MIE Holdings Corporation

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in doubt as to any aspect of this circular or as to the action to be taken, you should consult your stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountants or other professional adviser.

If you have sold or transferred all your shares in MIE Holdings Corporation, you should at once hand this circular with the accompanying form of proxy to the purchaser or the transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or the transferee.

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.

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MIE HOLDINGS CORPORATION MI 能源控股有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1555)

(1) MAJOR TRANSACTION DISPOSAL OF 60% EQUITY INTEREST IN PALAEONTOL B.V. AND

(2) NOTICE OF THE EXTRAORDINARY GENERAL MEETING

A letter from the Board is set out on pages 9 to 26 of this circular.

A notice convening the extraordinary general meeting (the ‘‘EGM’’) of MIE Holdings Corporation to be held at Room 3, United Conference Centre, 10/F, United Centre, 95 Queensway, Admiralty, Hong Kong on Monday, June 20, 2016 immediately after the conclusion or adjournment of the annual general meeting of the Company for the year 2016 is set out on pages EGM-1 to EGM-2 of this circular. A form of proxy for use at the EGM is also enclosed. Such form of proxy is also published on the websites of Hong Kong Exchanges and Clearing Limited (http://www.hkexnews.hk) and the Company (http:// www.mienergy.com).

Whether or not you are able to attend and vote at the EGM, please complete and sign the enclosed form of proxy in accordance with the instructions printed thereon and return it to the Company’s branch share registrar in Hong Kong, Tricor Investor Services Limited, at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong as soon as possible but in any event not less than 48 hours before the time appointed for the holding of the EGM or any adjournment thereof. Completion and return of the form of proxy as instructed will not preclude shareholders from attending and voting in person at the EGM if they so wish.

May 26, 2016

			Page
Definitions	. . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from	the	Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9
Appendix I		— Competent Person’s Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	I-1
Appendix II		— Financial Information of the Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	II-1
Appendix III		— General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	III-1
Notice of EGM		. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	EGM-1

– i –

DEFINITIONS

In this circular, unless the context otherwise requires, the following expressions shall have the following meanings:

‘‘Affiliate’’

in relation to any person, any other person directly or indirectly Controlled by, or Controlling of, or under common Control with, that person and, in the case of a trust, any trustee or beneficiary (actual or potential) of that trust. Reach Energy shall be deemed to be an Affiliate of the Purchaser

‘‘Aral Loan’’

the following loans provided by Emir-Oil to Aral Petroleum Capital LLP (which being a debtor of the Disposal Group and an Independent Third Party):

(a) the loan dated April 21, 2015 for a principal amount of Kazakhstan Tenge 148,000,000;
(b) the loan dated July 22, 2015 for a principal amount of Kazakhstan Tenge 42,000,000;
(c) the loan dated July 23, 2015 for a principal amount of Kazakhstan Tenge 14,000,000; and
(d) the loan dated August 13, 2015 for a principal amount of Kazakhstan Tenge 37,000,000
‘‘Bank Guarantee’’

the on demand bank guarantee to be provided by the Purchaser to the Company by Hong Leong Islamic Bank Berhad, Malaysia in the form agreed by the Company and the Purchaser for the amount of US$1,500,000

‘‘Board’’
the board of Directors
‘‘Break Fee’’

a fixed amount of US$1,500,000 only as liquidated damages being a genuine pre-estimate of the other Party’s expenses and costs arising from or in connection with the Sale and Purchase Agreement or the Transaction payable no later than seven (7) days after the date of the termination notice pursuant to the Sale and Purchase Agreement

‘‘Business Day’’

a day (other than a Saturday or Sunday) on which banks are open for general business in Beijing (the People’s Republic of China), Hong Kong (the People’s Republic of China), Astana (the Republic of Kazakhstan), Kuala Lumpur (Malaysia), Amsterdam (Netherlands) and the Cayman Islands

– 1 –

DEFINITIONS

‘‘Company’’
‘‘Competent Body’’
‘‘Competent Person’’
‘‘Competent Person’s Report’’
‘‘Completion’’
‘‘Completion Date’’
‘‘connected person(s)’’
‘‘Contracts’’
MIE Holdings Corporation (stock code: 1555), a company incorporated in the Cayman Islands with limited liability, the Shares of which are listed on the Main Board of the Stock Exchange
the Ministry of Energy of the Republic of Kazakhstan carrying out on behalf of the Republic of Kazakhstan the rights, connected to execution and implementation of the subsoil use contracts in the oil and gas sphere, with the competencies for the oil and gas and petrochemicals industries, and transportation of raw hydrocarbons, or its legal successor
Chapman Petroleum Engineering Ltd., being the person who prepared the Competent Person’s Report
the competent person’s report set out in Appendix I to this circular, issued by the Competent Person, in accordance with the requirements of the Listing Rules
completion of the sale and purchase of the Sale Shares and the transfer and assignment of the Relevant Percentage of the Shareholder Loans in accordance with Sale and Purchase Agreement
as defined in item 2.6 of the paragraph headed ‘‘2. The Sale and Purchase Agreement’’ of the Letter from the Board of this Circular
has the meaning ascribed to it under the Listing Rules
collectively:
(a) the Hydrocarbon Production Contract for the Aksaz field within blocks XXXV-10-C (partially), XXXV-11A (partially), D (partially) of the Munailinsky District of the Mangystau Oblast between the Republic of Kazakhstan and Emir-Oil (Registration Number 3737UVS dated September 9, 2011) (‘‘Aksaz Production Contract’’);
(b) the Hydrocarbon Production Contract for Dolinnoe field within blocks XXXV-11-A (partially), D (partially) of the Munailinsky District of the Mangystau Oblast between the Republic of Kazakhstan and Emir-Oil (Registration Number 3735UVS dated September 9, 2011) ( ‘‘ Dolinnoe Production Contract’’);

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DEFINITIONS

(c) the Hydrocarbon Extraction Contract for the Emir Field XXXV-11-A (partially) blocks of Emir Field of Munailinsky District of the Mangystau Oblast between the Republic of Kazakhstan and Emir-Oil (Registration Number 3890-UVS dated March 1, 2013) (‘‘Emir Production Contract’’);
(d) the Hydrocarbon Production Contract for Kariman field within blocks XXXV-11-D (partially), E (partially) of the Munailinsky District of the Mangystau Oblast between the Republic of Kazakhstan and Emir-Oil (Registration Number 3736UVS dated September 9, 2011) ( ‘‘ Kariman Production Contract’’); and
(e) the Contract on Exploration for Hydrocarbon Raw Materials on the Site of ‘‘Aksaz-Dolinnoe-Emir’’ located in the Tyubkaragan District of the Mangystau Oblast between the Republic of Kazakhstan and EmirOil (Registration Number 482 dated June 9, 2000), and the amendments thereof (‘‘Aksaz-Dolinnoe-Emir Exploration Contract’’)

‘‘Control’’ the power of a person to secure, directly or indirectly, (whether by the holding of shares, possession of voting rights or by virtue of any other power conferred by the articles of association, constitution, partnership deed or other documents regulating another person or otherwise) that the affairs of such other person are conducted in accordance with his or its wishes and ‘‘Controlled‘‘and ‘‘Controlling‘‘shall be construed accordingly

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DEFINITIONS

‘‘Deferred Consideration’’

the amount equal to:

(a) 15% of the Adjusted Transaction Consideration; and
(b) interest on the amounts set out in paragraph (a) above in accordance with the following interest schedule: (i) if payment is made within twelve (12) months of the Completion Date, no interest is payable; (ii) if payment is made twelve (12) months after the Completion Date but before twenty-four (24) months after the Completion Date, the rate of ten per cent. (10%) per annum from the period of twelve (12) months after the Completion Date until the payment date; and (iii) if payment is made twenty-four (24) months after the Completion Date, the rate of ten per cent. (10%) per annum for the period of twelve (12) months after the Completion Date until twenty-four (24) months after the Completion Date, then the rate of fourteen per cent. (14%) per annum from the period of twenty-four (24) months after the Completion Date until the payment date
‘‘Director(s)’’
‘‘Disposal’’
‘‘Disposal Company’’
‘‘Disposal Group’’
‘‘Dissenting Shareholders Payback Amount’’
‘‘Effective Date’’
the director(s) of the Company
the proposed disposal of the Sale Shares in the Disposal Company by the Seller to Reach Energy (being the SPV nominated by the Purchaser) and the assignment and transfer of the Shareholder Loan in proportion of the Relevant Percentage by the Company to Reach Energy (being the SPV nominated by the Purchaser) as contemplated under the Sale and Purchase Agreement
Palaeontol B.V., a company incorporated in the Netherlands
Disposal Company and Emir-Oil
the amount from the Trust Account which will be required to be paid out to holders of voting securities of the Purchaser who vote against the resolution approving the Transaction at the general meeting of the Purchaser and have requested that the Purchaser repurchase their voting securities
September 30, 2015

– 4 –

DEFINITIONS

‘‘EGM’’
‘‘Emir-Oil’’
‘‘Group’’
‘‘Hong Kong’’
‘‘IFRS’’
‘‘Independent Third Party(ies)’’
‘‘Latest Practicable Date’’
‘‘Listing Rules’’
‘‘Longstop Date’’
‘‘Net Contribution Amount’’

the extraordinary general meeting of the Company to be held at Room 3, United Conference Centre, 10/F, United Centre, 95 Queen’s Road, Admiralty, Hong Kong on Monday, June 20, 2016 immediately after the conclusion or adjournment of the annual general meeting of the Company for the year 2016 to consider, and if thought fit, approve, among other things, the Disposal, the notice of which is set out on pages EGM-1 to EGM-2 of this circular

Emir-Oil LLP, a company incorporated in the Republic of Kazakhstan
the Company and its subsidiaries
the Hong Kong Special Administrative Region of the People’s Republic of China
the International Financial Reporting Standards
party(ies) who is/are independent and not connected with the Company and its connected persons
May 23, 2016, being the latest practicable date for ascertaining certain information in this circular
the Rules Governing the Listing of Securities on the Stock Exchange
September 5, 2016, being six (6) months from the date of the Sale and Purchase Agreement, or such later date as the Parties to the Sale and Purchase Agreement may agree

the amount equal to the Relevant Percentage of:

(a) (positive) the aggregate of all payments made by the Company (or its Affiliates, but excluding the Disposal Group) to the Disposal Group for the purpose of funding the Disposal Group’s capital expenditures and operational expenditures, all payments made by the Company (or its Affiliates, but excluding the Disposal Group) to any third persons on behalf of, or for the benefit of, the Disposal Group within the Disposal Group’s ordinary course of business, and all payments made by the Company (or its Affiliates, but excluding the Disposal Group) to any third persons for the purpose of settling liabilities on behalf of, or for the benefit, of the Disposal Group. This shall exclude the settlement amount to ACAP Limited (which being a creditor of the Disposal Group and an Independent Third Party) (whether in shares of the Company or in cash), plus

– 5 –

DEFINITIONS

(b) (positive) interest on the amounts in paragraph (a) above from the date of payment until the Completion Date at the interest rate set out in the Shareholder Loan agreements, less
(c) (negative) the aggregate of all payments outside the ordinary course of business made by the Disposal Group to the Company (or its Affiliates, but excluding the Disposal Group), including any and all distributions, dividends, repayment of shareholder loans or other payments declared, made or paid in respect of any of the issued shares of the Company and for the avoidance of doubt, payments made by the Disposal Group related to the settlement of the payables to ACAP Limited are deemed outside the ordinary course of business;

in each case, after the Effective Date and on or prior to the Completion Date

‘‘Net Working Capital’’ the amount equal to the Relevant Percentage of the sum of the following items as on the Effective Date:

(a) Inventories (+)
(b) Trade receivables (+)
(c) Current portion of prepayment and other receivables (+)
(d) Trade payables (-)
(e) Current portion of accruals and other payables (-)
(f) Cash and cash equivalents (+)

Receivables related to the Aral Loan and payables to ACAP Limited are excluded from the Net Working Capital

‘‘Party’’ or ‘‘Parties’’ a party or the parties to the Sale and Purchase Agreement
‘‘Purchaser’’ Reach Energy Berhad, a company organised and existing under the laws of Malaysia
‘‘Purchaser Cash Position’’ the cash and cash equivalent in the accounts of the Purchaser as set out in the then most recent quarterly balance sheet as announced by the Purchaser

– 6 –

DEFINITIONS

‘‘Reach Energy’’

Reach Energy Ventures Sdn. Bhd., a company incorporated in Malaysia with limited liability

‘‘Relevant Percentage’’

sixty per cent (60%)

‘‘Relevant Ratios’’

the five ratios set out in Rule 14.07 of the Listing Rules (where applicable)

‘‘Remaining Completion Amount’’
(a) an amount equal to (i) 85% of the Adjusted Transaction Consideration; less (ii) the Completion Payment; and
(b) interest on the amount set out in paragraph (a) above in accordance with the following interest schedule: (i) if payment is made within six (6) months of the Completion Date, no interest is payable; (ii) if payment is made six (6) months after the Completion Date but before eighteen (18) months after the Completion Date, the rate of ten per cent. (10%) per annum from the period of six (6) months after the Completion Date until the payment date; and (iii) if payment is made eighteen (18) months after the Completion Date, the rate of ten per cent. (10%) per annum for the period of six (6) months after the Completion Date until eighteen (18) months after the Completion Date, then the rate of fourteen per cent. (14%) per annum from the period of eighteen (18) months after the Completion Date until the payment date

‘‘RM’’

Ringgit Malaysia, the lawful currency of Malaysia

‘‘Sale and Purchase Agreement’’ the conditional sale and purchase agreement dated March 5, 2016 entered into between the Parties in relation to the Disposal
‘‘Sale Shares’’ 10,800 ordinary shares constituting sixty per cent (60%) of the equity interest in the issued and paid-up capital in the Disposal Company
‘‘Seller’’ Palaeontol Cooperatief U.A., a company organised and existing under the laws of the Netherlands
‘‘SFO’’ the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)
‘‘Share(s)’’ ordinary share(s) of US$0.001 each in the capital of the Company

– 7 –

DEFINITIONS

‘‘Shareholder(s)’’ holder(s) of the Shares
‘‘Shareholder Loans’’
outstanding loans from the Company as lender to the Disposal Company as borrower comprising of principal loan amounts and accrued interest as at the Completion Date
‘‘Shareholders’ Agreement’’ the shareholders’ agreement, in agreed terms, signed between the Parties, Reach Energy and the Disposal Company
‘‘SPV’’ the special purpose vehicle incorporated by the Purchaser to receive the transfer of the Sale Shares and Relevant Percentage of the Shareholder Loan
‘‘Stock Exchange’’ The Stock Exchange of Hong Kong Limited
‘‘Transaction’’
the transactions contemplated by the Sale and Purchase Agreement and any matters arising out thereof
‘‘Trust Account’’
the trust account maintained by the custodian, Amanah Raya Trustees Berhad to hold and deal with part of the trust proceeds raised from the initial public offering of the Purchaser (being 94.75% of the gross proceeds raised by the Purchaser pursuant to its initial public offering, including and accrued interest to date) on behalf of the Company
‘‘US$’’ United State dollars, the lawful currency of the United States of America
‘‘%’’ per cent.

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LETTER FROM THE BOARD

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MIE HOLDINGS CORPORATION MI 能源控股有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1555)

Executive Directors: Mr. Zhang Ruilin (Chairman) Mr. Zhao Jiangwei Mr. Andrew Sherwood Harper Mr. Tao Tak Yin Dexter Mr. Tian Hongtao

Non-executive Director:

Ms. Xie Na

Independent Non-executive Directors:

Mr. Mei Jianping Mr. Jeffrey W. Miller Mr. Guo Yanjun

Registered office: P.O. Box 309 Ugland House Grand Cayman KY1-1104 Cayman Islands

Principal Place of Business in Hong Kong: Level 54, Hopewell Centre 183 Queen’s Road East Hong Kong

Beijing Office: Suite 1501, Block C, Grand Place 5 Hui Zhong Road Chaoyang District Beijing 100101 The People’s Republic of China

May 26, 2016

To the Shareholders

Dear Sir/Madam,

(1) MAJOR TRANSACTION DISPOSAL OF 60% EQUITY INTEREST IN PALAEONTOL B.V. AND

(2) NOTICE OF THE EXTRAORDINARY GENERAL MEETING

1. INTRODUCTION

Reference is made to the announcement of the Company dated March 7, 2016 regarding the signing of, among other things, the Sale and Purchase Agreement by the Company, the Seller and the Purchaser in relation to the disposal of the Sale Shares in the Disposal Company

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LETTER FROM THE BOARD

by the Seller to the Purchaser (or the SPV as the Purchaser may direct) and the assignment and transfer of the Shareholder Loans in proportion to the Relevant Percentage by the Company to the Purchaser (or the SPV as the Purchaser may direct).

