing advice in relation to the Rule 9 Waiver or in relation to the contents of this document or any transaction or arrangement referred to in this document.

This document is published on 16 August 2012.

	Page
DEFINITIONS	3
PART I LETTER FROM THE INDEPENDENT DIRECTORS	5
PART II INFORMATION ON THE SIGNIFICANT SHAREHOLDERS	8
PART III ADDITIONAL INFORMATION	12
PART IV INFORMATION INCORPORATED BY REFERENCE	26
PART V NOTICE OF GENERAL MEETING	27

PROPOSED TIMETABLE

Latest time for receipt of forms for proxy for use at the General Meeting 10.00 a.m. on Monday, 3 September 2012 General Meeting 10.00 a.m. on Wednesday, 5 September 2012

DEFINITIONS

The following definitions apply in this document, unless the context otherwise requires:

“ Annual Report ” the Company’s Annual Report and Accounts 2011 “ Buyback Authority ” has the meaning given to it in the Letter from the Independent Directors on page 5 of this document “ Company ” or “ Genel Energy ” Genel Energy plc “ Deed of Covenant ” has the meaning given to it in paragraph 6.2 in Part III of this document “ Directors ” or “ Board ” the directors of Genel Energy, whose names are set out in paragraph 2 of Part III of this document “ Disclosure Date ” Close of business (5.00 p.m. London time) on Wednesday, 15 August 2012, being the latest practicable date prior to the publication of this document “ Disclosure Period ” has the meaning given to it in paragraph 4.7 in Part III of this document “ Elysion ” Elysion Energy Holding B.V. “ Escrow Agreement ” has the meaning given to it in paragraph 6.3 in Part III of this document

“ Focus ” Focus Investments Limited “ Founders ” means Tony Hayward, Julian Metherell, Nathaniel Rothschild and Tom Daniel “ GEIL ” Genel Energy International Ltd. “General Meeting” the general meeting of the Independent Shareholders of the Company called pursuant to the notice set out in Part V of this document

“ Group ” the Company and its subsidiaries

“ Independent Directors ” the Directors, excluding Murat Yazici and Gulsun Nazli Karamehmet-Williams

“ Independent Shareholders ” Voting Ordinary Shareholders other than the Significant Shareholders and/or their respective nominees

“ London Stock Exchange ” London Stock Exchange plc

“ Maximum Voting Percentage ” such percentage as would, in the event of a Significant Shareholder or any of its affiliates subsequently acquiring one additional Voting Ordinary Share, result in a Significant Shareholder or any of their respective affiliates being required to make a mandatory offer for the Company under Rule 9 of the Takeover Code. The Maximum Voting Percentage is set to ensure that the Significant Shareholders and their affiliates’ aggregate voting interest in the Company remains below 30 per cent. of the total Voting Ordinary Shares

“ Merger Agreement ” has the meaning given to it in paragraph 6.1 in Part III of this document

“ Official List ” the Official List of the UK Listing Authority “ Ordinary Shares ” Voting Ordinary Shares and Suspended Voting Ordinary Shares “ Panel ” the Panel on Takeovers and Mergers “ Performance Share Plan ” the Company’s long-term executive performance share plan “ PRM ” Petroleum Resources Management N.V.

“ Relationship Agreement ” has the meaning given to it in paragraph 6.5 in Part III of this document “ Rule 9 Waiver ” a waiver (further details of which are set out on pages 6 and 7 of this document) of the obligation to make a general offer under Rule 9 of the Takeover Code granted by the Panel conditional on the approval of the Independent Shareholders by the passing of the Waiver Resolution

“ Security Interest Agreement ” has the meaning given to it in paragraph 6.4 in Part III of this document “ Shareholders ” the holders of Voting Ordinary Shares “ Significant Shareholders ” means Elysion, Focus and PRM

“ Suspended Voting Ordinary means the suspended voting ordinary shares of £0.10 each in the Shares ” share capital of the Company “ Takeover Code ”

the City Code on Takeovers and Mergers

“ Voting Ordinary Shares ” voting ordinary shares of £0.10 each in the share capital of the Company

“ Waiver Resolution ” the resolution set out in the notice of General Meeting and which is to be proposed as an ordinary resolution

PART I

LETTER FROM THE INDEPENDENT DIRECTORS

Genel Energy plc

( Incorporated and Registered in Jersey with No 107897 )

Independent Directors Registered Office: Rodney Chase, CBE 12 Castle Street Tony Hayward St. Helier Julian Metherell Jersey JE2 3RT Jim Leng Sir Graham Hearne Mehmet Öğütçü Mark Parris George Rose Nathaniel Rothschild Chakib Sbiti

16 August 2012

To Voting Ordinary Shareholders

Dear Shareholder

Approval for Waiver of Obligations under Rule 9 of the City Code on Takeovers and Mergers

Introduction and Background

This document, which contains a notice of General Meeting is being posted to all Shareholders today. The General Meeting is to be held at The Dickens Room, Holborn Bars, 138-142 Holborn, London EC1N 2NQ at 10.00 a.m. on Wednesday, 5 September 2012.

At the Company’s Annual General Meeting held on 22 May 2012, the Company received authority from its Shareholders to make market purchases of its own Voting Ordinary Shares as permitted by its Articles of Association. The authority limits the number of Voting Ordinary Shares that could be purchased to a maximum of 21,347,954 (representing approximately 10 per cent. of the aggregate issued Voting Ordinary Share capital of the Company as at 19 April 2012) and sets minimum and maximum prices at which such purchases can be made (the “ Buyback Authority ”). The Buyback Authority will expire at the conclusion of the next AGM of the Company.

On completion of the merger between the Company and GEIL in November 2011, the Significant Shareholders (who were the sellers of GEIL) agreed to limit the number of Voting Ordinary Shares that they received in connection with the merger in order to ensure that their aggregate holding of Voting Ordinary Shares (together with the holdings of their affiliates) would not exceed the Maximum Voting Percentage. The balance of the consideration received by the Significant Shareholders in connection with the merger took the form of Suspended Voting Ordinary Shares. Further details on the Suspended Voting Ordinary Shares are set out in the description of the Merger Agreement in paragraph 6.1 of Part III of this document. The Significant Shareholders are deemed to be acting in concert under the Takeover Code.

If, at some point in the future, the Company were to resolve to repurchase Voting Ordinary Shares in the market pursuant to the Buyback Authority, and the Significant Shareholders do not participate pro rata to their interest in the Voting Ordinary Shares in any such repurchases, the aggregate holding of the Significant Shareholders in Voting Ordinary Shares would increase above the Maximum Voting Percentage (i.e. 30 per cent. or more) and, in accordance with Rule 37.1 of the Takeover Code, the Significant Shareholders could be required to make a general offer for the entire issued share capital of the Company not already held by them.

The Independent Directors are therefore seeking the approval of the Independent Shareholders, via the Waiver Resolution, for a waiver to be granted by the Panel from the obligation that would otherwise apply to the Significant Shareholders upon the exercise of the Buyback Authority under Rule 9 of the Takeover Code. The Panel has agreed to grant this waiver, subject to the approval of the Waiver Resolution by the Independent Shareholders. The Waiver would not apply to the acquisition of any interests in the Voting Ordinary Shares other than as a result of the Buyback Authority, and would only apply for as long as the Buyback Authority remains in force.

Further, the Independent Directors would only use the Buyback Authority if it is, in their opinion, in the best economic interests of the Company to do so. The final decision relating to any buy back would be taken by the Independent Directors and would be conducted within the pricing and size parameters agreed by the Independent Directors but in compliance with the limits set out in the Buyback Authority.

Neither Murat Yazici nor Gulsun Nazli Karamehmet-Williams have taken part in the decision to recommend the Waiver Resolution. These matters have been dealt with by the Independent Directors. The Significant Shareholders and/or their nominees or representatives will not vote on the Waiver Resolution at the General Meeting.

Further details on the Waiver Resolution are set out below.

The Takeover Code and the Waiver Resolution

Under Rule 9 of the Takeover Code, any person who acquires an interest in shares (as defined in the Takeover Code) which, taken together with any interest in shares already held by that person or any interest in shares held or acquired by persons acting in concert with them, carry 30 per cent. or more of the voting rights of a company which is subject to the Takeover Code, is normally required to make a general offer to all the remaining shareholders to acquire their shares in the company. Such an offer would have to be made in cash and at the highest price paid for any interest in shares by that person or by any person acting in concert with it within the 12 months prior to the announcement of the offer. Under Rule 37.1 of the Takeover Code, when a company redeems or purchases its own voting shares, any resulting increase in the percentage of shares carrying voting rights in which a shareholder and any persons acting in concert with him are interested will normally be treated as an acquisition for the purpose of Rule 9 of the Takeover Code.

As noted above, the Significant Shareholders currently have an interest equal to the Maximum Voting Percentage of the Voting Ordinary Share capital of the Company.