The purpose of this circular is to provide you with, among other things, (i) further details in relation to the Sale and Purchase Agreement and the transactions contemplated thereunder; (ii) the Competent Person’s Report; (iii) other information as required under the Listing Rules, and (iv) the notice convening the EGM.

2. THE SALE AND PURCHASE AGREEMENT

The principal terms of the Sale and Purchase Agreement are as follows:

2.1 Date

March 5, 2016

2.2 Parties

(1) the Company;
(2) Palaeontol Cooperatief U.A., an indirectly wholly-owned subsidiary of the Company, as the Seller; and
(3) Reach Energy Berhad, as the Purchaser. The Purchaser shall be entitled to designate the SPV to receive the transfer of the Sale Shares and the Relevant Percentage of the Shareholder Loan.

The Purchaser has nominated Reach Energy as the SPV to receive the transfer of the Sale Shares and Relevant Percentage of the Shareholder Loan.

To the best of Directors’ knowledge, information and belief, having made all reasonable enquiries, the Purchaser, Reach Energy and their respective ultimate beneficial owners are Independent Third Parties.

2.3 Subject matter of the Disposal

Pursuant to the Sale and Purchase Agreement, the Seller agreed to sell the Sale Shares to Reach Energy (being the SPV nominated by the Purchaser) free from all Encumbrances and together with all rights, title and benefits attaching thereto including without limitation, all bonuses, rights, dividends and other distributions declared, paid or made in respect of the Sale Shares on or after the Completion Date.

At Completion, the Company shall assign and Reach Energy (being the SPV nominated by the Purchaser) shall accept the assignment and transfer of the Shareholder Loans in proportion to the Relevant Percentage simultaneously with the sale and transfer of the Sale Shares from the Seller to Reach Energy.

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LETTER FROM THE BOARD

The Sale Shares represent sixty per cent (60%) of the issued share capital of the Disposal Company.

2.4 Consideration and basis of determination

(a) The Parties have agreed that the enterprise value of one hundred per cent. (100%) (before adjustment of the Net Working Capital) of the Disposal Group is US$308,000,000 as at the Effective Date (‘‘Enterprise Value’’) which translates to US$184,800,000 based on the Relevant Percentage of the Enterprise Value.
(b) Subject to the adjustment mechanism described below, the aggregate consideration for the Sale Shares and the assignment of the Shareholder Loans in proportion to the Relevant Percentage less the deficiency of the Net Working Capital of US$29,911,000 (based on unaudited consolidated management accounts of the Disposal Group as at the Effective Date) is US$154,889,000 (‘‘Transaction Consideration’’), which represents a deficit of approximately 35% to the net book value of the Sale Shares and the Shareholder Loans in proportion to the Relevant Percentage as at the Effective Date.
(c) At Completion, the Transaction Consideration shall be adjusted as follows:

either

(i) increased by an amount equal to the Net Contribution Amount which shall not exceed an aggregate amount of US$21,000,000, if such amount is positive; or
(ii) decreased by an amount equal to the Net Contribution Amount if such amount is negative; and

increased by the Relevant Percentage any amounts recovered from Aral Petroleum Capital LLP prior to the Completion Date in connection with the Aral Loan (the ‘‘Adjusted Transaction Consideration’’), provided always that the Adjusted Transaction Consideration shall not be greater than US$175,889,000 (unless otherwise agreed by the Company and Purchaser in the case of exceptional or extra items of expenditure for the Disposal Company).

(d) The Adjusted Transaction Consideration shall comprise of:
(i) the purchase price of US$1.00 in respect of the sale and purchase of the Sale Shares (‘‘Purchase Price’’); and
(ii) the shareholders loan consideration shall be the Adjusted Transaction Consideration less the Purchase Price ( ‘‘ Shareholder Loan Consideration’’), in respect of the assignment and transfer of the Shareholder Loans in proportion to the Relevant Percentage.

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LETTER FROM THE BOARD

(e) At Completion, eighty five per cent. (85%) of the Adjusted Transaction Consideration shall be payable on the Completion Date and the Deferred Consideration shall be paid to the Company as follows:
(i) within twenty-four (24) months after the Completion Date; and
(ii) if the Deferred Consideration is not paid, on the date which is twenty-four (24) months after the Completion Date and until full payment of the Deferred Consideration:
- (A) the Company, the Purchaser and their respective Affiliates shall ensure that the Disposal Group defers any discretionary capital expenditure (‘‘CAPEX’’) (except for CAPEX required for the committed work obligations under the Contracts) such that the Disposal Group shall be able to free its cash flow for the purposes of cash distribution (either by way of dividends, repayment of shareholders loan or other means) to its shareholders;
- (B) any cash distributions by the Disposal Group to the Purchaser (or its Affiliates) shall first be used to ensure that the Purchaser Cash Position is not less than US$10,000,000 and thereafter the remaining cash distribution shall be used for repayment of the Deferred Consideration; and
- (C) the Purchaser shall use its best efforts to raise the maximum amount of funds (whether that be by way of debt or equity fund raising) for repayment of the Deferred Consideration provided that (1) if the net proceeds raised is less than US$1,000,000 then such amount shall not be used for repayment of the Deferred Consideration; and (2) the net proceeds raised shall first be used to ensure that the Purchaser Cash Position is no less than US$10,000,000 and thereafter the remaining net proceeds raised (over and above the Purchaser Cash Position of US$10,000,000) shall be used for repayment of the Deferred Consideration.
(f) Within five (5) days of satisfaction of the Conditions to be observed on the part of the Purchaser, the Purchaser has a right to defer payment of part of the 85% of the Adjusted Transaction Consideration such that at Completion, the Purchaser shall pay the sum (A) US$120,000,000; and (B) 25% of the amount in the Trust Account (net of taxes) on the Completion Date less the Dissenting Shareholders Payback Amount, but not more than 85% of the Adjusted Transaction Consideration (‘‘Completion Payment’’). The Remaining Completion Amount shall be paid to the Company as follows:
(i) within six (6) months after the Completion Date; and

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LETTER FROM THE BOARD

(ii) if the Remaining Completion Amount is not paid on the date which is six (6) months after the Completion Date and until full payment of the Remaining Completion Amount:
(A) the Company, the Purchaser and their respective Affiliates shall ensure that the Disposal Group defers any CAPEX (except for CAPEX required for the committed work obligations under the Contracts) such that the Disposal Group shall be able to free its cash flow for the purposes of cash distribution (either by way of dividends, repayment of shareholders loan or other means) to its shareholders;
(B) any cash distributions by the Disposal Group to the Purchaser (or its Affiliates) shall first be used to ensure that the Purchaser Cash Position is not less than US$10,000,000 and thereafter the remaining cash distribution shall be used for repayment of the Remaining Completion Amount; and
(C) the Purchaser shall use its best efforts to raise the maximum amount of funds (whether that be by way of debt or equity fund raising) for repayment of the Remaining Completion Amount provided that (1) if the net proceeds raised is less than US$1,000,000 then such amount shall not be used for repayment of the Remaining Completion Amount; and (2) the net proceeds raised shall first be used to ensure that the Purchaser Cash Position is no less than US$10,000,000 and thereafter the remaining net proceeds raised (over and above the Purchaser Cash Position of US$10,000,000) shall be used for repayment of the Remaining Completion Amount.

Before full payment of the Deferred Consideration (or, as the case may be, the Remaining Completion Amount), in the case the Purchaser (or its Affiliate) transfers any of the Sale Shares to any third party, the Purchaser undertakes to immediately pay to the Company a sum equal to the outstanding Deferred Consideration (or, as the case may be, the Remaining Completion Amount) (including interest thereon) owing to the Company by the Purchaser from the amount received by the Purchaser (or its Affiliate) from the transfer of such Sale Shares for the purposes of full settlement of the Deferred Consideration (or, as the case may be, the Remaining Completion Amount).

For the avoidance of doubt, the Deferred Consideration (or, as the case may be, the Remaining Completion Amount) can be repaid at any time after Completion.

The imposition of the Purchaser Cash Position of US$10,000,000, in both cases, is intended to preserve the Seller’s interest that the Purchaser has sufficient cash in its bank account for working capital.

The Enterprise Value and the considerations arising out of the Transaction set out above were determined after arm’s length negotiations between the Company and the Purchaser with reference to a number of factors, including

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LETTER FROM THE BOARD

but not limited to the latest independent technical reserve reports and internal reserve team reserve estimates, internal cash flow and EBITDA (earnings before interest, taxes, depreciation and amortization) as well as forecasts analysis of the 2P reserves value of the underlying assets of the Disposal Company as at the Effective Date.

The Directors consider the Consideration is fair and reasonable and in the interests of the Company and the Shareholders as a whole.

2.5 Conditions precedent

Completion is conditional on the following conditions (the ‘‘Conditions’’) being satisfied on or before the Longstop Date:

(1) the Company:
(A) having procured the approval of the Competent Body for the indirect transfer of subsoil use rights under the Contracts through sale and transfer of the Sale Shares;
(B) having procured either (i) official waiver by the Competent Body of all its preemption rights in connection with the indirect transfer of subsoil use rights under the Contracts through sale and purchase to Reach Energy (being the SPV nominated by the Purchaser) of the Sale Shares or (ii) an official response from the Competent Body that a waiver of all its preemption rights in connection with the indirect transfer of subsoil use rights under the Contracts through sale and transfer to Reach Energy (being the SPV nominated by the Purchaser) of the Sale Shares is not required; and
(C) having received (i) approval from shareholders of the Company at a general meeting, and (ii) to the extent required, consents, waivers, permissions and approvals in relation to the Transaction from the Stock Exchange and the Securities and Futures Commission of Hong Kong;
(2) the Purchaser:
(A) having received the approval of the Securities Commission Malaysia for the purchase of the Sale Shares and the assignment and transfer of the Shareholder Loans in proportion to the Relevant Percentage pursuant to the Sale and Purchase Agreement;
(B) having procured the passing at a general meeting of the Purchaser of a resolution approving the purchase of the Sale Shares and the assignment and transfer of the Shareholder Loans in proportion to the Relevant Percentage pursuant to the Sale and Purchase Agreement; and

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LETTER FROM THE BOARD

(C) having received the approval from the Committee of the Republic Kazakhstan for Regulation of Natural Monopolies and Competition Protection for the acquisition of the Sale Shares on the terms of the Sale and Purchase Agreement.

None of the above Conditions are waivable. As at the Latest Practicable Date, none of the above Conditions has been fulfilled.

If one or more of the Conditions:

(1) remains un-satisfied on the Longstop Date and has not been waived on or before that date; or
(2) becomes impossible to satisfy on or before the Longstop Date and, if it is a Condition which can be waived, has not been waived within five (5) days of such Condition becoming impossible to satisfy. In such case, such Party shall immediately inform the other Party the occurrence of such impossibility and in such case the other Party shall not be required to fulfill the Conditions which the other Party is responsible to satisfy on or before the Longstop Date;

either Party may give notice to the other Party that it wishes to terminate the Sale and Purchase Agreement:

(a) if it is a termination pursuant to (1) above, the Party who has failed to satisfy all or any of the Conditions which such Party is responsible to satisfy by the Longstop Date shall pay to the other Party the Break Fee provided that the other Party has satisfied the Conditions which the other Party is responsible to satisfy by the Longstop Date; and
(b) if it is a termination pursuant to (2) above, the Party who has failed to satisfy all or any of the Conditions which such Party is responsible to satisfy because it becomes impossible to satisfy on or before the Longstop Date, such Party shall pay to the other Party the Break Fee and the other Party shall not be required to fulfill any of the remaining Conditions which the other Party is responsible to satisfy,

provided that no Break Fee is payable for a failure to satisfy the Condition set out in (2)(C) above. The Break Fee represents a genuine pre-estimate of the other Party’s expense and costs arising from or in connection with the Sale and Purchase Agreement or the Transaction. The Break Fee was determined by the Parties based on arm’s length negotiation.

If, following satisfaction or waiver of all the Conditions, any of the completion obligations of the Company and the Seller are not complied with by the Company on or before the Completion Date and the Purchaser chooses to terminate the Sale and Purchase Agreement, the Purchaser shall have the right to claim against the Company any loss or damage suffered by the Purchaser provided that the maximum aggregate liability of the Company shall not exceed US$8,000,000.

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LETTER FROM THE BOARD

If, following satisfaction or waiver of all the Conditions, any of the completion obligations of the Purchaser are not complied with by the Purchaser on or before the Completion Date and the Company chooses to terminate the Sale and Purchase Agreement, the Company shall have the right to immediately draw on the Bank Guarantee and to the Purchaser any loss or damage suffered by the Company provided that the maximum aggregate liability of the Purchaser shall not exceed US$8,000,000. The Company shall not be entitled to terminate the Sale and Purchase Agreement if any of the completion obligations of the Company are not complied with.

The cap of US$8,000,000 above was determined after negotiation between the Parties.

The Purchaser has provided the Company with the Bank Guarantee on March 14, 2016. The Bank Guarantee shall be used to satisfy in full the Break Fee and/or in part any payment, liability or obligation of the Purchaser in the case of a termination by the Company for a failure by the Purchaser to comply with the completion obligations after satisfaction or waiver of all the Conditions under the Sale and Purchase Agreement.

2.6 Completion

Completion shall take place on the tenth (10th) day following the satisfaction or waiver of all the Conditions or at such other time as the Company and the Purchaser shall agree or at such other time as the Company and the Purchaser shall agree (‘‘Completion Date’’). If the tenth (10th) day is not a Business Day, then Completion shall be on the next day which is a Business Day.

Immediately after Completion, the Disposal Company will cease to be an indirectly wholly owned subsidiary of the Group and the Group (through the Seller) will hold 40% of the issued share capital of the Disposal Company. As at the Latest Practicable Date, the Company intended to retain the remaining shares in the Disposal Company.

2.7 Shareholders’ Agreement

To make provision for the management and administration of the Disposal Company’s affairs and business, the Parties including Reach Energy and the Disposal Company has signed the Shareholders’ Agreement on April 11, 2016, subject to the Shareholders’ Agreement coming into effect on the Completion Date.

Major terms and conditions of the Shareholders’ Agreement are as follows:

. Business of the Disposal Company

The objective of the Disposal Company’s business, through Emir-Oil, is the exploration, production and exploitation of hydrocarbon resources in Kazakhstan, including but not limited to the business of production of oil under the Aksaz Production Contract, Dolinnoe Production Contract, Emir Production Contract and Kariman Production Contract and exploration of hydrocarbon materials under the Aksaz-Dolinnoe-Emir Exploration Contract.

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LETTER FROM THE BOARD

. Board and management

The board of directors of the Disposal Company shall have five (5) directors. Reach Energy will have the right to nominate three (3) directors, whereas the Seller will have right to nominate two (2) directors. In the case where the shareholders of the Disposal Company agree that the board of directors of the Disposal Company shall have three (3) directors, Reach Energy will have the right to nominate two (2) directors, whereas the Seller will have right to nominate one (1) director. Directors of the Disposal Company can only be removed by the Disposal Company’s general meeting at the request of the appointing shareholders. The board of directors of the Disposal Company shall have one chairman, who shall be a director elected from the directors appointed at the nomination of Reach Energy. The chairman shall not have a casting vote.

. Management of Emir-Oil

The shareholders of the Disposal Company and the Disposal Company shall procure that the composition of the management board of Emir-Oil shall be in proportion to the respective shareholding percentage of Reach Energy and the Seller (and any other shareholder subsequent to the Completion Date) in the Disposal Company. The management board of Emir-Oil shall have five (5) members, among which, three (3) shall be appointed by Reach Energy, and two (2) shall be appointed by the Seller. The management board of Emir-Oil shall have one (1) chairman, who shall be elected from the members appointed by Reach Energy. The chairman shall not have a casting vote.

. Appointment of key personnel

Reach Energy shall have the right to appoint the general director of Emir-Oil (‘‘General Director’’) so long as Reach Energy remains the single largest shareholder in the Disposal Company and Reach Energy has obtained the approval of the management board of Emir-Oil before such appointment (whose approval shall not be unreasonably withheld).

The Seller shall have the right to appoint the finance and commercial manager of Emir-Oil (‘‘Finance and Commercial Manager’’) who shall be in charge of finance and commercial matters subject to the Seller being the second largest shareholder in the Disposal Company; and provided such Finance and Commercial Manager is not a member of the management board of Emir-Oil, the approval of the management board of Emir-Oil (whose approval shall not be unreasonably withheld). The Finance and Commercial Manager shall report to the General Director.

. Reserved Matters

Certain matters require the approval of shareholders holding at least seventyfive per cent. (75%) of the shares in the Disposal Company (‘‘Reserved Matters’’), include: approving and changing budgets and work plans which results in the incurring of any CAPEX exceeding by ten per cent (10%) over the amount for that

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LETTER FROM THE BOARD

item in the approved budget or work plan; entering into oil and gas sales arrangements; cancelling, extending or transferring hydrocarbon licenses or applying for new licenses; submitting reserve report or development plan to the government or releasing for listing compliance purpose; entering into major contract, liability or commitment which exceeds certain monetary thresholds; amending constitutional documents; amending the Shareholders’ Agreement; paying dividends to shareholders or the granting or repaying shareholders’ loans or interests; proposing for winding-up or liquidation; and transferring shares of Emir-Oil.

. Deadlock

If shareholders of the Disposal Company fail to agree on the Reserved Matters, they may refer the matter to the respective chief executive officers (the ‘‘CEOs’’) of the Purchaser and the Company. If the dispute is not resolved by the CEOs within 3 months, the shareholders shall agree to engage an independent expert to render an opinion in relation to such dispute. If the shareholders cannot agree on which expert to engage, Reach Energy shall be entitled to appoint an independent expert from a list of two (2) experts provided by the Company; if Reach Energy fails to choose the expert, the Company is entitled to appoint an expert from the same list.

Where any independent expert has rendered his opinion, but the shareholders are still unable to resolve the dispute, Reach Energy may, at its sole discretion, elect to either to submit the matter to arbitration at the Singapore International Arbitration Centre or serve a notice in writing on the Seller requiring the Seller to sell all the shares in the Disposal Company held by the Seller at the sale price to be determined in accordance with the provisions of the Shareholders’ Agreement. In the latter event, the Company shall comply with the applicable Listing Rules including, where applicable, the requirements to obtain shareholders’ approval.

. Budgets, work plans and account

Annual budgets and work plans

Annual budget and work plan of Emir-Oil shall be first approved by the board of the Disposal Company and once approved by the board of the Disposal Company the annual budget and work plan shall then be tabled before shareholders of the Disposal Company for approval. Certain expenditures (in relation to drilling, facility expansion, construction of pipelines and workover exceeding US$3 million) are subject to the approval of the management board of Emir-Oil.

. Funding of the Disposal Company

Funding additional to the budgets and work plans shall be determined jointly by the General Director and the Finance and Commercial Manager after consultation with the board of directors of the Disposal Company. Shareholders shall advance funds in proportionate to their shareholding in the Disposal Company if the funding proposal is approved by the board of directors of the Disposal Company.

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LETTER FROM THE BOARD

. Transfer of shares

Restriction on share transfers

Shareholders of the Disposal Company shall not, other than in accordance with the provisions of the articles of the Disposal Company, the Shareholders’ Agreement and other relevant agreements, sell, assign, transfer, create or permit to subsist any trust, confer any option, right or interest, enter into any agreement, arrangement or understanding in respect of the voting rights or dividends or other rights or payments, create, transfer or decrease any economic interest in or otherwise dispose of any shares or any interest in or rights attaching to any shares of the Disposal Company.

Permitted transfers

Any shareholder of the Disposal Company may at any time transfer shares of the Disposal Company to its Affiliates, provided that the transferee first enters into a deed of accession.

Right of pre-emption and tag-along rights

Each shareholder of the Disposal Company may transfer some or all of their shares to any third party purchaser (not being a transfer to an Affiliate) provided that the transferor shall offer to all other shareholders the shares proposed to be sold to the third party purchaser in accordance with the terms of the Shareholders’ Agreement. The non-selling shareholder(s) shall have the right either (a) to purchase all the shares (or the number of shares in proportionate to their existing shareholding if more than one existing shareholders are to accept the offer) proposed to be sold on the same terms offered by the third party purchaser or at the price determined in accordance with the Shareholders’ Agreement; or (b) to require the third party purchaser to purchase up to the pro rata portion of the shares held by it.

. Default and termination

Events of Default

Events of default (‘‘Events of Default’’) include the failure to provide funding and other shareholder duly gives notice that it wishes the failure to be an Event of Default; insolvency of the shareholder; material breach of the Shareholders’ Agreement; events otherwise stipulated to be an Event of Default in the articles of the Disposal Company or in the Shareholders’ Agreement; a change of control of a shareholder of the Disposal Company other than in the case of the Purchaser or the Company. The defaulting shareholder shall be deemed to offer to all other shareholders all of its shares in the Disposal Company at a price determined in accordance with the Shareholders’ Agreement.

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LETTER FROM THE BOARD

Termination events

The Shareholders’ Agreement may be terminated until the earlier of the following:

(a) dissolution of the Disposal Company;
(b) holding by one shareholder of one hundred per cent. (100%) of the shares of the Disposal Company; or
(c) the agreement of all the parties to the Shareholders’ Agreement that it be terminated.

If any of the parties shall invoke upon the provisions of deadlock, right of pre-emption and tag-along rights, and/or Events of Default under the Shareholders Agreement to sell or transfer the shares in the Disposal Company, the price per share (‘‘Prescribed Price’’) in US dollar shall be as agreed between the proposing transferor or, as the case may be, the non-defaulting party and the other shareholders. If the parties fail to reach agreement, the Prescribed Price is the price per share to be determined by an expert pursuant to the terms of the Shareholders Agreement. One of the big four accounting firms mutually agreed by the parties shall be appointed as the expert. If no agreement is reached, then Deloitte shall be appointed as the expert (unless otherwise agreed by the parties).

3. INFORMATION ABOUT THE PARTIES

The Group

The Group is an independent oil and gas group engaged in the exploration and production of oil and gas in PRC, Kazakhstan and the United States of America.

The Seller

The Seller is an indirectly wholly-owned subsidiary of the Company and is the investment holding company of the Disposal Company.

The Purchaser

The Purchaser is an oil and gas special purpose acquisition company listed on the Main Market of Bursa Malaysia Securities Berhad. The Purchaser’s management team comprises of E&P veterans with practical and technical field experiences and track record encompassing the entire value chain of the E&P sector from companies such as Exxon, Shell and Petronas. As of February 29, 2016, the Purchaser had RM755,297,965 (equivalent to approximately US$188,824,491) (raised from its initial public offering in August 2014) in its trust account for use in its qualifying acquisition. The Disposal is considered a ‘‘qualifying acquisition’’ for the Purchaser.

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LETTER FROM THE BOARD

Reach Energy

Reach Energy is a limited liability company incorporated in Malaysia on April 6, 2016 to receive the transfer of the Sale Shares and Relevant Percentage of the Shareholder Loan. Reach Energy is a wholly-owned subsidiary of the Purchaser and is principally engaged in investment holding.

4. INFORMATION ABOUT THE DISPOSAL GROUP

The Disposal Company is a company organized and existing under the laws of the Netherlands. The Disposal Company is the investment holding company of Emir-Oil which is primarily engaged in the exploration, production and exploitation of hydrocarbon resources in Kazakhstan, including but not limited to the business of production of oil under the Aksaz Production Contract, Dolinnoe Production Contract, Emir Production Contract and Kariman Production Contract and exploration of hydrocarbon materials under the Aksaz-Dolinnoe-Emir Exploration Contract.

A summary of the components of the contract block as extracted from the Contracts is as follows:

Fields/Area Type of field Type of contract Duration Commencement date Expiry date (years) Producing Fields: — Kariman Oil Production Contract 25 September 9, 2011 September 9, 2036 — Dolinnoe Oil Production Contract 25 September 9, 2011 September 9, 2036 — Aksaz Condensate-rich gas Production Contract 25 September 9, 2011 September 9, 2036 — Emir Oil Production Contract 17 March 1, 2013 March 1, 2030 Exploration Area — Exploration Contract 2 January 9, 2015 January 9, 2017 Emir-Oil Concession Block	Area (km2) 12.24 18.24 11.48 3.53 804.81
	850.30

Fields/Area
Type of field
Type of contract
Duration
Commencement
date
Expiry date
(years)
Producing Fields:
— Kariman
Oil
Production Contract
25
September 9, 2011 September 9, 2036
— Dolinnoe
Oil
Production Contract
25
September 9, 2011 September 9, 2036
— Aksaz
Condensate-rich
gas
Production Contract
25
September 9, 2011 September 9, 2036
— Emir
Oil
Production Contract
17
March 1, 2013
March 1, 2030
Exploration Area
—
Exploration Contract
2
January 9, 2015
January 9, 2017
Emir-Oil Concession Block

Area
(km2)
12.24
18.24
11.48
3.53
804.81

850.30

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LETTER FROM THE BOARD

The table below sets out the indicative 1P, 2P and 3P oil and natural gas reserves estimates of the Target Group as at year-end 2014 and 2015:

Thousands of Barrels for Oil	Dec 31, 2014	Dec 31, 2014		Dec 31, 2015	Dec 31, 2015
Millions of standard cubic feet
for Gas	Oil	Gas	BOE1	Oil	Gas	BOE
Proved (1P)	33,799	43,232	41,005	32,525	36,006	38,526
Proved + Probable (2P)	97,864	95,111 113,717		96,150	92,380 111,547
Proved + Probable + Possible
(3P)	130,203	122,219 150,574		124,952	120,438 145,025

Notes:

Barrels of oil equivalent (‘‘BOE’’, converting at 6 thousand standard cubic feet of gas to 1 BOE for reference purpose only)
The indicative 1P, 2P and 3P oil and natural gas reserves estimates of the Target Group as at year-end 2014 was extracted from Emir-Oil’s 2014 Reserve Report produced by Chapman Petroleum Engineering Ltd. in accordance with SPE-PRMS standard.
The indicated 1P, 2P and 3P oil and natural gas reserves estimates of the Target Group as at year-end 2015 was extracted from the Competent Person’s Report in Appendix I which was prepared in accordance with SPE-PRMS standard.

As at December 31, 2015, Emir-Oil operated a total 48 wells. For the full year 2015, Emir-Oil’s average daily oil production and average daily gas production was 3,412 BOPD and 5,893 MSCF/day respectively. The overall average realized oil price for Emir-Oil was US$43.95/barrel with export sales comprising 88% of total sales volumes. The average realized export price (after deducting export sales and marketing commission of US$5.56/barrel) was US$48.41/barrel, and the average domestic price was US$12.02/barrel. Average realized gas price was US$0.95/MSCF.

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Corporate Structure of the Disposal Group before and after Completion

Before Completion

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the Company
100% 100%
MI Energy Corporation MIE New Ventures
1% 99%
the Seller
100%
Disposal Company
100%
Emir-Oil
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After Completion

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the Company
100% 100%
MI Energy Corporation MIE New Ventures Purchaser
1% 99%
100%
the Seller SPV
40% 60%
Disposal Company
100%
Emir-Oil
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LETTER FROM THE BOARD

5. FINANCIAL INFORMATION AND IMPACT OF THE DISPOSAL

As at September 30, 2015, the Disposal Group had unaudited combined total assets and net assets of approximately US$518.9 million and US$115.1 million, respectively. Selected combined financial information of the Disposal Group is set out below:

Revenue Operating profit/(loss) Profit/(loss) before taxation Income tax (expenses)/credit Profit/(loss) after taxation Operating profit/(loss) margin (%) Profit/(loss) after taxation margin (%) Shareholder’s funds Total borrowings Number of shares in issue Shareholder’s fund per share Gearing ratio (times)	For the financial year ended December 31, 2012 2013 2014 (Unaudited) (Unaudited) (Unaudited) US$’000 US$’000 US$’000 88,279 126,443 121,452 8,725 24,695 18,309 6,677 14,797 14,347 (3,544) 2,449 (7,202) 3,133 17,246 7,145 9.88% 19.53% 15.08% 3.55% 13.64% 5.88% 75,496 95,078 121,774 175,439 203,323 240,169 18,000 18,000 18,000 4.19 5.28 6.77 2.32 2.14 1.97	For the 9-month period ended September 30, 2015 (Unaudited) US$’000 41,108 (8,567) (4,305) (3,406) (7,711) (20.84%) (18.76%) 115,094 285,537 18,000 6.39 2.48

Notes:

(1) Based on total borrowings divided by shareholders’ funds.

Based on the unaudited book value of the Sale Shares and the Relevant Percentage of the Shareholder Loans of approximately US$236.6 million (as at September 30, 2015), and assuming Net Contribution of US$21 million, the expected net proceeds from the Disposal will be US$173.8 million; accordingly, it is estimated that the Group will record a loss of approximately US$83.8 million at Completion.

Upon Completion, it is estimated that the total assets of the Group would decrease by approximately US$262.8 million and that the total liabilities of the Group would decrease by approximately US$124.5 million, representing a net decrease in net assets of US$138.3 million based on the unaudited consolidated financial statements of the Group as at September 30, 2015. Such a decrease in net assets is calculated by reference to: (i) addition of the Transaction

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Consideration; (ii) subtraction of the book value of the deconsolidated assets and liabilities of the Disposal Group as a subsidiary; (iii) addition of the fair value of the 40% equity interest in the Disposal Group retained by the Company; and (iv) subtraction of the transaction costs and expenses attributable to the Transaction.

Upon Completion, the Disposal Company will cease to be an indirectly wholly owned subsidiary of the Group and the accounts of the Disposal Company will no longer be consolidated in the financial statements of the Group thereafter. The Disposal Company will be accounted for using equity method.

6. REASONS FOR AND BENEFITS OF THE DISPOSAL

Since the acquisition of Emir-Oil in 2011, the Group has contributed tremendous expertise and resources that has led to many remarkable operational milestones of Emir-Oil, which include the increased production from approximately 2,170 barrels per day to a peak of above 5,000 barrels per day in 2014 as well as horizontal well drilling. The Group considers it is now our best interests and optimal timing to team up a strong strategic partner to maximize the growth and economic value of Emir-Oil with such prolific 2P reserves and high potential of further reserves/resources upgrade. In addition, this divestment opportunity enhances the financial strength and liquidity of the Group under current volatile oil price environment while allowing the Group to maintain a stake in an attractive asset. The Company and Emir-Oil is confident that the experienced management team of the Purchaser will bring significant value to the assets and create synergy for the Disposal Group. Being listed on the Main Market of Bursa Malaysia Securities Berhad, the Purchaser also opens up an additional source of capital raising for the Disposal Company, thereby further preparing Emir-Oil to be able to capitalize on the rapid expansion and growth once oil price recovers.

In view of the above, the Directors (including the independent non-executive Directors) are of the view that the terms of the Disposal are fair and reasonable and on normal commercial terms and that the entering into of the Sale and Purchase Agreement and the Transaction are in the interest of the Company and the Shareholders as a whole.

7. USE OF PROCEEDS FROM THE DISPOSAL

The net proceeds from the Disposal after deducting related transaction costs and expenses are estimated to be US$173.8 million. The Group intends to apply the net proceeds from the Disposal for general working capital of the Group.

8. IMPLICATIONS UNDER THE LISTING RULES

As one or more of the Relevant Ratios in respect of the Disposal are more than 25% but less than 75%, the Disposal constitutes a major transaction of the Company under the Listing Rules and is therefore subject to approval of the Shareholders by way of poll at the EGM.

To the best knowledge, information and belief of the Directors, having made all reasonable enquiries, no Shareholders has a material interest in the Disposal, no Shareholders is required to abstain from voting on the resolution(s) to be proposed at the EGM to approve the Disposal.

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In compliance with the requirements of Chapter 18 of the Listing Rules, the Company has appointed the Competent Person to issue the Competent Person’s Report to provide the estimated amount of resources and reserves in respect of the Disposal Company in accordance with SPE-PRMS standard.

To the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, each of the Competent Person and its ultimate beneficial owners are Independent Third Parties.

9. EGM

You will find on page EGM-1 of this circular a notice of the EGM to be held at Room 3, United Conference Centre, 10/F, United Centre, 95 Queensway, Admiralty, Hong Kong on June 20, 2016 immediately after the conclusion or adjournment of annual general meeting of the Company for the year 2016.

A form of proxy for use at the EGM is enclosed. Whether or not you are able to attend and vote at the EGM, please complete and sign the enclosed form of proxy in accordance with the instructions printed thereon and return it to the Company’s branch share registrar in Hong Kong, Tricor Investor Services Limited, at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong as soon as possible but in any event not less than 48 hours before the time appointed for the holding of the EGM or any adjournment thereof. Completion and return of the form of proxy as instructed will not preclude shareholders from attending and voting in person at the EGM if they so wish.

10. RECOMMENDATION

The Directors (including the independent non-executive Directors) consider that the terms of the Sale and Purchase Agreement are on normal commercial terms and are fair and reasonable and in the interests of the Company and the Shareholders as a whole. Accordingly, the Directors (including the independent non-executive Directors) recommend the Shareholders to vote in favour of the relevant resolutions to approve the Sale and Purchase Agreement and the transactions contemplated thereunder at the EGM.