If the Company were to resolve to buy back the maximum number of Voting Ordinary Shares possible pursuant to the Buyback Authority in the market other than from the Significant Shareholders, the Significant Shareholders would own 64,121,003 Voting Ordinary Shares, representing approximately 33.33 per cent. of the Company’s Voting Ordinary Share capital following the full use of the Buyback Authority, and the Significant Shareholders would therefore be subject to the provisions of Rule 9 of the Takeover Code.

Tables showing the holdings of the Significant Shareholders, both at the Disclosure Date and following an exercise in full of the Buyback Authority on the basis set out above, are set out at paragraphs 5.1 and 5.2 of Part II to this document.

In addition to their current holdings of Ordinary Shares, the Significant Shareholders each have an interest in 3,000,000 Founder Securities, which can be exchanged for Ordinary Shares upon certain performance conditions being satisfied. However, upon such exchange, the Significant Shareholders will only be issued with such number of Voting Ordinary Shares as is necessary to leave them with the Maximum Voting Percentage of Voting Ordinary Shares, with the balance of their entitlement being settled in Suspended Voting Ordinary Shares. For further details on the Founder Securities, see paragraph 9 of Part III.

Should the Independent Directors subsequently decide that it is appropriate in the future for the Company to use the Buyback Authority to purchase Voting Ordinary Shares, they would not be prepared to authorise any such purchase in circumstances which would lead to the Significant Shareholders becoming obliged to make a general offer for the Company. For this reason, the Independent Directors have decided to seek a waiver from the Panel from the obligation on the Significant Shareholders to make a general offer for the Company under Rule 9 of the Takeover Code that would result from an exercise of the Buyback Authority.

The Panel has agreed to waive the obligation to make a general offer that would otherwise arise as a result of increases in the shareholding of each Significant Shareholder following an exercise of the Buyback Authority, subject to the approval of the Independent Shareholders. Accordingly, the Waiver Resolution is being proposed at the General Meeting and will be taken on a poll. A representative of each Significant Shareholder may attend the General Meeting but none of the Significant Shareholders (nor any nominee or representative of them) will be entitled to vote on the Waiver Resolution.

If the Waiver Resolution is passed and the Panel grants the waiver, then, following a buyback of Voting Ordinary Shares by the Company on the basis set out above, the Significant Shareholders will be interested collectively in more than 30 per cent., up to a maximum of 33.33 per cent. if the maximum number of Voting Ordinary Shares that can be purchased under the Buyback Authority is purchased. Any further increase in the shareholding of the Significant Shareholders will be subject to the provisions of Rule 9 of the Takeover Code.

Management, employees and continuation of the business of the Company

The Directors intend to continue to conduct the business of the Company in the same manner as it is currently conducted and there are no plans to redeploy its fixed assets or to introduce any substantial changes in the business of the Group, the management of the Group, the continued employment of its employees or their terms of employment.

General Meeting – action by Shareholders

Set out at the end of this document is a notice convening the General Meeting to be held at The Dickens Room, Holborn Bars, 138-142 Holborn, London EC1N 2NQ on Wednesday, 5 September 2012 at 10.00 a.m. at which the Waiver Resolution will be proposed and on which a poll will be taken.

Shareholders will find enclosed with this document a Form of Proxy for use at the General Meeting. Whether or not Shareholders intend to be present at the meeting, Shareholders are requested to complete and return the Form of Proxy in accordance with the instructions printed thereon so that it arrives at the Company’s Registrars as soon as possible and in any event not later than 10.00 a.m. on Monday, 3 September 2012, being 48 hours before the start of the General Meeting. Completion and return of the Form of Proxy will not prevent Shareholders from attending and voting at the meeting should they so wish.

Further information

Your attention is drawn to the further information set out in Parts II and III of this document.

Recommendations

Waiver Resolution

The Independent Directors, who have been so advised by J.P. Morgan Cazenove, believe that obtaining the Rule 9 Waiver is fair and reasonable and in the best interests of the Independent Shareholders. In providing advice to the Independent Directors, J.P. Morgan Cazenove has taken into account the Independent Directors’ commercial assessments. The Independent Directors also believe that obtaining the Rule 9 Waiver is in the best interests of the Company as a whole.

Accordingly, the Independent Directors recommend that Independent Shareholders vote in favour of the Waiver Resolution to approve the Rule 9 Waiver as they intend to do in respect of their own shareholdings of 26,124,442 Voting Ordinary Shares, representing approximately 12.2 per cent. of the Voting Ordinary Share capital as at the Disclosure Date.

Yours faithfully

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Rodney Chase Chairman, Genel Energy plc For and on behalf of the Independent Directors

PART II

INFORMATION ON THE SIGNIFICANT SHAREHOLDERS

1. Information on Elysion

1.1 Elysion Energy Holding B.V., formerly known as Genel Energy Holdings B.V., is a private limited company incorporated under the laws of the Netherlands with registered number 2102152, and whose statutory seat is in Amsterdam, The Netherlands and its registered office at Prins Bernhardplein 200, 1097 JB Amsterdam, The Netherlands.
1.2 The directors of Elysion are as follows:

Intertrust (Netherlands) B.V.

Mextrust B.V

Murat Yazici

1.3 The only business interest of Elysion is the holding of shares in the Company.

2. Information on Focus

2.1 Focus Investments Limited is a private limited company incorporated in the Marshall Islands with registered number 33290 and whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH 96960.
2.2 The directors of Focus are as follows:

Mehmet Bülent Ergin

Ali Tuğrul Tokgöz

Mehmet Mat

2.3 The only business interest of Focus is the holding of shares in the Company.

3. Information on PRM

3.1 Petroleum Resources Management N.V. is a company incorporated in Curacao with registered number 107566 and whose registered office is at Zeelandia Office Park, Kaya W.F.G. (Jombi) Mensing 14, 2nd Floor, Wilemstad, Curacao.
3.2 The directors of PRM are as follows:

Intertrust Management (Curaçao) N.V.

Intertrust (Curaçao) B.V.

Murat Yazici

Anton Curtis

3.3 The only business interest of PRM is the holding of shares in the Company.

4. Relationships of Significant Shareholders with certain Directors

4.1 Murat Yazici has been nominated for appointment as a director of the Company by Elysion pursuant to the terms of the Relationship Agreement.

4.2 Murat Yazici owns 20.16 per cent. of PRM and is a director of PRM. Murat Yazici also owns 3.43 per cent. of Elysion and is a director of Elysion.
4.3 Ms Gulsun Nazli Karamehmet-Williams has been nominated for appointment as a director of the Company by Focus pursuant to the terms of the Relationship Agreement. Ms Karahmehmet-Williams is the daughter of Mehmet Emin Karamehmet, the ultimate beneficial owner of Focus.
4.4 There is no outstanding relationship between any of the Significant Shareholders and J.P. Morgan Cazenove as the independent adviser to the Company.

5. Information on the Significant Shareholder’s interests in the Company

5.1 The table below shows the respective interests of the Significant Shareholders of Ordinary Shares, Voting Ordinary Shares and Suspended Voting Ordinary Shares as at the Disclosure Date:

Suspended Voting Voting Ordinary Ordinary Ordinary Shares (%) Shares (%) Shares (%) Elysion 39,189,757 14.0 28,097,823[1] 13.1 11,091,934[2] 16.7 Focus 73,389,351 26.2 36,023,180 16.9 37,366,171[2] 56.2 PRM 18,053,414 6.4 – – 18,053,414[3] 27.1 Other Genel Energy shareholders (including the Founders) 149,615,676 53.4 149,615,676 70.0 – – –––––––––– –––––– –––––––––– –––––– –––––––––– –––––– Total 280,248,198 100.0 213,736,679 100.0 66,511,519 100.0 –––––––––– –––––– –––––––––– –––––– –––––––––– ––––––

Notes

664,993 Voting Ordinary Shares of which are deferred consideration shares pursuant to the terms of the Merger Agreement held by J.P. Morgan Chase Bank N.A. as escrow agent.
All of which are deferred consideration shares pursuant to the terms of the Merger Agreement held by J.P. Morgan Chase Bank N.A. as escrow agent.
3,610,683 Suspended Voting Ordinary Shares of which are deferred consideration shares pursuant to the terms of the Merger Agreement held by J.P. Morgan Chase Bank N.A. as escrow agent, and 1,805,341 Suspended Voting Shares of which are subject to a security interest in favour for the Company as security for PRM’s share of any claims under the Merger Agreement, pursuant to the Security Interest Agreement.
5.2 Set out below is the maximum individual and aggregate percentage of the Voting Ordinary Share capital and Ordinary Share capital which would be beneficially held by the Significant Shareholders assuming the Company buys back the maximum number of Voting Ordinary Shares possible pursuant to the Buyback Authority from Voting Ordinary Shareholders other than the Significant Shareholders:

Percentage of Voting Ordinary Percentage of Share capital Ordinary Share Number of after the Number of capital after Voting Ordinary maximum Ordinary the maximum Shares buy-back Shares buy-back Elysion Energy Holding BV 28,097,823[1 ] 14.6 39,189,757 15.1 Focus Investments Limited 36,023,180 18.7 73,389,351 28.3 Petroleum Resources Management NV – – 18,053,414 7.0 –––––––––– –––––––––– –––––––––– –––––––––– Total 64,121,003 33.3 130,632,522 50.4 –––––––––– –––––––––– –––––––––– ––––––––––

Notes

664,993 Voting Ordinary Shares of which are deferred consideration shares pursuant to the terms of the Merger Agreement held by J.P. Morgan Chase Bank N.A. as escrow agent.