11. OTHER INFORMATION

Your attention is also drawn to the appendices to this circular and the notice of the EGM.

Yours faithfully, For and on behalf of the Board Zhang Ruilin Chairman

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APPENDIX I COMPETENT PERSON'S REPORT

The following is the text of the Competent Person’s Report issued by the Competent Person, Chapman Petroleum Engineering Ltd., for the purpose of inclusion in this circular.

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2016-D3-23 Corp-Table 4b-PD.xlsx	Table4b	Page 2	Forecast price &Costs	MIEHoldingsCorporation	ADEKBlock,Kazakhstan	CorporateIncomeTax(CIT) andExcessProfitTax(EPT)	January1,2016	(AsofDecember31, 2015)	ToatlProvedDevelopedConsolidation	Discounted@ Discounted@	Net Cash Flow Total Non- Non- Escalculated Taxable	(after Opex& deduct deduct Non-deduct Income Before Capital Taxable Corporate Net EPT EPT	Capex) Capital Sales Transp. r~nitl'll Deductions Deductions Income Income Tax 5% 10% 15% 20% Income Ratio Amount 5% 10% 15% 20%	Year $M M$/vr~ $M $M M$/vr. $M $M $M $M s $M $M	2015	2016 12,649 400 85 1,570 2,055 14,704 13,353 1,350 270 264 258 252 247 1,080 0.08 0	2017 16,327 5,200 51 916 6,291 22,618 16,242 6,376 1,275 1,185 1,105 1,034 970 5,101 031 0	2018 60,200 3,250 106 1,892 5,460 65,660 13,914 51,746 10,349 9,161 8,155 7,297 6,561 41,396 2.98 18,747 16,594 14,772 13,219 11,884	2019 82,455 400 117 2,081 2,757 85,212 13,741 71,471 14,294 12,050 10,240 8,764 7,551 57,176 4.16 24,344 20,523 17,439 14,926 12,861	2020 72,141 900 99 1,769 2,997 75,138 11,909 63,229 12,646 10,153 8,235 6,742 5,567 50,583 4.25 21,659 17,390 14,105 11,548 9,535	2021 67,339 1,300 91 1,621 3,325 70,664 10,407 60,258 12,052 9,215 7,135 5,587 4,421 48,206 4 63 21,308 16,293 12,615 9,879 7,817	2022 73,018 500 92 1,640 2,513 75,532 8,799 66,733 13,347 9,719 7,183 5,381 4,080 53,386 6 07 25,576 18,625 13,765 10,311 7,819	2023 67,414 400 82 1,461 2,232 69,646 7,533 62,113 12,423 8,616 6,078 4,355 3,165 49,690 6.60 24,307 16,858 11,893 8,521 6,193	2024 65,762 0 77 1,374 1,700 67,462 6,334 61,128 12,226 8,075 5,438 3,727 2,596 48,902 7.72 24,507 16,187 10,900 7,471 5,203	2025 53,554 0 66 1,167 1,474 55,027 5,364 49,643 9,929 6,246 4,015 2,632 1,757 39,715 7.38 19,867 12,498 8,034 5,266 3,515	2026 45,302 0 56 992 1,277 46,579 4,576 42,003 8,401 5,033 3,088 1,936 1,239 33,602 7,34 16,765 10,044 6,163 3,864 2,472	2027 38,084 0 47 842 1,106 39,190 3,890 35,300 7,060 4,028 2,359 1,415 867 28,240 7.26 14,038 8,010 4,691 2,814 1,725	2028 32,289 0 40 716 959 33,248 3,306 29,942 5,988 3,254 1,819 1,044 613 23,954 7.24 11,901 6,467 3,616 2,074 1,218	2029 27,341 0 34 608 831 28,172 2,810 25,362 5,072 2,625 1,401 769 433 20,289 7.22 10,095 5,225 2,788 1,530 861	2030 21,755 0 28 504 702 22,457 2,137 20,915 4,183 2,062 1,050 551 297 16,732 7.83 8,462 4,171 2,125 1,115 602	2031 18,399 0 23 415 590 18,988 1,817 17,172 3,434 1,612 784 394 203 13,738 7.56 6,852 3,216 1,564 785 406	2032 14,291 0 20 354 514 14,804 1,544 13,260 2,652 1,186 550 264 131 10,608 6 87 5,199 2,324 1,079 518 257	2033 12,139 0 16 285 422 12,561 1,312 11,248 2,250 958 424 195 93 8,999 6,86 4,434 1,888 836 384 182	2034 9,741 0 14 247 373 10,114 1,110 9,004 1,801 730 309 136 62 7,203 6.49 3,529 1,431 605 266 121	2035 8,109 0 11 200 308 8,417 881 7,622 1,524 589 238 100 44 6,097 6,92 2,983 1,152 465 195 85	2036 3,308 0 6 115 180 3,489 749 2,740 548 202 78 31 13 2,192 2.93 825 304 117 47 20	Total 801,616 12,350 1,164 20,769 38,066 839,682 131,749 708,614 141,723 96,699 69,684 52,354 40,662 566,891 265,399 179,201 127,572 94,734 72,776	0 07 1.29	0 05 0.89	37 *...________[IJ•fiiiJ•IJPetroleumEngineeringLtd.***

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MIE HOLDINGS CORPORATION
LEGEND
ADEK BLOCK
AREA OF INTEREST
(LICENSE TERRITORY)
FAULT LINES MANGISTAU OBLAST, KAZAKHSTAN
CONTRACT AREAS ORIENTATION MAP
LISENSE AREA
JAN. 2016 JOB No. 6144
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## STRUCTURAL ELEVATION (sL)- m
PROPOSED LOCATIONS
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PROBABLE RESERVES
POSSIBLE RESERVES
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MIE HOLDINGS CORPORATION AKSAZ FIELD ADEK BLOCK (LICENSE AREA) MANGISTAU OBLAST, KAZAKHSTAN STRUCTURE ON MIDDLE TRIASSIC T2B JAN. 2016 JOB No. 6144 FIGURE No. 1a

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## STRUCTURAL ELEVATION (sL)- m
PROPOSED LOCATIONS
WELL OF INTEREST
PROVED RESERVES
Emir PROBABLE RESERVES
POSSIBLE RESERVES
Borly
AKSAZ MIE HOLDINGS CORPORATION
Yessen
Dolinnoe
AKSAZ FIELD
North
Kariman ADEK BLOCK (LICENSE AREA)
MANGISTAU OBLAST, KAZAKHSTAN
Kariman
STRUCTURE ON MIDDLE TRIASSIC T2C
JAN. 2016 JOB No. 6144 FIGURE No. 1b
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Emir
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Borly
AKSAZ MIE HOLDINGS CORPORATION
Yessen
Dolinnoe
AKSAZ FIELD
North
Kariman ADEK BLOCK (LICENSE AREA)
MANGISTAU OBLAST, KAZAKHSTAN
Kariman
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MIE HOLDINGS CORPORATION ADEK BLOCK OIL WELL LOG ANALYSIS MANGISTAU OBLAST, KAZAKHSTAN AKSAZ 1 TRIASSIC JAN. 2016 JOB No. 6144 FIGURE No. 2a 60

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MIE HOLDINGS CORPORATION ADEK BLOCK OIL WELL LOG ANALYSIS MANGISTAU OBLAST, KAZAKHSTAN AKSAZ 2 TRIASSIC JAN. 2016 JOB No. 6144 FIGURE No. 2b 61

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MIE HOLDINGS CORPORATION ADEK BLOCK OIL WELL LOG ANALYSIS MANGISTAU OBLAST, KAZAKHSTAN AKSAZ 3 TRIASSIC JAN. 2016 JOB No. 6144 FIGURE No. 2c 62

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MIE HOLDINGS CORPORATION ADEK BLOCK OIL WELL LOG ANALYSIS MANGISTAU OBLAST, KAZAKHSTAN AKSAZ 6 TRIASSIC JAN. 2016 JOB No. 6144 FIGURE No. 2e

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D12ST
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FAULT LINES
AREA OF ASSIGNED RESERVES
## STRUCTURAL ELEVATION (sL)- m
PROPOSED LOCATIONS
WELL OF INTEREST
Emir
Borly
Aksaz MIE HOLDINGS CORPORATION
Yessen
DOLINNOE
DOLINNOE FIELD
North
Kariman ADEK BLOCK (LICENSE AREA)
MANGISTAU OBLAST, KAZAKHSTAN
Kariman
STRUCTURE ON MIDDLE TRIASSIC T2B
JAN. 2016 JOB No. 6144 FIGURE No. 1a
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AREA OF ASSIGNED RESERVES
## STRUCTURAL ELEVATION (sL)- m
PROPOSED LOCATIONS
WELL OF INTEREST
Emir
Borly
Aksaz MIE HOLDINGS CORPORATION
Yessen
DOLINNOE
DOLINNOE FIELD
North
Kariman ADEK BLOCK (LICENSE AREA)
MANGISTAU OBLAST, KAZAKHSTAN
Kariman
STRUCTURE ON MIDDLE TRIASSIC T2C
JAN. 2016 JOB No. 6144 FIGURE No. 1b
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ADEK BLOCK OIL WELL LOG ANALYSIS MANGISTAU OBLAST, KAZAKHSTAN DOLINNOE-1 MIDDLE TRIASSIC T2 JAN. 2016 JOB No. 6144 FIGURE No. 2a

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MIE HOLDINGS CORPORATION ADEK BLOCK OIL WELL LOG ANALYSIS MANGISTAU OBLAST, KAZAKHSTAN DOLINNOE-3 MIDDLE TRIASSIC T2 JAN. 2016 JOB No. 6144 FIGURE No. 2c

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MIE HOLDINGS CORPORATION
ADEK BLOCK
OIL WELL LOG ANALYSIS
MANGISTAU OBLAST, KAZAKHSTAN
DOLINNOE-5
MIDDLE TRIASSIC T2
JAN. 2016 JOB No. 6144 FIGURE No. 2d
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DOLINNOE-7
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1
E5
m
LEGEND
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FIELD BOUNDARY
## STRUCTURAL ELEVATION (sL)- m
PROPOSED LOCATIONS
WELL OF INTEREST
PROVED RESERVES
EMIR PROBABLE RESERVES
POSSIBLE RESERVES
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EMIR
Borly
Aksaz
Yessen
Dolinnoe
North
Kariman
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MIE HOLDINGS CORPORATION EMIR FIELD ADEK BLOCK (LICENSE AREA) MANGISTAU OBLAST, KAZAKHSTAN STRUCTURE ON TRIASSIC T3 + T2 UPPER JAN. 2016 JOB No. 6144 FIGURE No. 1a

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## STRUCTURAL ELEVATION (sL)- m
PROPOSED LOCATIONS
WELL OF INTEREST
PROVED RESERVES
PROBABLE RESERVES
POSSIBLE RESERVES
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MIE HOLDINGS CORPORATION

EMIR FIELD ADEK BLOCK (LICENSE AREA) MANGISTAU OBLAST, KAZAKHSTAN STRUCTURE ON MIDDLE TRIASSIC T2A JAN. 2016 JOB No. 6144 FIGURE No. 1b

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FAULT LINES FIELD BOUNDARY ## STRUCTURAL ELEVATION (sL)- m PROPOSED LOCATIONS WELL OF INTEREST PROVED RESERVES PROBABLE RESERVES POSSIBLE RESERVES

MIE HOLDINGS CORPORATION

EMIR FIELD

ADEK BLOCK (LICENSE AREA) MANGISTAU OBLAST, KAZAKHSTAN STRUCTURE ON MIDDLE TRIASSIC T2C JAN. 2016 JOB No. 6144 FIGURE No. 1d

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APPENDIX I

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*MIE HOLDINGS CORPORATION*
ADEK BLOCK
OIL WELL LOG ANALYSIS
MANGISTAU OBLAST, KAZAKHSTAN
EMIR-1
MIDDLE TRIASSIC T2
FIGURE No. 2a JAN. 2016 JOB No. 6144

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APPENDIX I

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MIE HOLDINGS CORPORATION
ADEK BLOCK
OIL WELL LOG ANALYSIS
MANGISTAU OBLAST, KAZAKHSTAN
EMIR-2
UPPER TRIASSIC T3
JAN. 2016 JOB No. 6144 FIGURE No. 2b
128
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APPENDIX I

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MIE HOLDINGS CORPORATION ADEK BLOCK OIL WELL LOG ANALYSIS MANGISTAU OBLAST, KAZAKHSTAN EMIR-2 MIDDLE TRIASSIC T2 JAN. 2016 JOB No. 6144 FIGURE No. 2c

129

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MIE HOLDINGS CORPORATION ADEK BLOCK OIL WELL LOG ANALYSIS MANGISTAU OBLAST, KAZAKHSTAN EMIR-5 UPPER TRIASSIC T3 JAN. 2016 JOB No. 6144 FIGURE No. 2d 130

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APPENDIX I

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MIE HOLDINGS CORPORATION ADEK BLOCK OIL WELL LOG ANALYSIS MANGISTAU OBLAST, KAZAKHSTAN EMIR-5 MIDDLE TRIASSIC T2 JAN. 2016 JOB No. 6144 FIGURE No. 2e

131

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APPENDIX I

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MIE HOLDINGS CORPORATION ADEK BLOCK OIL WELL LOG ANALYSIS MANGISTAU OBLAST, KAZAKHSTAN EMIR-6 UPPER TRIASSIC T3 JAN. 2016 JOB No. 6144 FIGURE No. 2f

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APPENDIX I

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MIE HOLDINGS CORPORATION ADEK BLOCK OIL WELL LOG ANALYSIS MANGISTAU OBLAST, KAZAKHSTAN EMIR-6 MIDDLE TRIASSIC T2 JAN. 2016 JOB No. 6144 FIGURE No. 2g

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Loc.8
K3ST2
K124
K13
K123 Loc.1
Loc.3 Loc.6
Loc.2
Loc.5
LEGEND
FAULT LINES
FIELD BOUNDARY
## STRUCTURAL ELEVATION (sL)- m
PROPOSED LOCATIONS
WELL OF INTEREST
PROVED RESERVES
Emir
PROBABLE RESERVES
POSSIBLE RESERVES
Borly
Aksaz MIE HOLDINGS CORPORATION
Yessen
Dolinnoe KARIMAN FIELD
North ADEK BLOCK (LICENSE AREA)
Kariman MANGISTAU OBLAST, KAZAKHSTAN
KARIMAN STRUCTURE ON
UPPER TRIASSIC T3
JAN. 2016 JOB No. 6144 FIGURE No. 1a
157
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APPENDIX I

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Loc.8
K3ST2
K124
K13
Loc.1
K123
Loc.6
Loc.3
Loc.2
Loc.5
LEGEND
FAULT LINES
FIELD BOUNDARY
## STRUCTURAL ELEVATION (sL)- m
PROPOSED LOCATIONS
WELL OF INTEREST
PROVED RESERVES
Emir PROBABLE RESERVES
POSSIBLE RESERVES
Borly
Aksaz MIE HOLDINGS CORPORATION
Yessen
Dolinnoe KARIMAN FIELD
North ADEK BLOCK (LICENSE AREA)
Kariman MANGISTAU OBLAST, KAZAKHSTAN
KARIMAN STRUCTURE ON
MIDDLE TRIASSIC T2 UPPER
JAN. 2016 JOB No. 6144 FIGURE No. 1b
158
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Loc.8
K3ST2
K124
K13
Loc.1
K123
Loc.3
Loc.6
Loc.2
Loc.5
LEGEND
FAULT LINES
FIELD BOUNDARY
## STRUCTURAL ELEVATION (sL)- m
PROPOSED LOCATIONS
WELL OF INTEREST
PROVED RESERVES
PROBABLE RESERVES
Emir
POSSIBLE RESERVES
Borly
Aksaz MIE HOLDINGS CORPORATION
Yessen
Dolinnoe KARIMAN FIELD
North ADEK BLOCK (LICENSE AREA)
Kariman MANGISTAU OBLAST, KAZAKHSTAN
KARIMAN STRUCTURE ON
MIDDLE TRIASSIC T2A
JAN. 2016 JOB No. 6144 FIGURE No. 1c
159
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Loc.8
K3ST2
K124
K13
K123 Loc.1
Loc.3
Loc.6
Loc.2
Loc.5
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LEGEND
FAULT LINES
FIELD BOUNDARY
## STRUCTURAL ELEVATION (sL)- m
PROPOSED LOCATIONS
WELL OF INTEREST
PROVED RESERVES
Emir
PROBABLE RESERVES
POSSIBLE RESERVES
Borly
Aksaz MIE HOLDINGS CORPORATION
Yessen
Dolinnoe KARIMAN FIELD
North ADEK BLOCK (LICENSE AREA)
Kariman MANGISTAU OBLAST, KAZAKHSTAN
KARIMAN STRUCTURE ON
MIDDLE TRIASSIC T2B
JAN. 2016 JOB No. 6144 FIGURE No. 1d
160
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Loc.8
K3ST2
K124
K13
Loc.1
K123
Loc.6
Loc.3
Loc.2
Loc.5
LEGEND
FAULT LINES
FIELD BOUNDARY
## STRUCTURAL ELEVATION (sL)- m
PROPOSED LOCATIONS
WELL OF INTEREST
PROVED RESERVES
PROBABLE RESERVES
Emir
POSSIBLE RESERVES
Borly
Aksaz MIE HOLDINGS CORPORATION
Yessen
Dolinnoe KARIMAN FIELD
North ADEK BLOCK (LICENSE AREA)
Kariman MANGISTAU OBLAST, KAZAKHSTAN
KARIMAN STRUCTURE ON
MIDDLE TRIASSIC T2C
JAN. 2016 JOB No. 6144 FIGURE No. 1e
161
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APPENDIX I

T2 Upper top

MIE HOLDINGS CORPORATION ADEK BLOCK OIL WELL LOG ANALYSIS MANGISTAU OBLAST, KAZAKHSTAN KARIMAN 1 UPPER TRIASSIC T3, MIDDLE TRIASSIC T2 UPPER JAN. 2016 JOB No. 6144 FIGURE No. 2a 162

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MIE HOLDINGS CORPORATION ADEK BLOCK OIL WELL LOG ANALYSIS MANGISTAU OBLAST, KAZAKHSTAN KARIMAN-1 ST2 UPPER TRIASSIC T3 JAN. 2016 JOB No. 6144 FIGURE No. 2b

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MIE HOLDINGS CORPORATION ADEK BLOCK OIL WELL LOG ANALYSIS MANGISTAU OBLAST, KAZAKHSTAN KARIMAN-1 ST2 MIDDLE TRIASSIC T2 JAN. 2016 JOB No. 6144 FIGURE No. 2c

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APPENDIX I

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MIE HOLDINGS CORPORATION ADEK BLOCK OIL WELL LOG ANALYSIS MANGISTAU OBLAST, KAZAKHSTAN KARIMAN 2 UPPER TRIASSIC T3 JAN. 2016 JOB No. 6144 FIGURE No. 2d

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MIE HOLDINGS CORPORATION ADEK BLOCK OIL WELL LOG ANALYSIS MANGISTAU OBLAST, KAZAKHSTAN KARIMAN 2 MIDDLE TRIASSIC T2 JAN. 2016 JOB No. 6144 FIGURE No. 2e

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KARIMAN 3ST2
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MIE HOLDINGS CORPORATION ADEK BLOCK OIL WELL LOG ANALYSIS MANGISTAU OBLAST, KAZAKHSTAN KARIMAN 3ST2 MIDDLE TRIASSIC T2 JAN. 2016 JOB No. 6144 FIGURE No. 2f 167

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MIE HOLDINGS CORPORATION ADEK BLOCK OIL WELL LOG ANALYSIS MANGISTAU OBLAST, KAZAKHSTAN KARIMAN 4 MIDDLE TRIASSIC T2 JAN. 2016 JOB No. 6144 FIGURE No. 2g

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APPENDIX I

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MIE HOLDINGS CORPORATION ADEK BLOCK OIL WELL LOG ANALYSIS MANGISTAU OBLAST, KAZAKHSTAN KARIMAN 5 UPPER TRIASSIC T3 JAN. 2016 JOB No. 6144 FIGURE No. 2h 169

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MIE HOLDINGS CORPORATION ADEK BLOCK OIL WELL LOG ANALYSIS MANGISTAU OBLAST, KAZAKHSTAN KARIMAN 5 MIDDLE TRIASSIC T2 JAN. 2016 JOB No. 6144 FIGURE No. 2i 170

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MIE HOLDINGS CORPORATION ADEK BLOCK OIL WELL LOG ANALYSIS MANGISTAU OBLAST, KAZAKHSTAN KARIMAN 6 MIDDLE TRIASSIC T2 JAN. 2016 JOB No. 6144 FIGURE No. 2j 171

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MIE HOLDINGS CORPORATION ADEK BLOCK OIL WELL LOG ANALYSIS MANGISTAU OBLAST, KAZAKHSTAN KARIMAN 6ST3 UPPER TRIASSIC T3 JAN. 2016 JOB No. 6144 FIGURE No. 2k

172

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MIE HOLDINGS CORPORATION
ADEK BLOCK
OIL WELL LOG ANALYSIS
MANGISTAU OBLAST, KAZAKHSTAN
KARIMAN 6ST3
MIDDLE TRIASSIC T2
JAN. 2016 JOB No. 6144 FIGURE No. 2l
173
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MIE HOLDINGS CORPORATION ADEK BLOCK OIL WELL LOG ANALYSIS MANGISTAU OBLAST, KAZAKHSTAN KARIMAN 7 MIDDLE TRIASSIC T2 JAN. 2016 JOB No. 6144 FIGURE No. 2m 174

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MIE HOLDINGS CORPORATION ADEK BLOCK OIL WELL LOG ANALYSIS MANGISTAU OBLAST, KAZAKHSTAN KARIMAN 8 UPPER TRIASSIC T3 JAN. 2016 JOB No. 6144 FIGURE No. 2n 175

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APPENDIX I

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MIE HOLDINGS CORPORATION ADEK BLOCK OIL WELL LOG ANALYSIS MANGISTAU OBLAST, KAZAKHSTAN KARIMAN 8 MIDDLE TRIASSIC T2 JAN. 2016 JOB No. 6144 FIGURE No. 2o

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MIE HOLDINGS CORPORATION ADEK BLOCK OIL WELL LOG ANALYSIS MANGISTAU OBLAST, KAZAKHSTAN KARIMAN 10 UPPER TRIASSIC T3 JAN. 2016 JOB No. 6144 FIGURE No. 2p 177

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APPENDIX I

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MIE HOLDINGS CORPORATION ADEK BLOCK OIL WELL LOG ANALYSIS MANGISTAU OBLAST, KAZAKHSTAN KARIMAN 10 MIDDLE TRIASSIC T2 JAN. 2016 JOB No. 6144 FIGURE No. 2q 178

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MIE HOLDINGS CORPORATION ADEK BLOCK OIL WELL LOG ANALYSIS MANGISTAU OBLAST, KAZAKHSTAN KARIMAN 11 MIDDLE TRIASSIC T2 JAN. 2016 JOB No. 6144 FIGURE No. 2r

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T3 @ 3029 m
Upper top
T2C top MIE HOLDINGS CORPORATION
ADEK BLOCK
OIL WELL LOG ANALYSIS
MANGISTAU OBLAST, KAZAKHSTAN
KARIMAN 12
MIDDLE TRIASSIC T2
JAN. 2016 JOB No. 6144 FIGURE No. 2s
180
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T2 Upper top
----- End of picture text -----

MIE HOLDINGS CORPORATION ADEK BLOCK OIL WELL LOG ANALYSIS MANGISTAU OBLAST, KAZAKHSTAN KARIMAN 113 MIDDLE TRIASSIC T2 JAN. 2016 JOB No. 6144 FIGURE No. 2t 181

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MIE HOLDINGS CORPORATION ADEK BLOCK OIL WELL LOG ANALYSIS MANGISTAU OBLAST, KAZAKHSTAN KARIMAN 114 MIDDLE TRIASSIC T2 JAN. 2016 JOB No. 6144 FIGURE No. 2u

182

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MIE HOLDINGS CORPORATION ADEK BLOCK OIL WELL LOG ANALYSIS MANGISTAU OBLAST, KAZAKHSTAN KARIMAN 116 UPPER TRIASSIC T3 JAN. 2016 JOB No. 6144 FIGURE No. 2v 183

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MIE HOLDINGS CORPORATION

ADEK BLOCK OIL WELL LOG ANALYSIS MANGISTAU OBLAST, KAZAKHSTAN KARIMAN 116 MIDDLE TRIASSIC T2 JAN. 2016 JOB No. 6144 FIGURE No. 2w

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MIE HOLDINGS CORPORATION ADEK BLOCK OIL WELL LOG ANALYSIS MANGISTAU OBLAST, KAZAKHSTAN KARIMAN 117 MIDDLE TRIASSIC T2 JAN. 2016 JOB No. 6144 FIGURE No. 2x

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MIE HOLDINGS CORPORATION ADEK BLOCK OIL WELL LOG ANALYSIS MANGISTAU OBLAST, KAZAKHSTAN KARIMAN 118 UPPER TRIASSIC T3 JAN. 2016 JOB No. 6144 FIGURE No. 2y 186

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T2B top
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MIE HOLDINGS CORPORATION
ADEK BLOCK
OIL WELL LOG ANALYSIS
MANGISTAU OBLAST, KAZAKHSTAN
KARIMAN 118
MIDDLE TRIASSIC T2
JAN. 2016 JOB No. 6144 FIGURE No. 2z
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MIE HOLDINGS CORPORATION ADEK BLOCK OIL WELL LOG ANALYSIS MANGISTAU OBLAST, KAZAKHSTAN KARIMAN 119 UPPER TRIASSIC T3 JAN. 2016 JOB No. 6144 FIGURE No. 2aa 188

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MIE HOLDINGS CORPORATION
ADEK BLOCK
OIL WELL LOG ANALYSIS
MANGISTAU OBLAST, KAZAKHSTAN
KARIMAN 119
MIDDLE TRIASSIC T2
JAN. 2016 JOB No. 6144 FIGURE No. 2ab
189
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APPENDIX I

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MIE HOLDINGS CORPORATION ADEK BLOCK OIL WELL LOG ANALYSIS MANGISTAU OBLAST, KAZAKHSTAN KARIMAN 120 MIDDLE TRIASSIC T2 JAN. 2016 JOB No. 6144 FIGURE No. 2ac 190

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Upper Top
----- End of picture text -----

MIE HOLDINGS CORPORATION ADEK BLOCK OIL WELL LOG ANALYSIS MANGISTAU OBLAST, KAZAKHSTAN KARIMAN 121 MIDDLE TRIASSIC T2 JAN. 2016 JOB No. 6144 FIGURE No. 2ad 191

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MIE HOLDINGS CORPORATION ADEK BLOCK OIL WELL LOG ANALYSIS MANGISTAU OBLAST, KAZAKHSTAN KARIMAN 124 MIDDLE TRIASSIC T2 JAN. 2016 JOB No. 6144 FIGURE No. 2ae 192

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Loc.2 Loc.3
Loc.4
Loc.8 Loc.1 Loc.5
Loc.6
Loc.7
LEGEND
FAULT LINES
FIELD BOUNDARY
## STRUCTURAL ELEVATION (sL)- m
PROPOSED LOCATIONS
WELL OF INTEREST
PROVED RESERVES
Emir PROBABLE RESERVES
POSSIBLE RESERVES
BORLY
Aksaz MIE HOLDINGS CORPORATION
Yessen
Dolinnoe
BORLY FIELD
North
Kariman ADEK BLOCK (LICENSE AREA)
MANGISTAU OBLAST, KAZAKHSTAN
Kariman
STRUCTURE ON MIDDLE TRIASSIC T2 UPPER
JAN. 2016 JOB No. 6144 FIGURE No. 1a
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Loc.2
Loc.3
Loc.4
Loc.8 Loc.1 Loc.5
Loc.6
Loc.7
LEGEND
FAULT LINES
FIELD BOUNDARY
## STRUCTURAL ELEVATION (sL)- m
PROPOSED LOCATIONS
WELL OF INTEREST
PROVED RESERVES
Emir PROBABLE RESERVES
POSSIBLE RESERVES
BORLY
Aksaz
Yessen
Dolinnoe
BORLY FIELD
North
Kariman ADEK BLOCK (LICENSE AREA)
MANGISTAU OBLAST, KAZAKHSTAN
Kariman
JAN. 2016 JOB No. 6144
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MIE HOLDINGS CORPORATION
BORLY FIELD
ADEK BLOCK (LICENSE AREA)
MANGISTAU OBLAST, KAZAKHSTAN
STRUCTURE ON MIDDLE TRIASSIC T2A
JAN. 2016 JOB No. 6144 FIGURE No. 1b
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Loc.2 Loc.3
Loc.4
Loc.8 Loc.1 Loc.5
Loc.6
Loc.7
LEGEND
FAULT LINES
FIELD BOUNDARY
## STRUCTURAL ELEVATION (sL)- m
PROPOSED LOCATIONS
WELL OF INTEREST
PROVED RESERVES
Emir
PROBABLE RESERVES
POSSIBLE RESERVES
BORLY
Aksaz MIE HOLDINGS CORPORATION
Yessen
Dolinnoe
BORLY FIELD
North
Kariman ADEK BLOCK (LICENSE AREA)
MANGISTAU OBLAST, KAZAKHSTAN
Kariman
STRUCTURE ON MIDDLE TRIASSIC T2B
JAN. 2016 JOB No. 6144 FIGURE No. 1c
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Loc.2 Loc.3
Loc.4
Loc.8 Loc.1 Loc.5
Loc.6
Loc.7
LEGEND
FAULT LINES
FIELD BOUNDARY
## STRUCTURAL ELEVATION (sL)- m
PROPOSED LOCATIONS
WELL OF INTEREST
PROVED RESERVES
Emir
PROBABLE RESERVES
POSSIBLE RESERVES
BORLY
Aksaz MIE HOLDINGS CORPORATION
Yessen
Dolinnoe
BORLY FIELD
North
Kariman ADEK BLOCK (LICENSE AREA)
MANGISTAU OBLAST, KAZAKHSTAN
Kariman
STRUCTURE ON MIDDLE TRIASSIC T2C
JAN. 2016 JOB No. 6144 FIGURE No. 1d
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Loc.2 Loc.3
Loc.4
Loc.1
Loc.8
Loc.5
Loc.6
Loc.7
LEGEND
FAULT LINES
FIELD BOUNDARY
## STRUCTURAL ELEVATION (sL)- m
PROPOSED LOCATIONS
WELL OF INTEREST
PROVED RESERVES
Emir
PROBABLE RESERVES
POSSIBLE RESERVES
BORLY
Aksaz MIE HOLDINGS CORPORATION
Yessen
Dolinnoe
BORLY FIELD
North
Kariman ADEK BLOCK (LICENSE AREA)
MANGISTAU OBLAST, KAZAKHSTAN
Kariman
STRUCTURE ON LOWER TRIASSIC T1
JAN. 2016 JOB No. 6144
234
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MIE HOLDINGS CORPORATION
BORLY FIELD
ADEK BLOCK (LICENSE AREA)
MANGISTAU OBLAST, KAZAKHSTAN
STRUCTURE ON LOWER TRIASSIC T1
JAN. 2016 JOB No. 6144 FIGURE No. 1e
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Upper top
top
MIE HOLDINGS CORPORATION
ADEK BLOCK
OIL WELL LOG ANALYSIS
MANGISTAU OBLAST, KAZAKHSTAN
BORLY-2ST1
MIDDLE TRIASSIC T2 & LOWER TRIASSIC T1
JAN. 2016 JOB No. 6144 FIGURE No. 2a
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Loc.1
Loc.2
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LEGEND
FAULT LINES
FIELD BOUNDARY
## STRUCTURAL ELEVATION (sL)- m
PROPOSED LOCATIONS
WELL OF INTEREST
PROVED RESERVES
Emir PROBABLE RESERVES
POSSIBLE RESERVES
Borly
Aksaz MIE HOLDINGS CORPORATION
Yessen
Dolinnoe
NORTH KARIMAN FIELD
NORTH
KARIMAN ADEK BLOCK (LICENSE AREA)
MANGISTAU OBLAST, KAZAKHSTAN
Kariman
STRUCTURE ON MIDDLE TRIASSIC T2A
JAN. 2016 JOB No. 6144 FIGURE No. 1a
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Loc.1
NK1
Loc.2
LEGEND
FAULT LINES
FIELD BOUNDARY
## STRUCTURAL ELEVATION (sL)- m
PROPOSED LOCATIONS
WELL OF INTEREST
PROVED RESERVES
Emir PROBABLE RESERVES
POSSIBLE RESERVES
Borly
Aksaz MIE HOLDINGS CORPORATION
Yessen
Dolinnoe
NORTH KARIMAN FIELD
NORTH
KARIMAN ADEK BLOCK (LICENSE AREA)
MANGISTAU OBLAST, KAZAKHSTAN
Kariman
STRUCTURE ON MIDDLE TRIASSIC T2B
JAN. 2016 JOB No. 6144 FIGURE No. 1b
250
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APPENDIX I