5.3 The Significant Shareholders are deemed to be acting in concert under the Takeover Code.

6. Information on ultimate owners of certain Significant Shareholders

6.1 The following individual has a pre-existing interest in Elysion, such that he has a potential direct or indirect interest of 5 per cent. or more in any part of the capital of the Company which the Panel would regard as equity capital:

(i) Mehmet Sepil

Mehmet Sepil is the President of the Company, and indirectly owns 12.4 per cent. of the Voting Ordinary Shares, and 13.5 per cent. of the Ordinary Shares, through his ownership interests in Elysion (94.2 per cent.) and PRM (5.7 per cent.). Mr. Sepil was formerly the CEO of GEIL. He has over 29 years of construction engineering, financial and administrative management experience in construction and high tech companies, which includes advanced field operations, international contracting and business development experience within NATO, the US and Turkish government projects as well as private sector projects.
6.2 The following individual has a pre-existing interest in Focus, such that he has a potential direct or indirect interest of 5 per cent. or more in any part of the capital of the Company which the Panel would regard as equity capital:

(i) Mehmet Emin Karamehmet

Mehmet Emin Karamehmet indirectly owns 16.9 per cent. of the Voting Ordinary Shares, and 26.2 per cent. of the Ordinary Shares, through his 100 per cent. indirect ownership interest in Focus. Mr. Karamehmet is the Chairman of the Board of Directors of Cukurova Holding A.S. (a leading Turkish business conglomerate) as well as various Cukurova group companies, such as BMC Sanayi, Noksel, Baytur Insaat and Cukurova Kimya. Mr. Karamehmet also serves as a member of the board of directors at other Cukurova group companies, including Cukurova Jenerator, Turk Medya and Cimsatas.

7. Disclosure of interests and dealings in the relevant securities of the Significant Shareholders

7.1 Save as disclosed in paragraph 4 above, neither the Company nor any of its Directors, nor any person acting in concert with the Company or its Directors, held any interest in, right to subscribe for, or short position in any relevant securities of any of the Significant Shareholders.
7.2 For the purposes of this paragraph 7 of Part II, “relevant securities” means ordinary shares in Elysion, Focus or PRM (as the case may be) or any other securities of Elysion, Focus or PRM (as the case may be) convertible or exchangeable into rights to subscribe for, options (including traded options) in respect of, or derivatives referenced to, any such shares or short positions, (whether conditional or absolute and whether in the money or otherwise), including any short position under a derivative, any agreement to sell or any delivery obligation or right to require another person to purchase or take delivery, in each case in respect of ordinary shares in Elysion, Focus or PRM (as the case may be).

8. Material contracts

8.1 In connection with the merger between the Company and GEIL, the Significant Shareholders entered into various material contracts outside the ordinary course of business with, inter alios , the Company, further details of which are set out in paragraph 6 of Part III.
8.2 In May 2012, Focus entered into a security interest agreement with Credit Europe Bank N.V. (the “ Lending Bank ”), pursuant to which Focus granted a pledge over 7,800,000 of its Voting Ordinary Shares as security for a loan facility. Should the pledge ever become enforceable, the Lending Bank has agreed with the Company that before it exercises any power of sale that it may have over such Voting Ordinary Shares, it shall promptly (i) give the Company written notice of the intention to exercise such right and (ii) give the Company written notice of whether Elysion exercises or declines a right of first refusal granted to Elysion over such shares by the Lending Bank so as not to contradict the terms of the Merger Agreement (see paragraph 6.1 of Part III for further details).

8.3 Save as referred to above and in paragraph 6 to Part III, there have been no material contracts entered into by the Significant Shareholders or any of their respective subsidiaries (other than in the ordinary course of business) during the two years immediately preceding the date of this document.

9. Intentions of the Significant Shareholders regarding the Company’s business

9.1 Each of the Significant Shareholders has confirmed to the Company that it is not proposing, as a result of any increase in their percentage interest in Voting Ordinary Shares following an exercise of the Buyback Authority, to seek any change in the composition of the Board or to the general nature of any other aspect of the Company’s business.
9.2 As required by the Takeover Code, each of the Significant Shareholders has confirmed it intends to procure that the business of the Company is conducted in the same manner as it is currently conducted and that no Significant Shareholder has any plans to change the locations of the Company’s places of business, redeploy the Group’s fixed assets or to introduce any substantial changes in the business of the Group, the management, the continued employment of its employees or their terms of employment, and the trading facilities for any relevant securities of the Company.
9.3 Each Significant Shareholder, insofar as it is affected by the Company’s use of the Buyback Authority, has no intention to make any change to the continued employment of its respective employees (where relevant), the management of its respective subsidiaries, its strategic plans for its business and the locations of its business.

PART III

ADDITIONAL INFORMATION

1. Responsibility

1.1 Save for Murat Yazici and Gulsun Nazli Karamehmet-Williams in relation to the views of the Independent Directors as to the merits of the Waiver Resolution only, the Directors, whose names appear in paragraphs 2.1 and 2.2 of this Part III, accept responsibility for the information contained in this document, other than information relating to the Significant Shareholders, the directors of any Significant Shareholder and their immediate families, related trusts and companies and persons connected to them. Save as aforesaid, to the best of the knowledge and belief of the Directors (who have taken all reasonable care to ensure that such is the case) the information contained in this document is in accordance with the facts and does not omit anything likely to affect the import of such information.
1.2 The directors of Elysion, whose names are set out in paragraph 1.2 of Part II, accept responsibility for the information contained in this document relating to Elysion, the Elysion directors and their immediate families, related trusts and companies and persons connected to them. Save as aforesaid, to the best of the knowledge and belief of the directors of Elysion (who have taken all reasonable care to ensure that such is the case) the information contained in this document is in accordance with the facts and does not omit anything likely to affect the import of such information.
1.3 The directors of Focus, whose names are set out in paragraph 2.2 of Part II, accept responsibility for the information contained in this document relating to Focus, the Focus directors and their immediate families, related trusts and companies and persons connected to them. Save as aforesaid, to the best of the knowledge and belief of the directors of Focus (who have taken all reasonable care to ensure that such is the case) the information contained in this document is in accordance with the facts and does not omit anything likely to affect the import of such information.
1.4 The directors of PRM, whose names are set out in paragraph 3.2 of Part II, accept responsibility for the information contained in this document relating to PRM, the PRM directors and their immediate families, related trusts and companies and persons connected to them. Save as aforesaid, to the best of the knowledge and belief of the directors of PRM (who have taken all reasonable care to ensure that such is the case) the information contained in this document is in accordance with the facts and does not omit anything likely to affect the import of such information.

2. Directors of the Company

2.1 The names and functions of the Independent Directors are as follows:

Rodney Chase Chairman Tony Hayward Executive Director, Chief Executive Officer Julian Metherell Executive Director, Chief Financial Officer Jim Leng Senior Independent Non-Executive Director Sir Graham Hearne Independent Non-Executive Director Mehmet Öğütçü Independent Non-Executive Director Mark Parris Independent Non-Executive Director George Rose Independent Non-Executive Director Nathaniel Rothschild Non-Executive Director Chakib Sbiti Independent Non-Executive Director

2.2 Murat Yazici and Gulsun Nazli Karamehmet-Williams are Non-Executive Directors of the Company but, as they are the nominees of Elysion and Focus, respectively, they are not considered Independent Directors.

3. Nature of the Company’s business and registered office

3.1 The Company is the holding company for the Group. The Group operates as an oil and gas exploration and production business. Formed by the merger of Vallares PLC and GEIL, the Group is the largest independent oil producer in the Kurdistan Region of Iraq. Upon completion of the merger in November 2011, the Company was admitted to the Official List with a Standard Listing, and admitted to trading on the Main Market for Listed Securities of the London Stock Exchange plc.
3.2 The Company is a public limited company incorporated in Jersey. The Company’s registered office is at 12 Castle Street, St. Helier, Jersey JE2 3RT.

4. Disclosure of interests and dealings in relevant securities in the Company

4.1 As at the Disclosure Date, the total issued share capital of the Company was 280,248,198 Ordinary Shares, comprised of 213,736,679 Voting Ordinary Shares and 66,511,519 Suspended Voting Ordinary Shares.

Interests

4.2 (i) Details of the relevant securities of the Company in which the Significant Shareholders have an interest are set out in the table at paragraph 5 of Part II.
(ii) The Significant Shareholders have a right to subscribe for further Ordinary Shares in the Company should the Founder Securities be exchanged in accordance with their terms. For further details on the Founder Securities see paragraph 9 of Part III.
(iii) Save as otherwise described in this paragraph 4.2 of Part III, none of the Significant Shareholders, nor any of their respective directors, nor any person acting in concert with the Significant Shareholders or any of their respective directors, hold any interest in, right to subscribe for, or short position in any relevant securities of the Company.
4.3 As at the Disclosure Date, the interests, rights to subscribe and short positions in the relevant securities of the Company held by the Directors, their immediate families or related trusts and companies (excluding options and awards as set out in paragraph 4.4 below), and the percentage of the Company’s issued share capital which they represent as at that date and after the exercise on full of the Buyback Authority, are set out in the table below.