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Loc.1
Loc.2
LEGEND
FAULT LINES
FIELD BOUNDARY
## STRUCTURAL ELEVATION (sL)- m
PROPOSED LOCATIONS
WELL OF INTEREST
PROVED RESERVES
Emir PROBABLE RESERVES
POSSIBLE RESERVES
Borly
Aksaz MIE HOLDINGS CORPORATION
Yessen
Dolinnoe
NORTH KARIMAN FIELD
NORTH
KARIMAN ADEK BLOCK (LICENSE AREA)
MANGISTAU OBLAST, KAZAKHSTAN
Kariman
STRUCTURE ON MIDDLE TRIASSIC T2C
JAN. 2016 JOB No. 6144 FIGURE No. 1c
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NORTH KARIMAN 1ST
252
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MIE HOLDINGS CORPORATION ADEK BLOCK OIL WELL LOG ANALYSIS MANGISTAU OBLAST, KAZAKHSTAN NORTH KARIMAN-1ST MIDDLE TRIASSIC T2 JAN. 2016 JOB No. 6144 FIGURE No. 2a

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MIE HOLDINGS CORPORATION ADEK BLOCK OIL WELL LOG ANALYSIS MANGISTAU OBLAST, KAZAKHSTAN NORTH KARIMAN-2 MIDDLE TRIASSIC T2 JAN. 2016 JOB No. 6144 FIGURE No. 2b 253

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Loc.1
Y2
5
1
Loc.2
Loc.6
Loc.3
Loc.4
Loc.5
LEGEND
FAULT LINES
FIELD BOUNDARY
## STRUCTURAL ELEVATION (sL)- m
PROPOSED LOCATIONS
WELL OF INTEREST
PROVED RESERVES
Emir PROBABLE RESERVES
POSSIBLE RESERVES
Borly
Aksaz MIE HOLDINGS CORPORATION
YESSEN
Dolinnoe
YESSEN FIELD
North
Kariman ADEK BLOCK (LICENSE AREA)
MANGISTAU OBLAST, KAZAKHSTAN
Kariman
STRUCTURE ON MIDDLE TRIASSIC T2 UPPER
JAN. 2016 JOB No. 6144 FIGURE No. 1a
270
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Loc.1
Y2
5
1
Loc.2
Loc.6
Loc.3
Loc.4
Loc.5
LEGEND
FAULT LINES
FIELD BOUNDARY
## STRUCTURAL ELEVATION (sL)- m
PROPOSED LOCATIONS
WELL OF INTEREST
PROVED RESERVES
PROBABLE RESERVES
Emir
POSSIBLE RESERVES
Borly
Aksaz MIE HOLDINGS CORPORATION
YESSEN
Dolinnoe
YESSEN FIELD
North
Kariman ADEK BLOCK (LICENSE AREA)
MANGISTAU OBLAST, KAZAKHSTAN
Kariman
STRUCTURE ON MIDDLE TRIASSIC T2A
JAN. 2016 JOB No. 6144 FIGURE No. 1b
271
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Loc.1
Y2
5
1
Loc.2
Loc.6
Loc.3
Loc.4
Loc.5
LEGEND
FAULT LINES
FIELD BOUNDARY
## STRUCTURAL ELEVATION (sL)- m
PROPOSED LOCATIONS
WELL OF INTEREST
PROVED RESERVES
Emir PROBABLE RESERVES
POSSIBLE RESERVES
Borly
Aksaz MIE HOLDINGS CORPORATION
YESSEN
Dolinnoe
YESSEN FIELD
North
Kariman ADEK BLOCK (LICENSE AREA)
MANGISTAU OBLAST, KAZAKHSTAN
Kariman
STRUCTURE ON MIDDLE TRIASSIC T2B
JAN. 2016 JOB No. 6144 FIGURE No. 1c
272
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Loc.1
Y2
5
1
Loc.2
Loc.6
Loc.3
Loc.4
Loc.5
LEGEND
FAULT LINES
FIELD BOUNDARY
## STRUCTURAL ELEVATION (sL)- m
PROPOSED LOCATIONS
WELL OF INTEREST
PROVED RESERVES
Emir PROBABLE RESERVES
POSSIBLE RESERVES
Borly
Aksaz MIE HOLDINGS CORPORATION
YESSEN
Dolinnoe
YESSEN FIELD
North
Kariman ADEK BLOCK (LICENSE AREA)
MANGISTAU OBLAST, KAZAKHSTAN
Kariman
STRUCTURE ON MIDDLE TRIASSIC T2C
JAN. 2016 JOB No. 6144 FIGURE No. 1d
273
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Loc.1
Y2
5
1
Loc.2
Loc.6
Loc.3
Loc.4
Loc.5
LEGEND
FAULT LINES
FIELD BOUNDARY
## STRUCTURAL ELEVATION (sL)- m
PROPOSED LOCATIONS
WELL OF INTEREST
PROVED RESERVES
PROBABLE RESERVES
Emir
POSSIBLE RESERVES
Borly
Aksaz MIE HOLDINGS CORPORATION
YESSEN
Dolinnoe
YESSEN FIELD
North
Kariman ADEK BLOCK (LICENSE AREA)
MANGISTAU OBLAST, KAZAKHSTAN
Kariman
STRUCTURE ON LOWER TRIASSIC T1
JAN. 2016 JOB No. 6144 FIGURE No. 1e
274
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YESSEN-1
Yessen-1
Yessen
YESSEN-1
Upper top
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MIE HOLDINGS CORPORATION ADEK BLOCK OIL WELL LOG ANALYSIS MANGISTAU OBLAST, KAZAKHSTAN YESSEN-1 MIDDLE TRIASSIC T2 UPPER JAN. 2016 JOB No. 6144 FIGURE No. 2a 275

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APPENDIX I

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YESSEN-1
Yessen-1
Yessen
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MIE HOLDINGS CORPORATION
ADEK BLOCK
OIL WELL LOG ANALYSIS
MANGISTAU OBLAST, KAZAKHSTAN
YESSEN-1
MIDDLE TRIASSIC T2 & LOWER TRIASSIC T1
JAN. 2016 JOB No. 6144 FIGURE No. 2b
276
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YESSEN-2
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MIE HOLDINGS CORPORATION
ADEK BLOCK
OIL WELL LOG ANALYSIS
MANGISTAU OBLAST, KAZAKHSTAN
YESSEN-2
MIDDLE TRIASSIC T2 UPPER & T2A
JAN. 2016 JOB No. 6144 FIGURE No. 2c
277
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APPENDIX I

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YESSEN-2
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MIE HOLDINGS CORPORATION ADEK BLOCK OIL WELL LOG ANALYSIS MANGISTAU OBLAST, KAZAKHSTAN YESSEN-2 MIDDLE TRIASSIC T2B & T2C JAN. 2016 JOB No. 6144 FIGURE No. 2d 278

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Russia Qostanay Kokchetav Russia
Astana
Oral
Aqtobe KAZAKHSTAN
Atyrau
China
ADEK BLOCK
Aral
Sea
Aktau
AKTAU
Caspian Sea Uzbekistan
Kyrgyzstan
Azerbaijan Turkmenistan
51°15’ 51°20’ 51°25’ 51°30’ 51°35’ 51°40’ 51°45’ 51°50’
44°00’
43°55’
AIDAI AD-A2 EMIR
AD-A1 ADEK BLOCK
WEST AKSAZ BORLY
NORTHWEST BLOCK
DOLINNOE
43°50’
43°45’
KARIMAN
43°40’
LEGEND MIE HOLDINGS CORPORATION
AREA OF INTEREST
COMPANY LANDS ADEK & NORTHWEST BLOCKS
AREAS OF ASSIGNED RESOURCES MANGISTAU OBLAST, KAZAKHSTAN
ORIENTATION MAP
JAN. 2016 JOB No. 6144 FIGURE No. 1
298
BEGESH
EAST SAURA
TANIRBERGEN
Irtysh
Volga
Ural
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APPENDIX I

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----- Start of picture text -----

Loc.1
Loc.4
Loc.3
Loc.2
m
LEGEND
FAULT LINES
FIELD BOUNDARY
## STRUCTURAL ELEVATION (sL)- m
PROPOSED LOCATIONS
WELL OF INTEREST
PROVED RESERVES
PROBABLE RESERVES
Emir POSSIBLE RESERVES
RESOURCES
Borly
AKSAZ MIE HOLDINGS CORPORATION
Yessen
Dolinnoe
AKSAZ FIELD
North
Kariman ADEK BLOCK (LICENSE AREA)
MANGISTAU OBLAST, KAZAKHSTAN
Kariman
STRUCTURE ON MIDDLE TRIASSIC T2C
JAN. 2016 JOB No. 6144 FIGURE No. 2a
299
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APPENDIX I

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----- Start of picture text -----

Emir PROBABLE RESERVES
POSSIBLE RESERVES
RESOURCES
BORLY
Aksaz Yessen MIE HOLDINGS CORPORATION
Dolinnoe
BORLY FIELD
North
Kariman
ADEK BLOCK (LICENSE AREA)
Kariman MANGISTAU OBLAST, KAZAKHSTAN
STRUCTURE ON MIDDLE TRIASSIC T2A
JAN. 2016 JOB No. 6144 FIGURE No. 2b
300
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APPENDIX I

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Loc.
Loc.
Loc.1
Loc.
Loc.
Loc.2
Loc.3
Loc.
Loc.
Loc.
D12ST
Loc.
m LEGEND
FAULT LINES
FIELD BOUNDARY
## STRUCTURAL ELEVATION (sL)- m
PROPOSED LOCATIONS
WELL OF INTEREST
PROVED RESERVES
PROBABLE RESERVES
Emir
POSSIBLE RESERVES
RESOURCES
Borly
Aksaz MIE HOLDINGS CORPORATION
Yessen
DOLINNOE
DOLINNOE FIELD
North
Kariman ADEK BLOCK (LICENSE AREA)
MANGISTAU OBLAST, KAZAKHSTAN
Kariman
STRUCTURE ON MIDDLE TRIASSIC T2B
JAN. 2016 JOB No. 6144 FIGURE No. 2c
301
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APPENDIX I

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Loc.2
E5
1
Loc.1
m
LEGEND
FAULT LINES
FIELD BOUNDARY
## STRUCTURAL ELEVATION (sL)- m
PROPOSED LOCATIONS
WELL OF INTEREST
PROVED RESERVES
PROBABLE RESERVES
EMIR
POSSIBLE RESERVES
RESOURCES
Borly
Aksaz MIE HOLDINGS CORPORATION
Yessen
Dolinnoe
EMIR FIELD
North
Kariman ADEK BLOCK (LICENSE AREA)
MANGISTAU OBLAST, KAZAKHSTAN
Kariman
STRUCTURE ON MIDDLE TRIASSIC T2A
JAN. 2016 JOB No. 6144 FIGURE No. 2d
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APPENDIX I

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Loc.8
K3ST2
K124
K13
K123 Loc.1
Loc.3
Loc.6
Loc.2
Loc.5
m LEGEND
FAULT LINES
FIELD BOUNDARY
## STRUCTURAL ELEVATION (sL)- m
PROPOSED LOCATIONS
WELL OF INTEREST
PROVED RESERVES
PROBABLE RESERVES
Emir POSSIBLE RESERVES
RESOURCES
Borly
Aksaz MIE HOLDINGS CORPORATION
Yessen
Dolinnoe KARIMAN FIELD
North ADEK BLOCK (LICENSE AREA)
Kariman MANGISTAU OBLAST, KAZAKHSTAN
KARIMAN STRUCTURE ON
MIDDLE TRIASSIC T2B
JAN. 2016 JOB No. 6144 FIGURE No. 2e
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LEGEND
FAULT LINES
BEGESH FIELD BOUNDARY
## STRUCTURAL ELEVATION (sL)- m
East Saura RESOURCES
Emir
Aidai
Borly
Aksaz MIE HOLDINGS CORPORATION
Yessen
Tanirbergen
Dolinnoe
BEGESH PROSPECT
North
Kariman ADEK BLOCK (LICENSE AREA)
MANGISTAU OBLAST, KAZAKHSTAN
Kariman
STRUCTURE ON MIDDLE TRIASSIC T2A
JAN. 2016 JOB No. 6144 FIGURE No. 2f
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LEGEND
FAULT LINES
Begesh FIELD BOUNDARY
## STRUCTURAL ELEVATION (sL)- m
East Saura RESOURCES
Emir
Aidai
Borly
Aksaz MIE HOLDINGS CORPORATION
Yessen
TANIRBERGEN
Dolinnoe
TANIRBERGEN PROSPECT
North
Kariman ADEK BLOCK (LICENSE AREA)
MANGISTAU OBLAST, KAZAKHSTAN
Kariman
STRUCTURE ON MIDDLE TRIASSIC T2A
JAN. 2016 JOB No. 6144 FIGURE No. 2i
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APPENDIX I

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Section
Period (System) Century (horizon)
Age
Quaternary O 0.7
Pilocene N,
Neon N 22
Myosin N1
Oligocene P3 [h]
65 P3 P3 [r]
P3 [p]
Palaeocene P 41 Eocen e P2 P2 [I]
P2 [i]
Palaeocene P1 [t]
P1 P1 [m]
K2d
K2m
K2km
Higher K2st
K2k
K2t
Cretacious K 70 K2s
K1al
K1a
Lower K1br
K1g
K y
K1b
J3tt
J3V
Upper J3km
70 J3O
J3K
Jurassic J 55-60 J2bt
Middle J2b
J2a
J1t
Lower J1p
J1s
J1g
T3r
Upper T3n
T3k
Triassic T 40-45 Middle T2l ZONE OF INTEREST
T2a
Lower T1o
T1i
P2t
Upper P2kz
P2u
Permian P 50-60 P1k
Lower P1ar
P1s
P1a
Upper CC33gk
Middle C2m
Carbonniferous C 50-60 C2b
C1s
Lower C1v
C1t
Upper DD3fm3f
Middle D2gv
Devonian D 60 D2ef
D1e
170 Lower D1z
D1z
S2d
Upper S2p
Silurian S 25-30 S2ld
Lower S1v
S1l
Upper O2as MIE HOLDINGS CORPORATION
O2-3k
Ordovician O 45-50 Middle O2ld
Lower OO12al ADEK & NORTHWEST BLOCKS
C O3 [ak] 1t MANGISTAU OBLAST, KAZAKHSTAN
Upper C 2 [s]
C 3 [as] GEOLOGICAL
Cambrian C 90-100 Middle CC 22 [am][m] STRATIGRAPHIC CHART
Lower C 1 [l]
C 1 [a]
A R- V JAN. 2016 JOB No. 6144 FIGURE No. 2j
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Eon (Ecotopic) Era (eratopic) Duration, million years Duration, million years Tectonic Era
Cenozoic KZ
Neocomian
Mesozoic
Fanerosozoic
Paleozoic
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Section
Period (System) Century (horizon)
Age
Quaternary O 0.7
Pilocene N,
Neon N 22
Myosin N1
Oligocene P3 [h]
65 P3 P3 [r]
P3 [p]
Palaeocene P 41 Eocen e P2 P2 [I]
P2 [i]
Palaeocene P1 [t]
P1 P1 [m]
K2d
K2m
K2km
Higher K2st
K2k
K2t
Cretacious K 70 K2s
K1al
K1a
Lower K1br
K1g
K y
K1b
J3tt
J3V
Upper J3km
70 J3O
J3K
Jurassic J 55-60 J2bt
Middle J2b
J2a
J1t
Lower J1p
J1s
J1g
T3r
Upper T3n
T3k
Triassic T 40-45 Middle T2l ZONE OF INTEREST
T2a
Lower T1o
T1i
P2t
Upper P2kz
P2u
Permian P 50-60 P1k
Lower P1ar
P1s
P1a
Upper CC33gk
Middle C2m
Carbonniferous C 50-60 C2b
C1s
Lower C1v
C1t
Upper DD3fm3f
Middle D2gv
Devonian D 60 D2ef
D1e
170 Lower D1z
D1z
S2d
Upper S2p
Silurian S 25-30 S2ld
Lower S1v
S1l
Upper O2as MIE HOLDINGS CORPORATION
O2-3k
Ordovician O 45-50 Middle O2ld
Lower OO12al ADEK & NORTHWEST BLOCKS
C O3 [ak] 1t MANGISTAU OBLAST, KAZAKHSTAN
Upper C 2 [s]
C 3 [as] GEOLOGICAL
Cambrian C 90-100 Middle CC 22 [am][m] STRATIGRAPHIC CHART
Lower C 1 [l]
C 1 [a]
A R- V JAN. 2016 JOB No. 6144 FIGURE No. 2j
308
Eon (Ecotopic) Era (eratopic) Duration, million years Duration, million years Tectonic Era
Cenozoic KZ
Neocomian
Mesozoic
Fanerosozoic
Paleozoic
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FINANCIAL INFORMATION OF THE GROUP

APPENDIX II

1. STATEMENT OF INDEBTEDNESS

At the close of March 31, 2016, the Group had outstanding borrowings of approximately RMB4,964.1 million, comprising secured bank loans of approximately RMB552.6 million and interest bearing notes carrying at a book value of RMB4,411.5 million.

The bank loans totalling RMB121.0 million are secured by the Group’s right to receive revenue allocated to the Group under Daan Production Sharing Contract (‘‘PSC’’) in the Daan oilfield located in Northeast region in the PRC during respective loan agreement periods. The Group’s remaining bank loans totalling RMB431.6 million were secured by the Group’s bank deposits of approximately RMB463.0 million.

As at March 31, 2016, the Group had no material contingent liabilities or guarantees.

Save as aforesaid or otherwise disclosed herein, and apart from intra-group liabilities and normal trade payables in the normal course of business, at the close of business on March 31, 2016, the Group did not have any other loan capital issued and outstanding or agreed to be issued, bank overdrafts, loans or other similar indebtedness, liabilities under acceptances or acceptable credits, debentures, mortgages, charges, finance lease commitments, guarantees or other contingent liabilities.

2. WORKING CAPITAL STATEMENT

The Directors are of the opinion that, after taking into account the available financial resources, including internally generally funds, the available loan facilities and the estimated net proceeds from the Disposal, the Group will have sufficient working capital for its business for the next twelve months from the date of this circular in the absence of unforeseen circumstances.

3. FINANCIAL AND TRADING PROSPECTS OF THE GROUP

A race to pump by OPEC crude producers, US shale and Non-OPEC suppliers created an unprecedented global glut that drove oil prices to a second year of steep declines since 2014. While producers have been responding to the low price environment with various measures, the macro fundamentals appear to have carried forward into 2016 and crude oil prices are likely to remain volatile in the near term. When operating under such challenging macro environment, the Group focuses on the ability to react promptly to these drastic changes with flexibility. In 2015, the Group continued to adapt and rebalance in response to the lower commodity prices by way of managing and lowering our operating and administrative costs, while maintaining safe and reliable operations. Capital investments were significantly lowered and we expect further reductions in 2016 as we place liquidity as our top priority.

– II-1 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX II

Accordingly, while the Group continue to closely monitor the development of global oil & gas market and keep abreast of attractive assets that would fit well with the Group’s long term development and growth, for 2016 we shall maintain a strategy of reduced Capex, minimal drilling and work programs, as well as focusing on operational efficiency and cost reduction. We plan to drill 23 gross wells, with total budgeted Capex and cash-call approximating US$55 million. The expected net oil production is 9,240 to 10,540 barrels/day and the expected net gas production is 11,100 to 12,100 MSCF/day.

– II-2 –

GENERAL INFORMATION

APPENDIX III

1. RESPONSIBILITY STATEMENT

This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief the information contained in this circular is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this circular misleading.

2. DISCLOSURE OF INTERESTS

(a) Directors’ and Chief Executive’s Interests in Shares and Underlying Shares

As at the Latest Practicable Date, the interests or short positions of the Directors and chief executive of the Company in the Shares, underlying shares and debentures (if any) of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) as required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which they were taken or deemed to have under such provisions of the SFO), as recorded in the register maintained by the Company pursuant to section 352 of the SFO or as otherwise notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers (the ‘‘Model Code’’) were as follows:

Interests and short positions in the shares, underlying shares and debentures of the Company or its associated corporations

		Number of	Approximate
		shares/	percentage of
	Capacity/	underlying	interest in the
Name of Director	Nature of interest	shares interested	corporation
Mr. Zhang Ruilin	Beneficial interest	5,087,000 (L)Note 1	0.17%
	Family interest/interest	1,626,455,234 (L)Notes 3 and 5	55.35%
	of controlled
	corporation
	Parties acting in concert	7,287,000 (L)Notes 3 and 5	0.25%
		211,855,234 (S)Notes 4 and 5	7.21%
Mr. Zhao Jiangwei	Beneficial interest	7,287,000 (L)Note 2	0.25%
	Family interest/interest	1,626,455,234 (L)Notes 3 and 5	55.35%
	of controlled
	corporation
	Parties acting in concert	5,087,000 (L)Notes 3 and 5	0.17%
		211,855,234 (S)Notes 4 and 5	7.21%
Mr. Mei Jianping	Beneficial interest	1,267,933 (L)Note 6	0.04%
Mr. Jeffrey Willard Miller	Beneficial interest	1,811,333 (L)Note 7	0.06%
Mr. Andrew Sherwood	Beneficial interest	3,441,000 (L)Note 8	0.12%
Harper

– III-1 –

GENERAL INFORMATION

APPENDIX III

		Number of	Approximate
		shares/	percentage of
	Capacity/	underlying	interest in the
Name of Director	Nature of interest	shares interested	corporation
Mr. Tian Hongtao	Beneficial interest	5,400,000 (L)Note 9	0.18%
Mr. Tao Tak Yin Dexter	Beneficial interest	4,800,000 (L)Note 10	0.16%

Notes:

Mr. Zhang Ruilin beneficially owns 100,000 Shares and is interested in 4,987,000 Shares underlying the share options of the Company granted to him on September 20, 2011 and March 21, 2014, respectively.
Mr. Zhao Jiangwei beneficially owns 1,150,000 Shares and is interested in 6,137,000 Shares underlying the share options and awarded shares of the Company granted to him on September 20, 2011, March 21, 2014 and November 20, 2015, respectively;
Each of Champion International Energy Limited, Orient International Energy Limited, Power International Energy Limited and New Sun International Energy Limited is a wholly-owned subsidiary of Sunrise Glory Holdings Limited, which is in turn wholly-owned by Far East Energy Limited, the ultimate holding company of the Company. Far East Energy Limited owns through each of Champion International Energy Limited, Orient International Energy Limited, Power International Energy Limited and New Sun International Energy Limited, an aggregate of 1,414,600,000 Shares. Far East Energy Limited is held as to 9.99%, 80% and 10% by Mr. Zhang Ruilin, Ms. Zhao Jiangbo and Mr. Zhao Jiangwei, respectively.
As at the Latest Practicable Date, Celestial Energy Limited beneficially holds 211,855,234 Shares. Pursuant to the put and call option agreement dated November 8, 2014 and entered into among Far East Energy Limited, Mr. Zhang Ruilin, Mr. Zhao Jiangwei, Ms. Zhang Jiangbo and Celestial Energy Limited (the ‘‘2014 Option Agreement’’), (i) a put option was granted by Far East Energy Limited to Celestial Energy Limited to sell up to 211,855,234 Shares; and (ii) a call option was granted by Celestial Energy Limited to Far East Energy Limited to purchase up to 84,742,094 Shares, on and subject to the terms and conditions therein. Far East Energy Limited is interested in a long position of 211,855,234 Shares pursuant to the 2014 Option Agreement. Pursuant to its obligation to deliver 211,855,234 Shares under the 2014 Option Agreement, Celestial Energy Limited has a short position of 211,855,234 Shares. As Far East Energy Limited is a party acting in concert with Celestial Energy Limited, it is deemed interested in such short position.
On May 24, 2013, Mr. Zhang Ruilin, Ms. Zhao Jiangbo and Mr. Zhao Jiangwei have entered into an agreement pursuant to which each of them has agreed to act in concert in relation to all matters that require the decisions of the shareholders of Far East Energy Limited (‘‘Acting in Concert Agreement’’). Therefore, by virtue of being party to the Acting In Concert Agreement, Mr. Zhao Jiangwei is deemed to be interested in (a) through the controlling interest of Ms. Zhao Jiangbo in Far East Energy Limited, in the 1,414,600,000 Shares held by Far East Energy Limited through its subsidiaries and the 211,855,234 Shares which Far East Energy Limited is interested pursuant to the 2014 Option Agreement; and (b) the 100,000 Shares beneficially owned by Mr. Zhang Ruilin and the 4,987,000 Shares underlying the share options of the Company granted to Mr. Zhang Ruilin. By virtue of being spouse to Ms. Zhao Jiangbo and party to the Acting in Concert Agreement, Mr. Zhang Ruilin is deemed interested in (a) through the controlling interest of Ms. Zhao Jiangbo in Far East Energy Limited, in the 1,414,600,000 Shares held by Far East Energy Limited through its subsidiaries and the 211,855,234 Shares which Far East Energy Limited is interested pursuant to the 2014 Option Agreement; and (b) the 1,150,000 Shares beneficially owned by Mr. Zhao Jiangwei and the 6,137,000 Shares underlying the share options and awarded shares of the Company granted to Mr. Zhao Jiangwei.

– III-2 –

GENERAL INFORMATION

APPENDIX III

Mr. Mei Jianping is interested in 1,267,933 underlying Shares by virtue of the share option of the Company granted to him on November 23, 2010.
Mr. Jeffrey Willard Miller is interested in 1,811,333 underlying Shares by virtue of the share option of the Company granted to him on November 23, 2010.
Mr. Andrew Sherwood Harper is interested in 3,441,000 underlying Shares by virtue of the share option of the Company granted to him on September 20, 2011 and March 21, 2014, respectively.
Mr. Tian Hongtao is interested in 5,400,000 underlying Shares by virtue of the share option and awarded shares of the Company granted to him on March 21, 2014 and November 20, 2015, respectively.
Mr. Tao Tak Yin Dexter beneficially owns 2,400,000 Shares and is interested in 2,400,000 underlying Shares by virtue of the awarded shares of the Company granted to him on November 20, 2015.
‘‘L’’ denotes long position in the Shares; and ‘‘S’’ denotes short position in the Shares.

(b) Persons who have interests or short positions which are discloseable under Divisions 2 and 3 of Part XV of the SFO

As at the Latest Practicable Date, the following persons, not being a Director or chief executive of the Company, had an interest in the shares and underlying shares of the Company as recorded in the register required to be kept under section 336 of the SFO or as required to be disclosed to the Company and the Stock Exchange under Divisions 2 and 3 of Part XV of the SFO, the details of which are set out below:

Interests and short positions in the shares and underlying shares of the Company

			Approximately
			percentage of
		Number of	interest in the
Name of shareholder	Nature of interest	Shares held	Company
Ms. Zhao Jiangbo	Interest of controlled	1,626,455,234 (L)Notes 1 and 2	55.35%
	corporation
	Family interest	5,087,000 (L)Note 3	0.17%
	Parties acting in concert	7,287,000 (L)Note 3	0.25%
		211,855,234 (S)Note 2	7.21%
Champion International	Beneficial interest	399,070,000 (L)Note 1	13.58%
Energy Limited
Orient International Energy	Beneficial interest	399,070,000 (L)Note 1	13.58%
Limited
Power International Energy	Beneficial interest	141,460,000 (L)Note 1	4.81%
Limited
New Sun International	Beneficial interest	475,000,000 (L)Note 1	16.16%
Energy Limited
Sunrise Glory Holdings	Interest of controlled	1,414,600,000 (L)Note 1	48.14%
Limited	corporation

– III-3 –

GENERAL INFORMATION

APPENDIX III

			Approximately
			percentage of
		Number of	interest in the
Name of shareholder	Nature of interest	Shares held	Company
Far East Energy Limited	Beneficial interest	211,855,234 (L)Note 2	7.21%
	Interest of controlled	1,414,600,000 (L)Note 1	48.14%
	corporation
	Parties acting in concert	12,374,000 (L)Note 4	0.42%
		211,855,234 (S)Note 2	7.21%
Celestial Energy Limited	Beneficial interest	211,855,234 (L)Note 5	7.21%
		211,855,234 (S)Note 2	7.21%
	Parties acting in concert	1,426,974,000 (L)Note 6	48.56%
Mr. Ho Chi Sing	Interest of controlled	211,855,234 (L)Note 5	7.21%
	corporation	211,855,234 (S)Note 2	7.21%
	Parties acting in concert	1,426,974,000 (L)Note 6	48.56%
Citigroup Inc.	Beneficial interest	176,978,724 (L)	6.02%
		50,199,827 (P)	1.71%

Notes:

Each of Champion International Energy Limited, Orient International Energy Limited, Power International Energy Limited and New Sun International Energy Limited is a wholly-owned subsidiary of Sunrise Glory Holdings Limited, which is in turn wholly-owned by Far East Energy Limited, the ultimate holding company of the Company. Far East Energy Limited owns, through each of Champion International Energy Limited, Orient International Energy Limited, Power International Energy Limited and New Sun International Energy Limited, an aggregate of 1,414,600,000 Shares. Far East Energy Limited is held as to 9.99%, 80% and 10% by Mr. Zhang Ruilin, Ms. Zhao Jiangbo and Mr. Zhao Jiangwei, respectively. Ms. Zhao Jiangbo, through her controlling interest in Far East Energy Limited, is deemed to be interested in the 1,414,600,000 Shares held by Far East Energy Limited through its subsidiaries.
Pursuant to the 2014 Option Agreement, (i) a put option was granted by Far East Energy Limited to Celestial Energy Limited to sell up to 211,855,234 Shares; and (ii) a call option was granted by Celestial Energy Limited to Far East Energy Limited to purchase up to 84,742,094 Shares, on and subject to the terms and conditions therein. Far East Energy Limited is interested in a long position of 211,855,234 Shares underlying such options granted under the 2014 Option Agreement. Pursuant to its obligation to deliver 211,855,234 Shares under the 2014 Option Agreement, Celestial Energy Limited has a short position of 211,855,234 Shares. As Far East Energy Limited is a party acting in concert with Celestial Energy Limited, it is deemed interested in such short position of Celestial Energy Limited. By virtue of her controlling interest in Far East Energy Limited, Ms. Zhao Jiangbo is therefore, deemed interested in (a) such long position of 211,855,234 Shares as well as the short position of 211,855,234 Shares of Celestial Energy Limited, in both of which Far East Energy Limited is interested.
As spouse of Mr. Zhang Ruilin, Ms. Zhao Jiangbo is deemed interested in the 100,000 Shares held by Mr. Zhang Ruilin and the 4,987,000 underlying Shares in which Mr. Zhang Ruilin is interested by virtue of the share options of the Company granted to him on September 20, 2011 and March 21, 2014, respectively. As party to the Acting in Concert Agreement with Mr. Zhao Jiangwei, Ms. Zhao Jiangbo is also deemed interested in the 1,150,000 Shares held by Mr. Zhao Jiangwei and the 6,137,000 underlying Shares in which Mr. Zhao Jiangwei is interested by virtue of the share option and awarded shares of the Company granted to him on September 20, 2011, March 21, 2014, and November 20, 2015, respectively.

– III-4 –

GENERAL INFORMATION

APPENDIX III

By virtue of being parties acting in concert with Mr. Zhang Ruilin and Mr. Zhao Jiangwei, Far East Energy Limited is deemed interested in (a) the 100,000 Shares and (by virtue of the share options of the Company granted to Mr. Zhang Ruilin on September 20, 2011 and March 21, 2014, respectively) the 4,987,000 underlying Shares; and (b) the 1,150,000 Shares and (by virtue of the share options and awarded shares of the Company granted to Mr. Zhao Jiangwei on September 20, 2011, March 21, 2014, and November 20, 2015 respectively) the 6,137,000 underlying Shares.
Celestial Energy Limited beneficially owns 211,855,234 Shares. Mr. Ho Chi Sing is the sole shareholder of Celestial Energy Limited and is therefore deemed interested in such Shares held by Celestial Energy Limited.
As party acting in concert with Far East Energy Limited, Celestial Energy Limited is therefore deemed interested a long position of an aggregate of 1,638,829,234 Shares and underlying Shares in which Far East Energy Limited is interested and deemed interested.
‘‘L’’ denotes long position in the Shares; ‘‘S’’ denotes short position in the Shares; and ‘‘P’’ denotes lending pool in the Shares.

Saved as disclosed above, as at the Latest Practicable Date, the Company had not been notified of any other persons (other than the Directors or chief executive of the Company) who had any interest or short position in the shares and underlying shares of the Company as recorded in the register required to be kept under Section 336 of the SFO or as required to be disclosed to the Company and the Stock Exchange under Divisions 2 and 3 of Part XV of the SFO.

Save as disclosed above, as at the Latest Practicable Date, none of the Directors was a director or an employee of a company which had an interest or short position in the shares and underlying shares of the Company would fall to be disclosed to the Company under provisions of Divisions 2 and 3 of Part XV of the SFO.