Percentage of Voting Percentage of Ordinary Number of Voting Share capital Voting Ordinary after the Ordinary Share maximum Director Shares capital buy-back Rodney Chase 240,000 0.1 0.1 Tony Hayward 1,737,052 0.8 0.09 Julian Metherell 1,737,052 0.8 0.09 Sir Graham Hearne 90,000 0.05 0.05 Jim Leng 100,000 0.05 0.05 Mark Parris 10,368 0.004 0.005 George Rose 90,000 0.05 0.05 Nathaniel Rothschild 22,119,970 10.3 11.5 Murat Yazici 964,598 0.5 0.5 ––––––––––– ––––––––––– ––––––––––– Total 27,089,040 12.7 14.1 ––––––––––– ––––––––––– –––––––––––

As at the Disclosure Date, Vallares Capital LP holds 20,354,074 of the Voting Ordinary Shares in which Tony Hayward, Julian Metherell and Nathaniel Rothschild are interested via its general partner and Vallares Capital GP Limited holds 240,000 of the Voting Ordinary Shares in which Tony Hayward

is interested. A further 5,000,000 shares in which Nathaniel Rothschild is interested are held outside Vallares Capital LP. This represents all of the Voting Ordinary Shares in which these individuals are interested.

4.4 As at the Disclosure Date, awards over 123,796 and 79,991 Voting Ordinary Shares had been granted to Tony Hayward and Julian Metherell, respectively. Both Tony Hayward and Julian Metherell were eligible for these awards, which take the form of nil-cost options, under the Performance Share Plan. However, the Voting Ordinary Shares under these awards will only be earned by those Executive Directors if certain performance conditions are met by the end and the individual remains in employment for the duration of the three year performance period (1 January 2012 – 31 December 2014). Any Voting Ordinary Shares that vest in accordance with the terms of the Performance Share Plan will be subject to a three year retention period. As Founders, Messrs Hayward and Metherell also hold Founder Securities, as does Nathaniel Rothschild (see paragraph 9 of this Part III below).
4.5 As at the Disclosure Date, J.P. Morgan Cazenove (including any person controlling, controlled by or under the same control as it, except in the capacity of an exempt fund manager or an exempt principal trader), held no interests, rights to subscribe or short positions in relevant securities.
4.6 As at the Disclosure Date, excluding the Directors, there were no interests, rights to subscribe or short positions in respect of relevant securities held by persons acting in concert with the Company.

Dealings

4.7 During the 12 months prior to the date of this document (the “ Disclosure Period ”), the following dealings in the relevant securities of the Company by the Significant Shareholders and the directors of the Significant Shareholders have taken place:

			No. of Price per
			Voting Voting
			Ordinary Ordinary
Date	Party	Transaction	Shares Share (p)
21 November	Elysion	Issued with Voting Ordinary	24,532,787 –
2011		Shares following Vallares/GEIL
		merger
	Focus	Issued with Voting Ordinary	31,452,579 –
		Shares following Vallares/GEIL
		merger
19 January 2012	Elysion	Conversion of Suspended	624,165 –
		Voting Ordinary Shares
	Focus	Conversion of Suspended	4,287,301 –
		Voting Ordinary Shares
	PRM	Conversion of Suspended	3,108,457 –
		Voting Ordinary Shares
2 April 2012	Elysion	Conversion of Suspended	3,001 –
		Voting Ordinary Shares
	Focus	Conversion of Suspended	20,619 –
		Voting Ordinary Shares
	PRM	Conversion of Suspended	14,952 –
		Voting Ordinary Shares
31 May 2012	Elysion	Acquisition of Voting Ordinary	2,272,877 –
		Shares from PRM
	Elysion	Acquisition of Voting Ordinary	631,1891–
		Shares from PRM

		No. of Price per
		Voting Voting
		Ordinary Ordinary
Date Party	Transaction	Shares Share (p)
Focus	Acquisition of Voting Ordinary	219,343 –
	Shares from PRM
PRM	Transfer of Voting Ordinary	2,272,877 –
	Shares to Elysion
PRM	Transfer of Voting Ordinary	631,1891 –
	Shares to Elysion
PRM	Transfer of Voting Ordinary	219,343 –
	Shares to Focus
22 June 2012 Elysion	Conversion of Suspended	33,804 –
	Voting Ordinary Shares
Focus	Conversion of Suspended	43,338 –
	Voting Ordinary Shares

Note

Transfer made through PRM transferring 631,189 Voting Ordinary Shares held by it to JPMorgan Chase Bank N.A. as Escrow Agent to be credited to the Elysion escrow securities account.
4.8 During the Disclosure Period, the following dealings in the relevant securities of the Company by the Directors, their immediate families and related trusts and companies have taken place:

			No. of Price per
			Voting Voting
			Ordinary Ordinary
Party	Date	Transaction	Shares Share (p)
Rodney Chase2	2 April 2012	Subscription for Matching Shares	30,000 10
	22 June 2012	Subscription for Matching Shares	60,000 10
Tony Hayward1	20 January	Issue of Voting Ordinary Shares	1,497,052 –
	2012	on conversion of Founder Shares
Sir Graham	2 April 2012	Subscription for Matching Shares	20,000 10
Hearne2
	22 June 2012	Subscription for Matching Shares	40,000 10
Jim Leng2	2 April 2012	Subscription for Matching Shares	20,000 10
	22 June 2012	Subscription for Matching Shares	40,000 10
Julian	20 January	Issue of Voting Ordinary Shares on	1,497,052 –
Metherell1	2012	conversion of Founder Shares
Mark Parris	28 June 2012	Purchase of Voting Ordinary Shares	10,368 615
Nathaniel	20 January	Issue of Voting Ordinary Shares	14,719,970 –
Rothschild1	2012	on conversion of Founder Shares
George Rose2	2 April 2012	Subscription for Matching Shares	20,000 10
	22 June 2012	Subscription for Matching Shares	40,000 10

Notes

Tony Hayward, Julian Metherell and Nathaniel Rothschild acquired additional interests in 1,497,052, 1,497,052 and 14,719,970 Voting Ordinary Shares respectively as a result of the exchange of Founder Shares for Ordinary Shares in Genel Energy plc on 20 January 2012. These Founder Shares were put in place to reward the Founders for their initial capital commitment to the Company and for the completion of a suitable acquisition through exchange of such Founder

Shares, within 6 months of completion of an acquisition, for 6.67 per cent. of the fully diluted Ordinary Shares of the Company. Alternatively, the Company had the option of purchasing the Founder Shares for an equivalent amount of cash. The investment by the Founders was risk capital and the Founders stood to suffer a loss of up to £20 million if a successful acquisition had not been executed. These Founder Shares have been treated as equity-settled share-based payments and are deemed to have vested immediately on the grant date as no performance conditions were attached to them. Following Completion of the Acquisition in November 2011, all of the Founder Shares were exchanged for Voting Ordinary Shares in Genel Energy plc on 20 January 2012.

Rodney Chase, Jim Leng, Sir Graham Hearne and George Rose were each entitled to subscribe for Voting Ordinary Shares under the share matching awards granted to each of them at the time of their original subscription in the Vallares IPO of June 2011 (“Matching Shares”). Each of these Directors has now subscribed for their awards of Matching Shares in full.
4.9 During the Disclosure Period, there were no dealings in the relevant securities of the Company by persons acting in concert with the Significant Shareholders.
4.10 (a) Neither the Company, nor any person acting in concert with the Company, has borrowed or lent any relevant securities in the Company.
(b) No relevant securities in the Company have been borrowed or lent by any of the Significant Shareholders, any director of the Significant Shareholders, or any of their respective concert parties.
4.11 For the purposes of this paragraph 4, “relevant securities” means Voting Ordinary Shares or any other securities convertible or exchangeable into rights to subscribe for, options (including traded options) in respect of, or derivatives referenced to, any such shares or short positions, (whether conditional or absolute and whether in the money or otherwise), including any short position under a derivative, any agreement to sell or any delivery obligation or right to require another person to purchase or take delivery in each case in respect of Voting Ordinary Shares.
4.12 For the purposes of this paragraph 4, and paragraph 7 of Part II:
(i) “acting in concert” has the meaning given to it in the Takeover Code;
(ii) “arrangement” includes indemnity or option arrangements, and any agreement or understanding, formal or informal, of whatever nature, relating to relevant securities which may be an inducement to deal or to refrain from dealing;
(iii) “dealing” or “dealt” includes:
- (A) acquiring or disposing of relevant securities, of the right (whether conditional or absolute) to exercise or direct the exercise of the voting rights attaching to relevant securities, or of general control of relevant securities;
- (B) taking, granting, acquiring, disposing of, entering into, closing out, terminating, exercising (by either party) or varying an option (including a traded option contract) in respect of any relevant securities;
- (C) subscribing or agreeing to subscribe for relevant securities;
- (D) exercising or converting, whether in respect of new or existing securities, any relevant securities carrying conversion or subscription rights;
- (E) acquiring, disposing of, entering into, closing out, exercising (by either party) any rights under, or varying, a derivative referenced, directly or indirectly, to relevant securities;
- (F) entering into, terminating or varying the terms of any agreement to purchase or sell relevant securities; and
- (G) any other action resulting, or which may result, in an increase or decrease in the number of relevant securities in which a person is interested or in respect of which he has a short position;

(iv) “derivative” includes any financial product the value of which, in whole or in part, is determined directly or indirectly by reference to the price of an underlying security;
(v) “a person has an interest” or is “interested” in relevant securities if he has long economic exposure, whether absolute or conditional, to changes in the price of those securities and in particular includes if a person:
(A) owns them;
(B) has the right (whether conditional or absolute), to exercise, or direct the exercise, of the voting rights attaching to relevant securities or has general control of them by virtue of any agreement to purchase, option or derivative;
(C) has the right or option to acquire relevant securities or call for their delivery or is under an obligation to take delivery of them, whether the right, option or obligation is conditional or absolute and whether it is in the money or otherwise; or
(D) is party to any derivative whose value is determined by reference to their price and, which results, or may result, in his having a long position in them; and
(vi) “short position” means any short position (whether conditional or absolute and whether in the money or otherwise) including any short position under a derivative, any agreement to sell or any delivery obligation or right to require another person to purchase or take delivery.

5. Directors’ service contracts and other interests

5.1 Tony Hayward (Chief Executive Officer) was appointed as a Non-Executive Director on 2 June 2011 and entered into a service agreement with the Company on 15 November 2011. Tony Hayward receives a base salary of £650,000 per annum under his service agreement with the Company. He is entitled to an amount equal to 25 per cent. of his annual base salary as a cash allowance in lieu of all benefits (such as pension, health and life insurance and company car allowance). He is eligible to participate in a discretionary annual short-term bonus scheme in which there will be the potential, subject to meeting performance conditions based on operational and personal objectives, to receive up to a maximum of 150 per cent. of his base annual salary (not including the cash supplement).
5.2 Julian Metherell (Chief Financial Officer) entered into a service agreement with the Company on 15 November 2011. Julian Metherell receives a base salary of £450,000 per annum under his service agreement with the Company. He is entitled to an amount equal to 25 per cent. of his annual salary as a cash allowance in lieu of all benefits (including pension, health and life insurance and company car allowance). He is eligible to participate in a discretionary annual short-term bonus scheme in which there will be the potential, subject to meeting performance conditions based on operational and personal objectives, to receive up to a maximum of 150 per cent. of his base annual salary (not including the cash supplement).
5.3 Both Tony Hayward and Julian Metherell are eligible to participate in the Company’s Performance Share Plan, the terms of which were approved by the Company’s shareholders at its AGM held on 22 May 2012. The following terms apply to their initial awards under the Performance Share Plan in 2012:
the awards granted to Tony Hayward and Julian Metherell are equal to 150 per cent. and 140 per cent. of their base salaries, respectively;
the vesting of the initial awards will be subject to performance testing based on a total shareholder return measure against a relevant comparator group;
the initial awards will be subject to a 3 year vesting period, starting retrospectively from 1 January 2012; and
vested shares will be subject to a further 3 year retention period.

5.4 Both Tony Hayward’s and Julian Metherell’s service agreements are terminable by either the relevant executive or the Company serving 12 months’ prior written notice. The Company may terminate their service contracts by the payment of a cash sum in lieu of notice equal to the basic salary and the cash allowance payable for any unexpired portion of the notice period capped at a sum equal to 12 months’ base salary and the annual benefit allowance. The Company has the discretion to make the payment in lieu of notice as a lump sum within 21 days of the termination date or in equal monthly instalments subject to deductions for mitigation (or such other payment profile as the Board determines).
5.5 No service contract with a Director has been entered into or amended within the six months prior to the date of this document.

6. Material contracts

Other than as described below, there have been no contracts entered into by the Company (other than contracts entered into in the ordinary course of business) during the two years immediately preceding the date of this document which are or may be material.

6.1 Merger Agreement

On 7 September 2011, the Company and the Significant Shareholders entered into the Merger Agreement pursuant to which Company agreed to purchase, and the Significant Shareholders agreed to sell, the entire issued ordinary share capital of GEIL in consideration for the issue of 130,632,522 Ordinary Shares (the “ Consideration Shares ”). The Merger Agreement was amended by a deed of amendment entered into on 29 October 2011.

Approximately 71.4 per cent. of the Consideration Shares, being 93,248,107 Ordinary Shares, were issued to the Significant Shareholders at completion of the acquisition (“ Completion ”). Of this, 1,805,341 of the Ordinary Shares issued to PRM on Completion (representing 1.4 per cent. of the Ordinary Shares issued as Consideration Shares) were made subject to a pledge in favour of the Company as security against any future claims against PRM pursuant to the Merger Agreement. The remaining 28.6 per cent. of the Consideration Shares, being 37,384,415 Ordinary Shares, were issued to the Escrow Agent at Completion as security against any future claims against the Significant Shareholders (“ Deferred Consideration Shares ”). As at the Disclosure Date, with the exception of 664,993 Deferred Consideration Shares in the name of Elysion which are Voting Ordinary Shares, all of the Deferred Consideration Shares are Suspended Voting Ordinary Shares.

Of the 30 per cent. of the Consideration Shares which were issued as deferred or pledged consideration, if no claims are made against the Significant Shareholders under the terms of the Merger Agreement, 25 per cent. will be released from escrow or the pledge (as the case may be) to the Significant Shareholders one year after Completion (21 November 2012), and the remaining five per cent. will be released from escrow or the pledge (as the case may be) to the Significant Shareholders five years after Completion (21 November 2016).

Due to the size of the interest the Significant Shareholders have in the Company following Completion, the Significant Shareholders agreed that part of the consideration they received under the Merger Agreement would be in the form of Suspended Voting Ordinary Shares in order to ensure that the Significant Shareholders’ aggregate holding of Voting Ordinary Shares will not exceed the Maximum Voting Percentage. The Suspended Voting Ordinary Shares automatically convert into Voting Ordinary Shares in the event of further equity issues by the Company, provided that following conversion the Significant Shareholders’ holding of Voting Ordinary Shares does not exceed the Maximum Voting Percentage.

Subject to certain exemptions, Focus has agreed under the terms of the Merger Agreement that for a period of 12 months following Completion it shall not dispose of any of the Ordinary Shares issued to it and Elysion and PRM have each agreed that they shall not dispose of any of the Ordinary Shares issued to them for a period of 24 months following Completion. These lock-up undertakings do not apply to:

an acceptance of a general offer for the Ordinary Share capital of the Company made in accordance with the Takeover Code or the provision of an irrevocable undertaking to accept such an offer, or a sale of Ordinary Shares to an offeror or potential offeror during an offer period (within the meaning of the Takeover Code);
a disposal of Ordinary Shares pursuant to a compromise or arrangement under Part 26 of the Companies Act 2006 (or any analogous provision) providing for the acquisition by any person (or group of persons acting in concert as such expression is defined in the Takeover Code) of 50 per cent. or more of the ordinary share capital of Company;
in the case of Focus only, a pledge being given over the Ordinary Shares owned by Focus to a financial institution as security against the borrowing of funds from such financial institution;
in the case of each of Elysion and PRM, a pledge being given over up to 5,878,464 and 2,708,032 of the Ordinary Shares held by each party respectively to a financial institution as security against that party borrowing funds from such financial institution;
a disposal of Ordinary Shares to fund any payment or part payment of (i) tax directly arising as a result of any of the documents relating to the Acquisition or (ii) a claim under the Merger Agreement;
a disposal required by law; and/or
a transfer to an affiliate.

Further, the lock-up undertakings set out above will not apply after the date that is one year after Completion to the disposal by:

Elysion of up to 11,079,611 Ordinary Shares (representing 30 per cent. of Mehmet Sepil’s indirect interest in the maximum number of Consideration Shares attributed to Elysion);
Elysion of up to 2,257,722 Ordinary Shares (representing the indirect interest of all Shareholders in Elysion (other than Mehmet Sepil) in the maximum number of Consideration Shares attributed to Elysion);
PRM of up to 306,986 Ordinary Shares (representing 30 per cent. of Mehmet Sepil’s indirect interest in the maximum number of Consideration Shares attributed to PRM); and/or
PRM of up to 17,030,128 Ordinary Shares (representing Citrus Energy International Limited, UB Group FZE and Murat Yazici’s indirect interest in the maximum number of Consideration Shares attributed to PRM).

Notwithstanding any other restriction or obligation under the Merger Agreement, PRM is permitted after Completion to distribute all Ordinary Shares owned by it to its shareholders in proportion to the shares in PRM held by such shareholders. Such distribution shall be subject to the relevant PRM shareholders agreeing to be bound by the terms of the Merger Agreement.

Additionally, under the terms of the Merger Agreement:

each of Elysion and Focus is entitled to a right of first refusal in relation to the transfer of Ordinary Shares held by the other or on the occurrence of certain trigger events which relate to a change in control in such other. If the right is not exercised, the Company is entitled, subject to certain conditions, to purchase, or procure purchasers for, such Ordinary Shares;
the Significant Shareholders have agreed that, subject to customary exceptions, neither they nor any of their connected persons shall for a period of two years after Completion carry on or be engaged or interested in any oil and gas exploration and production business in the Kurdistan Region; and

the Significant Shareholders have agreed that, subject to customary exemptions, neither they nor any of their connected persons shall for a period of two years after Completion offer to employ or seek to entice away from any member of the Group, or conclude any contract for services with, any person who was employed by the GEIL group or MKMS Enerji A.S. (formerly Genel Enerji AS, a service company to GEIL) at the date of the Merger Agreement.

6.2 Deed of Covenant

On 7 September 2011, the Company, Mehmet Emin Karamehmet, Mehmet Sepil and MKMS Energi A.S. entered into the Deed of Covenant. The Deed of Covenant was amended by a deed of amendment executed on 14 November 2011. Pursuant to the terms of the Deed of Covenant:

Mr. Mehmet Sepil represented to the Company that he is the controller of Elysion and PRM and agreed and undertook to the Company that for a period of 24 months following Completion he would continue to be a controller of Elysion and PRM, subject to certain exemptions;
Mr. Mehmet Emin Karamehmet represented to the Company that he is the controller of Focus and agreed and undertook to the Company that for a period of 12 months following Completion he would continue to be a controller of Focus;
each of Mr. Mehmet Sepil and Mr. Mehmet Emin Karamehmet have agreed that subject to customary exceptions, they shall not for a period of two years after Completion carry on or be engaged or interested in any oil and gas exploration and production business in the Kurdistan Region; and
each of Mr. Mehmet Sepil and Mr. Mehmet Emin Karamehmet have agreed that subject to customary exceptions, they shall not for a period of two years after Completion offer to employ or seek to entice away from any member of the Group, or conclude any contract for services with, any person who was employed by the GEIL group or MKMS Energi A.S. at the date of the Deed of Covenant.

6.3 Escrow Agreement

On 18 November 2011, Elysion, Focus, PRM, the Company and J.P. Morgan Chase Bank, N.A., London branch (the “ Escrow Agent ”) entered into the Escrow Agreement pursuant to which the Escrow Agent will hold the Deferred Consideration Shares allotted and issued to it at Completion in uncertificated form in escrow.

The Escrow Agent will hold the Deferred Consideration Shares (together with all dividends, interest, bonuses, bonus and other distributions and benefits which derive from the Deferred Consideration Shares, being the “ Escrow Cash ”) on behalf of Elysion, Focus and PRM in accordance with the terms of the Escrow Agreement.

The Escrow Agent will only transfer the Deferred Consideration Shares or Escrow Cash to such party as the Company and the representatives of each of Elysion, Focus and PRM instruct in accordance with the terms of the Escrow Agreement.

6.4 Security Interest Agreement

On 21 November 2011, PRM and the Company entered into the Security Interest Agreement pursuant to which PRM created a security interest in favour of the Company in the collateral as described therein, including 1,805,341 Suspended Voting Ordinary Shares, certificates for which were delivered to the Company, as security for PRM’s share of any claim under the Merger Agreement settled or determined in favour of the Company which is not satisfied by PRM in cash or pursuant to the Escrow Agreement.

6.5 Relationship Agreement

On 7 September 2011, the Company, Elysion and Focus entered into the Relationship Agreement which regulates the ongoing relationship between those parties.

The principal purpose of the Relationship Agreement is to ensure that the Company is capable at all times of carrying on its business independently of Elysion and Focus (and their respective associates) and that all transactions and relationships between the Company, Elysion and Focus are at arm’s length and on a normal commercial basis. For the purposes of the Relationship Agreement, the term “associate” includes, in the case of Elysion, PRM and Mehmet Sepil and, in the case of Focus, Mehmet Emin Karamehmet.

The Relationship Agreement will terminate upon the earlier of (i) the Company ceasing to have any of its Ordinary Shares listed on the Official List and admitted to trading on the London Stock Exchange’s main market for listed securities, and (ii) Elysion and Focus together with their respective associates ceasing between them to be entitled to exercise, or control the exercise of, in aggregate 10 per cent. or more of the voting rights in the Company.

Pursuant to the terms of the Relationship Agreement, it has been agreed that, among other things:

(a) for so long as Elysion and Focus and their respective associates are, between them, entitled to exercise or control the exercise of, in aggregate, 10 per cent. or more of the voting rights, each of Elysion and Focus will, and will procure so far as it is reasonably able to do so, that each of its associates will:
(i) conduct all transactions and relationships with any member of the Group, and ensure that all arrangements and agreements between either of them or any of their associates and the Company or any other member of the Group are entered into, on arm’s length terms and on a normal commercial basis;
(ii) not take any action which precludes or inhibits any member of the Group from carrying on its business independently of each of Elysion and Focus and their respective associates;
(iii) not exercise any of its voting rights to procure any amendment to the Articles of Association which would be inconsistent with or breach any provision of the Relationship Agreement;
(iv) if and for so long as paragraph 11.1.7R(3) of the Listing Rules applies to the Company, abstain from voting on any resolution required by paragraph 11.1.7R(3) of the Listing Rules to approve a “related party transaction” (as defined in paragraph 11.1.5R of the Listing Rules) involving Elysion or Focus or any of their associates as the related party;
(v) comply with all provisions of the Listing Rules, the Disclosure and Transparency Rules, the requirements of the London Stock Exchange and the Financial Services and Markets Act 2000 that apply to it in connection with the Company;
(vi) not cause or authorise to be done anything which would prejudice either the Company’s status as a listed company or its suitability for listing, or listing on the Premium Listing segment of the Official List; and
(vii) exercise all of its voting rights in a manner consistent with the intention that at all times at least half of the Directors (excluding the chairman) are independent non-executives and that certain committees of the Board shall comply with the UK Corporate Governance Code;
(b) provided that Focus and its associates are entitled to exercise or control the exercise of 10 per cent. or more of the Voting Rights, Focus shall be entitled to nominate for appointment to the Board one Director by giving notice to the Company;

(c) provided that Elysion and its associates are entitled to exercise or control the exercise of 10 per cent. or more of the Voting Rights, Elysion shall be entitled to nominate for appointment to the Board one Director by giving notice to the Company;
(d) for as long as Elysion and Focus and their respective associates are between them entitled to exercise or control the exercise of 10 per cent. or more of the voting rights, but provided neither Elysion nor Focus (in each case, together with its associates) is entitled to exercise or control the exercise of 10 per cent. or more of the voting rights, Elysion and Focus will, acting jointly, be entitled to nominate for appointment to the Board one Director by giving notice to the Company;
(e) provided that Elysion and its associates are between them entitled to exercise or to control the exercise of, in aggregate, 10 per cent. or more of the Voting Rights, Mehmet Sepil will have the title of President;
(f) for so long as:
(i) Elysion, Focus and their respective associates are between them entitled to exercise or to control the exercise of, in aggregate, 20 per cent. or more of the Voting Rights; and
(ii) the Voting Ordinary Shares are admitted to the Standard Listing segment of the Official List,

if the Group is proposing (with Board approval) to enter into any transaction for the acquisition or disposal of assets where the aggregate consideration to be paid or received by the Group in respect of such transaction would exceed US$1.5 billion (or its equivalent in any other currency at the prevailing exchange rates), unless Elysion and Focus otherwise give their prior written consent, the Board will convene a general meeting of shareholders in order to obtain prior approval for the proposed transaction from the Company’s shareholders and ensure that any agreement effecting the proposed transaction is conditional on that approval being obtained;

(g) for so long as Elysion or Focus together with their respective associates are between them entitled to exercise or to control the exercise of, in aggregate, 10 per cent. or more of the Voting Rights, subject to compliance by the Company with its legal and regulatory obligations, the Company shall procure that Elysion and Focus are provided with financial and other information as is necessary or reasonably required by them for the purposes of their accounting or financial control requirements or to comply with their legal or tax obligations as a shareholder of the Company;
(h) the rights described at (b)–(g) above will terminate and cease to be of any effect:
(i) in the case of Elysion, in the event that Elysion (or any affiliate (as defined in the Merger Agreement) of Elysion that holds any Ordinary Shares) ceases to be controlled by Mehmet Sepil; or
(ii) in the case of Focus, in the event that Focus (or any affiliate (as defined in the Merger Agreement) of Focus that holds any Ordinary Shares) ceases to be controlled by Mehmet Emin Karamehmet; and
(i) in addition, the rights of Elysion under the Relationship Agreement (subject to certain exceptions) shall terminate and cease to be of any effect in the event that Mehmet Sepil ceases to beneficially own (directly or indirectly through other entities controlled by Mehmet Sepil) Ordinary Shares carrying, in aggregate, 10 per cent. or more of the Voting Rights.

The Directors nominated by Elysion and Focus pursuant to the Relationship Agreement are Murat Yazici (Non-Executive Director) and Gulsun Nazli Karamehmet Williams (NonExecutive Director), respectively.

6.6 Bina Bawi agreements

On 14 May 2012, the Company entered into a sale and purchase agreement with Petoil Petroleum and Petroleum Products International Exploration and Production Inc. (“ Petoil ”) for the acquisition of a 23 per cent. stake in the Bina Bawi exploration licence in the Kurdistan Region of Iraq. The acquisition was made through the purchase for $175 million of the entire issued share capital of A&T Petroleum Company Ltd (“ A&T ”), who was the holder of the interest in the Bina Bawi licence. A&T is wholly owned by Petoil. Under the acquisition agreement, the Company gave and received customary representations and warranties for a transaction of this nature. The transaction was financed from Genel’s existing cash resources, and completed on 3 August 2012.

On 6 August 2012, the Company entered into an agreement with Hawler Energy, Ltd. (“ Hawler ”) to acquire an additional 21 per cent. interest (the “ Hawler Interest ”) in the Bina Bawi exploration licence. The acquisition of the Hawler Interest is for a consideration of $240 million to be funded by the Company’s existing cash resources and conditional on the receipt of approval from the Kurdistan Regional Government. Under this agreement, the Company gave and received customary representations and warranties for a transaction of this nature. Upon the completion of this acquisition of the Hawler Interest, the Company will hold in aggregate a 44 per cent. working interest in the Bina Bawi exploration field. Completion of this acquisition has not yet taken place.

7. Material change

As it was incorporated in April 2011, the Company has only published one set of audited consolidated accounts, for the year ending 31 December 2011, which are available on the Company’s website www.genelenergy.com and which are incorporated into this document by reference. Save as otherwise disclosed in this Part III, there has been no material change in the financial or trading position of the Company since 31 December 2011, being the last day of the financial period for which the Company’s most recent audited financial statements were prepared.

8. Middle-market quotations

Set out below are the closing middle-market quotations for a Voting Ordinary Share as derived from the Daily Official List for the first dealing day of each of the six months immediately preceding the date of this document and for the Disclosure Date.

Price per Date Ordinary Share (p) 1 February 2012 856.25 1 March 2012 800.00 2 April 2012 725.00 1 May 2012 708.75 1 June 2012 595.00 2 July 2012 610.00 1 August 2012 675.50 Disclosure Date 718.50

9. Founder Securities

In addition to the Founder Shares, prior to the Vallares IPO in June 2011, the Founders were also issued C shares in the Company’s subsidiary, Vallares Holding Company Limited (now Genel Energy Holding Company Limited), known as Founder Securities held through Vallares Capital LLP. These Founder Securities were put in place to reward the Founders for growing the Company following an acquisition (so as to maximise value for holders of Ordinary Shares) by entitling the Founders to a share of the upside in the Company’s value once certain performance conditions have been satisfied. The performance conditions are summarised below.

If within four years of completion of the acquisition of GEIL the closing price per Ordinary Share reaches, for the period of any 20 trading days out of 30 successive days, the higher of:

(i) a compound rate of return from completion of the acquisition of 8.50 per cent. on the share from the admission value of £10 and from date of the acquisition; or
(ii) an increase of 25 per cent. of the issue price from the admission value of £10, adjusted for any matters which have an impact on the capital structure of the Company,

the Founders have the right to exchange their Founder Securities for Ordinary Shares in the Company to a value of 15 per cent. of the increase in value from £10 per Ordinary Share. The Company has the option to settle by issuing shares or the equivalent in cash.

The Founder Securities were deemed to have vested immediately as no performance conditions exist in relation to their vesting. However, the performance conditions outlined above need to be met prior to the Founders being able to procure the exchange of the Founder Securities for Ordinary Shares.

The Interests of the Founders and the Significant Shareholders in the Founder Securities as at the Disclosure Date are set out below:

Number of Percentage of Founder Founder Director Securities Securities Tony Hayward 560,000 5.6 Julian Metherell 560,000 5.6 Nathaniel Rothschild 5,313,825 53.1 Significant Shareholders 3,000,000 30.0

Notes

If the market price of the Ordinary Shares exceeds £20 per share for 20 trading days out of any 30 successive days, the aggregate interests of the Significant Shareholders in the Founder Securities will be increased from 30 per cent. to 40 per cent. and the interests of the other persons interested in Founder Securities will be reduced accordingly. However, on exchange of the Founder Securities, the Significant Shareholders will only be issued with such number of Voting Ordinary Shares as necessary to leave them with the Maximum Voting Percentage of Voting Ordinary Shares, with the balance of their entitlement being settled in Suspended Voting Ordinary Shares.
The Founders have agreed not to offer, sell, contract to sell, pledge or otherwise dispose of any Ordinary Shares or Founder Securities held by them directly or indirectly, for a period of 365 days after the completion of the acquisition of GEIL. These restrictions are subject to exceptions for, among others, transfers to Vallares Capital LP, limited partners of Vallares Capital LP, any of the Founders, a family member or family trust of any such persons, or upon the enforcement of existing security over such securities.

10. General

10.1 J.P. Morgan Cazenove has given and not withdrawn its written consent to the issue of this document with the references to J.P. Morgan Cazenove in the form and context in which they appear.
10.2 No agreement, arrangement or understanding exists whereby the Voting Ordinary Shares acquired by the Company pursuant to the Buyback Authority to make market purchases will be transferred to any other person. All Voting Ordinary Shares repurchased by the Company will be cancelled or held in treasury upon repurchase.
10.3 No agreement, arrangement or understanding (including any compensation agreement) exists between the Company, any person acting in concert with Company and any of the Directors, recent directors, Shareholders or recent shareholders of the Company having any connection with or dependence upon the matters referred to in this document.
10.4 There are no external financing arrangements being sourced in connection with the proposals in this document. There are therefore no arrangements in place nor any required for the payment of interest on, repayment of or security for any liability (contingent or otherwise) as a result of the proposals in this document. All Voting Ordinary Shares acquired by the Company under the Buyback Authority will be funded from the Company’s existing cash resources.

11. Documents available for inspection

Copies of the following documents will be available for inspection on the Company’s website www.genelenergy.com, and at the offices of the Company’s solicitors, Linklaters LLP, One Silk Street, London EC2Y 8HQ during normal business hours on any weekday (Saturdays and public holidays excepted) up to and including 5 September 2012 and at the General Meeting to be held on that day:

11.1 the memorandum and articles of association of the Company;
11.2 the irrevocable undertakings of the Directors referred to in Part I;
11.3 the written consent referred to in paragraph 10.1 of this Part III;
11.4 the Annual Report and Accounts of the Company for the year ended 31 December 2011; and
11.5 this document, together with the notice of the General Meeting and the Form of Proxy.

PART IV

INFORMATION INCORPORATED BY REFERENCE

Your attention is drawn to the following documents (or parts thereof) that are incorporated by reference into this document:

		Page
		number(s)
		in such
Information incorporated by reference	Document reference	document
Annual Report and Accounts of
Genel Energy plc for the year ended
31 December 2011 (available for
viewing on the Company’s
website at www.genelenergy.com
under “Investor Relations”)	Consolidated statement of comprehensive income	85
	Consolidated balance sheet	86
	Consolidated statement of changes in equity	87
	Consolidated cash flow statement	88
	Notes to the consolidated financial statements	89-111
	Independent auditors’ report	84

Any Shareholder, person with information rights or other person to whom this document is sent may request a copy of each of the documents set out above in hard copy form. Hard copies will only be sent where valid requests are received from such persons. Requests for hard copies are to be submitted to the Company Secretary. All valid requests will be dealt with as soon as possible and hard copies mailed by no later than two business days following such request.

The documents incorporated by reference into this document have been incorporated in compliance with Rule 24.15 of the Code. Except as set forth above, no other portion of these documents is incorporated by reference into this document.

PART V

NOTICE OF GENERAL MEETING

Genel Energy plc

(Incorporated and Registered Jersey with number 107897)

Notice is hereby given that a General Meeting of Genel Energy plc (the “ Company ”) will be held at The Dickens Room, Holborn Bars, 138-142 Holborn, London EC1N 2NQ on Wednesday, 5 September 2012 at 10.00 a.m. for the purposes of considering and, if thought fit, to passing the following resolution as an ordinary resolution:

Ordinary Resolution

That the waiver by the Panel on Takeovers and Mergers of any obligation which might otherwise fall on Elysion Energy Holding B.V., Focus Investments Limited and Petroleum Resources Management N.V. or any person acting in concert with them or connected to them individually or collectively, to make a general offer pursuant to Rule 9 of the City Code on Takeovers and Mergers as a result of the increase in their shareholding pursuant to the purchase in the market by the Company of up to 10 per cent. of the Company’s Voting Ordinary Shares as at the date of the Company’s Annual General Meeting be and is hereby approved.

Dated 16 August 2012

Registered Office: BY ORDER OF THE BOARD 12 Castle Street Stephen Mitchell St. Helier Company Secretary Jersey JE2 3RT

Notes:

Voting at the General Meeting

(1) The ordinary resolution is subject to the approval of the Independent Shareholders (being the holders of Voting Ordinary Shares in the Company other than Elysion Energy Holding B.V., Focus Investments Limited and Petroleum Resources Management N.V. (the “Significant Shareholders”) and their respective interests). The Significant Shareholders will not be permitted to vote on the ordinary resolution.
(2) The right to attend and vote at the General Meeting is determined by reference to the Companys Register of Members. The Company, pursuant to Article 40 of the Companies (Uncertificated Securities) (Jersey) Order 1999, specifies that only those shareholders registered in the Register of Members of the Company as at 10.00 a.m. on Monday, 3 September 2012 (or, if the General Meeting is adjourned, in the Register of Members 48 hours before the time of any adjourned meeting) are entitled to attend and speak at the General Meeting and a member may vote in respect of the number of voting ordinary shares registered in such members name at that time. Changes to the entries in the Register of Members after that time shall be disregarded in determining the rights of any person to attend, speak and vote at the General Meeting. In the case of joint shareholders, the vote of the first named in the Register of Members of the Company who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the votes of other joint holders.

Proxies

(3) Holders of voting ordinary shares are entitled to appoint a proxy to exercise all or any of their rights to attend, speak and vote on their behalf at the General Meeting. A proxy need not be a shareholder of the Company. A proxy form which may be used to make such appointment and give proxy instructions accompanies this notice. If you are a holder of voting ordinary shares and do not have a proxy form and believe that you should have one, or if you require additional forms, please contact Capita Registrars (Jersey) Limited at The Registry, 34 Beckenham Road, Beckenham BR3 4TU or Telephone: 0871 664 0300 (Calls cost 10 pence per minute plus network extras). Lines are open Monday – Friday, 9.00 a.m. – 5.30 p.m. (from outside the UK: +44 (0) 20 8639 3399). In accordance with Article 53 of the Company’s Articles of Association, a holder of voting ordinary shares may appoint more than one proxy to attend on the same occasion, provided that each such proxy is appointed to exercise the rights attached to a different share or shares held by that member. Such a shareholder may only appoint a proxy or proxies by:
completing and returning the proxy form enclosed with this notice; or

if you are a user of the CREST system (including CREST Personal Members), having an appropriate CREST message transmitted.

IMPORTANT: In any case your instructions must be received by the Company’s Registrars no later than 10.00 a.m. on Monday, 3 September 2012.

To appoint a proxy or to give or amend an instruction to a previously appointed proxy via the CREST system, the CREST message must be received by the Companys agent (RA10) by 10.00 a.m. on Monday, 3 September 2012. For this purpose, the time of receipt will be taken to be the time (as determined by the time stamp applied to the message by the CREST Applications Host) from which the Company’s agent is able to retrieve the message. After this time any change of instructions to a proxy appointed through CREST should be communicated to the proxy by other means. CREST Personal Members or other CREST sponsored members, and those CREST Members who have appointed voting service provider(s) should contact their CREST sponsor or voting service provider(s) for assistance with appointing proxies via CREST.

For further information on CREST procedures, limitations and system timings, please refer to the CREST Manual. We may treat a proxy appointment sent by CREST as invalid in the circumstances set out in Article 34 of the Companies (Uncertificated Securities) (Jersey) Order 1999.

Further details of the appointment of proxies are given in the notes to the proxy form enclosed with this document.

Corporate representatives

(4) Under the Jersey Companies Law, a body corporate may only appoint one corporate representative. A holder of voting ordinary shares which is a body corporate that wishes to allocate its votes to more than one person should use the proxy arrangements.

Nominated Persons

(5) Any person to whom this notice is sent who is a person nominated pursuant to Article 128 of the Company’s Articles of Association to enjoy information rights (a “Nominated Person”) may, under an agreement between him/her and the shareholder by whom he/she was nominated, have a right to be appointed (or to have someone else appointed) as a proxy for the General Meeting. If a Nominated Person has no such proxy appointment right or does not wish to exercise it, he/she may, under any such agreement, have a right to give instructions to the shareholder as to the exercise of voting rights.
The statement of the rights of shareholders in relation to the appointment of proxies in paragraph 2 above does not apply to Nominated Persons. The rights described in that paragraph can only be exercised by shareholders of the Company.

Issued share capital and total voting rights

(6) As at 15 August 2012 (being the last practicable date prior to the publication of this Notice) the Company’s issued share capital consisted of 280,248,198 ordinary shares, made up of 213,736,679 voting ordinary shares at £0.10p each carrying one vote each and 66,511,519 suspended voting ordinary shares at £0.10p each carrying, subject to limited exceptions, no voting rights.

Members’ rights to ask questions

(7) Any Shareholder attending the General Meeting has the right to ask questions. The Company shall cause to be answered any such question relating to the business being dealt with at the General Meeting but no such answer need be given if:
to do so would interfere unduly with the preparation for the General Meeting or involve the disclosure of confidential information;
the answer has already been given on a website in the form of an answer to a question; or
it is undesirable in the interests of the Company or the good order of the General Meeting that the question be answered.

Electronic Communication

(8) You may not use any electronic address provided in either this notice or any related documents (including the proxy form) to communicate with the Company for any purpose other than those expressly stated.

Inspection of documents

(9) The following documents will be available for inspection during normal business hours on the Company’s website www.genelenergy.com and at the offices of the Company’s solicitors, Linklaters LLP, One Silk Street, London EC2Y 8HQ, from Thursday, 16 August 2012 until the time of the General Meeting and at The Dickens Room, Holborn Bars, 138-142 Holborn, London EC1N 2NQ from 15 minutes before the General Meeting until it ends:
the memorandum and articles of association of the Company;
the irrevocable undertakings of the Directors referred to in Part I of the circular accompanying this notice;
the written consent referred to in paragraph 10.1 of this Part III of the circular accompanying this notice;

the Annual Report and Accounts of the Company for the year ended 31 December 2011; and
the circular, this notice of General Meeting and the form of proxy

Voting results

(10) It is intended that voting on all resolutions will be conducted on a poll rather than on a show of hands. The Company believes that this is a more transparent method of voting as member votes are counted according to the number of shares held. Each Independent Shareholder will be entitled to one vote on a poll for each voting ordinary share held. The results of the poll will be announced via a Regulatory Information Service and also placed on the Company’s website at www.genelenergy.com following the General Meeting.

sterling 159280

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Genel Energy — Proxy Solicitation & Information Statement 2012

10826_rns_2012-08-16_449d3d75-1798-48b2-83e3-1815c9cae3c2.pdf

Genel Energy plc

Approval for Waiver of Obligations under Rule 9 of the City Code on Takeovers and Mergers

TABLE OF CONTENTS

PROPOSED TIMETABLE

DEFINITIONS

PART I

LETTER FROM THE INDEPENDENT DIRECTORS

Genel Energy plc

Approval for Waiver of Obligations under Rule 9 of the City Code on Takeovers and Mergers

Introduction and Background

The Takeover Code and the Waiver Resolution

Management, employees and continuation of the business of the Company

General Meeting – action by Shareholders

Further information

Recommendations

Waiver Resolution

PART II

INFORMATION ON THE SIGNIFICANT SHAREHOLDERS

1. Information on Elysion

3. Information on PRM

4. Relationships of Significant Shareholders with certain Directors

5. Information on the Significant Shareholder’s interests in the Company

Notes

Notes

6. Information on ultimate owners of certain Significant Shareholders

(i) Mehmet Sepil

(i) Mehmet Emin Karamehmet

8. Material contracts

9. Intentions of the Significant Shareholders regarding the Company’s business

PART III

ADDITIONAL INFORMATION

1. Responsibility

2. Directors of the Company

3. Nature of the Company’s business and registered office

4. Disclosure of interests and dealings in relevant securities in the Company

Interests

Dealings

Note

Notes

5. Directors’ service contracts and other interests

6. Material contracts

6.1 Merger Agreement

6.2 Deed of Covenant

6.3 Escrow Agreement

6.4 Security Interest Agreement

6.5 Relationship Agreement

6.6 Bina Bawi agreements

7. Material change

8. Middle-market quotations

9. Founder Securities

Notes

10. General

11. Documents available for inspection

PART IV

INFORMATION INCORPORATED BY REFERENCE

PART V

NOTICE OF GENERAL MEETING

Genel Energy plc

Ordinary Resolution

Notes:

Voting at the General Meeting

Proxies

IMPORTANT: In any case your instructions must be received by the Company’s Registrars no later than 10.00 a.m. on Monday, 3 September 2012.

Corporate representatives

Nominated Persons

Issued share capital and total voting rights

Members’ rights to ask questions

Electronic Communication

Inspection of documents

Voting results

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Genel Energy Proxy Solicitation & Information Statement 2012