3. COMPETING INTERESTS

As at the Latest Practicable Date, none of the Directors and their respective associates had any interest in a business, apart from the business of the Company, which competes or may compete with the business of the Company or has any other conflict of interest with the Company which would be required to be disclosed under Rule 8.10 of the Listing Rules.

4. INTEREST IN CONTRACT OR ARRANGEMENT

As at the Latest Practicable Date, none of the Directors and supervisors of the Company had any direct or indirect interest in any contract, transaction or assets which have been acquired or disposed of by, or leased to, or which are proposed to be acquired or disposed of by, or leased to, any member of the Group since December 31, 2015, being the date to which the latest published audited accounts of the Group were made up.

As at the Latest Practicable Date, so far is known to the Directors, none of the Directors and supervisors of the Company was materially interested in any contract or arrangement entered into by the Company or any of its subsidiaries which was subsisting and significant in relation to the business of the Group taken as a whole.

– III-5 –

GENERAL INFORMATION

APPENDIX III

5. SERVICE CONTRACTS OF THE DIRECTORS

On November 20, 2009, Zhang Ruilin and Zhao Jiangwei, each an executive Director, each entered into a service contract with each of the Company and MI Energy Corporation, a wholly-owned subsidiary of the Company (‘‘MIE’’), which is renewable yearly unless terminated (i) with twelve month’s notice by either party, or (ii) by the Company or MIE (as applicable) upon certain events such as the Director having committed serious or persistent breaches of the service contract. Should the Company or MIE (as applicable) terminate the service contract, Zhang Ruilin and Zhao Jiangwei will be entitled to receive a severance payment equivalent to one year’s basic pay under the service contract, save for circumstances described in item (ii) above.

Save as disclosed above, as at the Latest Practicable Date, none of the Directors had any existing service contract or proposed service contract with the Group which is not determinable by the Group within one year without payment of compensation other than statutory compensation.

6. MATERIAL ADVERSE CHANGE

As at the Latest Practicable Date, the Directors were not aware of any material adverse change in the financial or trading position of the Group since December 31, 2015, the date to which the latest published audited accounts of the Company were made up.

7. EXPERT AND CONSENT

The following is the qualification of the expert who has been named in this circular or have given opinion or advice contained in this circular:

Name

Qualification

Chapman Petroleum Engineering Ltd.

Competent Person

Chapman Petroleum Engineering Ltd. is referred to as the ‘‘Expert‘‘ hereinafter.

As at the Latest Practicable Date, the Expert had no shareholding in any member of the Group, nor had any right, whether legally enforceable or not, to subscribe for or to nominate persons to subscribe for securities in any member of the Group, nor had any direct or indirect interest in any assets which have been acquired or disposed of by, or leased to, any member of the Group or are proposed to be acquired or disposed of by, or leased to, any member of the Group since December 31, 2015, the date to which the latest published audited accounts of the Group was made up.

The Expert has given and has not withdrawn its written consent to the issue of this circular with the inclusion of its letter(s) or report(s) and reference to its name in the form and context in which it is included.

– III-6 –

GENERAL INFORMATION

APPENDIX III

8. LITIGATION

As at the Latest Practicable Date, no members of the Group were engaged in any litigation, arbitration or claim of material importance and no litigation, arbitration or claim of material importance is known to the Directors to be pending or threatened against the Group as at the Latest Practicable Date.

9. MATERIAL CONTRACTS

The following contracts (not being contracts entered into in the ordinary course of business) have been entered into by the members of the Group within two years immediately preceding the issue of this circular and are material:

(a) the Sale and Purchase Agreement;
(b) supplemental indentures dated March 20, 2014, May 29, 2014, November 12, 2014, June 16, 2015 and July 16, 2015 and entered into among Citicorp International Limited (as the trustee), the Company (as the issuer), MI Energy Corporation, MIE New Ventures Corporation, Palaeontol Coperatief U.A., Palaeontol B.V., Emir-Oil, LLP., MIE Jurassic Energy Corporation, Asia Dynamic Energy Corporation, PanChina Resources Ltd., Miao Three Energy Limited, Gobi Energy Limited, Riyadh Energy Limited, Asia Oil & Gas (Cayman) Limited, and/or Asia Dynamic Energy Trading Corporation (each a subsidiary of the Company and as a guarantor) in relation to the amendment to an indenture dated February 6, 2013 and entered into among Citicorp International Limited (as the trustee), the Company (as the issuer), MI Energy Corporation, MIE New Ventures Corporation, Palaeontol Coperatief U.A., Palaeontol B.V., Emir-Oil, LLP., MIE Jurassic Energy Corporation, Asia Dynamic Energy Corporation, Pan-China Resources Ltd., Asia Power Energy Corporation, Gobi Energy Limited and Riyadh Energy Limited (each a subsidiary of the Company and as a guarantor) setting out the terms of the US$200,000,000 6.875% senior notes due 2018 issued by the Company;
(c) a sale and purchase agreement dated August 20, 2014 and an amendment agreement dated November 28, 2014, both entered into between the Company and Hong Kong Huihua Global Technology Limited in relation to the acquisition by Hong Kong Huihua Global Technology Limited from the Company of all of the issued share capital of Pan-China Resources Ltd at a consideration of US$83.1 million payable to the Company;
(d) a termination agreement dated September 16, 2014 and entered into between the Company and the Acap Limited in relation to the termination of the right granted by the Company to Acap Limited to co-invest with the Company or its associates for up to 9.9% of the assets acquired in the acquisition by Palaeontol B.V. of all the issued and outstanding participation interests of, and loans granted to, Emir-Oil, LLP pursuant to the participation interest purchase agreement dated February 14, 2011 and entered into between BMB Munai, Inc., Palaeontol B.V. and the Company and held by the Company or its associate as at the exercise of such right, at the consideration of US$11.9 million payable by the Company;

– III-7 –

GENERAL INFORMATION

APPENDIX III

(e) a termination agreement dated September 22, 2014 and an amendment agreement dated November 20, 2014, both entered into between the Company and the Essentia Investments Limited in relation to the termination of the right granted by the Company to Essentia Investments Limited to co-invest with the Company or its associates for up to 9.9% of the assets acquired in the acquisition by the Company of all the issued and outstanding shares of Pan-China Resources Ltd. pursuant to the consultancy agreement dated September 17, 2012 and entered into between Essentia Investments Limited and the Company and held by the Company or its associate as at the exercise of such right, at a consideration of US$3.7 million payable by the Company;
(f) a sale and purchase agreement dated September 26, 2014, an amendment agreement dated October 14, 2014, a supplementary agreement dated December 17, 2014 and a second amendment agreement dated December 31, 2014, all entered into between the Company and Pacific Energy Development (Asia) Co. Corp. in relation to the acquisition by Pacific Energy Development (Asia) Co. Corp. from the Company of all of the issued share capital of Miao Three Energy Limited at a consideration of US$21.2 million payable to the Company;
(g) a cooperation framework agreement dated December 16, 2014 and entered into between the Company and China Oil and Gas Group Limited in relation to the cooperation in the development of Shanxi Linxing block coalbed methane integrated utilization project;
(h) a placing and subscription agreement dated October 16, 2015, and entered into among New Sun International Energy Limited (‘‘New Sun’’), the Company and six institutional and individual investors, pursuant to which (a) New Sun sell to the investors in aggregate 276,300,000 Shares at the price of HK$0.90 per Share; and (b) New Sun subscribe, and the Company issue and allot 276,300,000 Shares at the price of HK$0.90 per Share;
(i) a settle agreement dated December 11, 2015 and entered into between the Company and the Acap Limited in relation to an outstanding termination fee payable by the Company to Acap Limited amounted to approximately US$6,830,000 is settled by the allotment and issue of 55,718,000 Shares to Acap Limited at the issue price of HK$0.95 per Share; and
(j) a sale and purchase agreement dated 26 April 2016 between the Company and China New Energy Mining Limited relating to the disposal of the entire issued share capital of Asia Gas & Energy Ltd. and the shareholder’s loan owed by Asia Gas & Energy Ltd. to the Company in consideration of US$220 million (approximately HK$1,716 million) (subject to adjustment).

– III-8 –

GENERAL INFORMATION

APPENDIX III

10. MISCELLANEOUS

(a) The registered office of the Company is at P.O. Box 309, Ugland House, Grand Cayman KY1-1104, Cayman Islands. The head office of the Company is at Sutie 1501, Block C, Grand Place, 5 Hui Zhong Road, Chaoyang District, Beijing 100101, the People’s Republic of China and the principal place of business in Hong Kong is at Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong.
(b) The branch share registrar and transfer office of the Company in Hong Kong is Tricor Investor Services Limited, at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong.
(c) The company secretary of the Company is Ms. Wong Sau Mei. Ms. Wong is an Associate of both The Hong Kong Institute of Chartered Secretaries and The Institute of Chartered Secretaries and Administrators.
(d) This circular is prepared in both English and Chinese. In the event of inconsistency, the English version shall prevail.

11. DOCUMENTS FOR INSPECTION

Copies of the following documents will be available for inspection at the Company’s principal place of business in Hong Kong at Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong during normal business hours on any weekday (except public holidays) for a period of 14 days from the date of this circular:

(a) the memorandum and articles of association of the Company;
(b) the audited consolidated accounts of the Group for each of the two financial years ended December 31, 2014 and 2015;
(c) the Sale and Purchase Agreement;
(d) the contracts referred to in the paragraph headed ‘‘Service Contracts of the Directors’’ in this Appendix;
(e) the contracts referred to in the paragraph headed ‘‘Material Contracts’’ in this Appendix;
(f) the Competent Person’s Report prepared by the Competent Person, the text of which are set out in Appendix I to this circular;
(g) the written consent from Chapman Petroleum Engineering Ltd. referred to in the paragraph headed ‘‘Expert and Consent’’ in this Appendix;
(h) the circular of the Company dated May 26, 2016 in relation to the disposal of the entire issued share capital of Asia Gas & Energy Ltd.; and
(i) this circular.

– III-9 –

NOTICE OF EGM

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MIE HOLDINGS CORPORATION MI 能源控股有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1555)

NOTICE OF EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN THAT the extraordinary general meeting (the ‘‘EGM’’) of MIE Holdings Corporation (the ‘‘Company’’) will be held at Room 3, United Conference Centre, 10/F, United Centre, 95 Queensway, Admiralty, Hong Kong on Monday, June 20, 2016 immediately after the conclusion or adjournment of the annual general meeting of the Company for the year 2016, for the purpose of considering and, if thought fit, passing with or without modification or amendment the following resolution:

ORDINARY RESOLUTION

‘‘THAT:

(a) the agreement dated March 5, 2016 (the ‘‘Sale and Purchase Agreement’’) entered into between the Company, Palaeontol Cooperatief U.A. and Reach Energy Berhad (a copy of which is produced to the EGM marked ‘‘A’’ and initialed by the chairman of the EGM for the purpose of identification), and the terms and conditions thereof and the transactions contemplated thereunder and the implementation thereof be and are hereby approved and confirmed; and
(b) the authorisation to any one of the Directors, or any other person authorised by the Board from time to time, for and on behalf of the Company, among other matters, to sign, seal, execute, perfect, perform and deliver all such agreements, instruments, documents and deeds, and to do all such acts, matters and things and take all such steps as he or she or they may in his or her or their absolute discretion consider to be necessary, expedient, desirable or appropriate to give effect to and implement the Sale and Purchase Agreement and the transactions contemplated thereunder and all matters incidental to, ancillary to or in connection thereto, including agreeing and making any modifications, amendments, waivers, variations or extensions of the Sale and Purchase Agreement or the transactions contemplated thereunder be and are hereby approved, ratified and confirmed.’’

By order of the Board MIE Holdings Corporation Zhang Ruilin Chairman

Hong Kong, May 26, 2016

– EGM-1 –

NOTICE OF EGM

Notes:

All resolutions at the meeting will be taken by poll pursuant to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the ‘‘Listing Rules’’) and the results of the poll will be published on the websites of Hong Kong Exchanges and Clearing Limited and the Company in accordance with the Listing Rules.
Any shareholder of the Company entitled to attend and vote at the above meeting is entitled to appoint more than one proxy to attend and on a poll, vote instead of him. A proxy need not be a shareholder of the Company.
In order to be valid, the form of proxy together with the power of attorney or other authority, if any, under which it is signed or a certified copy of that power of attorney or authority, must be deposited at the Company’s branch share registrar in Hong Kong, Tricor Investor Services Limited, at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong not less than 48 hours before the time appointed for the holding of the meeting or any adjournment thereof. Delivery of the form of proxy shall not preclude a shareholder of the Company from attending and voting in person at the meeting and, in such event, the instrument appointing a proxy shall be deemed to be revoked.
Where there are joint holders of any share of the Company, any one of such holders may vote at the meeting, either personally or by proxy, in respect of such share as if he was solely entitled thereto, but if more than one of such holders be present at the meeting personally or by proxy, that one of such holders so present whose name stands first on the register of members of the Company in respect of such share shall alone be entitled to vote in respect thereof.
For determining the entitlement to attend and vote at the meeting, the register of members of the Company will be closed from Thursday, June 16, 2016 to Monday, June 20, 2016, both days inclusive, during which period no transfer of shares will be registered. In order to be eligible to attend and vote at the meeting, all transfer documents accompanied by the relevant share certificates must be lodged with the Company’s branch share registrar in Hong Kong, Tricor Investor Services Limited, at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong, for registration not later than 4:30 p.m. on Wednesday, 15 June, 2016.

As at the date of this notice, the Board comprises (1) the executive Directors namely Mr. Zhang Ruilin, Mr. Zhao Jiangwei, Mr. Andrew Sherwood Harper, Mr. Tao Tak Yin Dexter and Mr. Tian Hongtao; (2) the non-executive Director namely Ms. Xie Na; and (3) the independent non-executive Directors namely Mr. Mei Jianping, Mr. Jeffrey W. Miller and Mr. Guo Yanjun.

– EGM-2 –

AI assistant

MIE Holdings Corporation — Proxy Solicitation & Information Statement 2016

49998_rns_2016-05-26_2e5da2e0-dcd2-4a17-9d19-0c9c4027f1fb.pdf

MIE HOLDINGS CORPORATION MI 能源控股有限公司

(1) MAJOR TRANSACTION DISPOSAL OF 60% EQUITY INTEREST IN PALAEONTOL B.V. AND

(2) NOTICE OF THE EXTRAORDINARY GENERAL MEETING

CONTENTS

DEFINITIONS

DEFINITIONS

‘‘RM’’

MIE HOLDINGS CORPORATION MI 能源控股有限公司

(1) MAJOR TRANSACTION DISPOSAL OF 60% EQUITY INTEREST IN PALAEONTOL B.V. AND

(2) NOTICE OF THE EXTRAORDINARY GENERAL MEETING

1. INTRODUCTION

2. THE SALE AND PURCHASE AGREEMENT

2.1 Date

2.2 Parties

2.3 Subject matter of the Disposal

2.4 Consideration and basis of determination

2.5 Conditions precedent

LETTER FROM THE BOARD

2.6 Completion

2.7 Shareholders’ Agreement

. Business of the Disposal Company

. Board and management

. Management of Emir-Oil

. Appointment of key personnel

. Reserved Matters

. Deadlock

. Budgets, work plans and account

Annual budgets and work plans

. Funding of the Disposal Company

. Transfer of shares

Restriction on share transfers

Permitted transfers

Right of pre-emption and tag-along rights

. Default and termination

Events of Default

Termination events

3. INFORMATION ABOUT THE PARTIES

The Group

The Seller

The Purchaser

Reach Energy

4. INFORMATION ABOUT THE DISPOSAL GROUP

LETTER FROM THE BOARD

Corporate Structure of the Disposal Group before and after Completion

5. FINANCIAL INFORMATION AND IMPACT OF THE DISPOSAL

6. REASONS FOR AND BENEFITS OF THE DISPOSAL

7. USE OF PROCEEDS FROM THE DISPOSAL

8. IMPLICATIONS UNDER THE LISTING RULES

9. EGM

10. RECOMMENDATION

11. OTHER INFORMATION

APPENDIX I COMPETENT PERSON'S REPORT

APPENDIX I COMPETENT PERSON'S REPORT

MIE HOLDINGS CORPORATION

APPENDIX I COMPETENT PERSON'S REPORT

APPENDIX I COMPETENT PERSON'S REPORT

112

LEGEND

MIE HOLDINGS CORPORATION

MIE HOLDINGS CORPORATION

LEGEND

MIE HOLDINGS CORPORATION

EMIR FIELD

142

MIE HOLDINGS CORPORATION

APPENDIX I COMPETENT PERSON'S REPORT

APPENDIX I COMPETENT PERSON'S REPORT

APPENDIX I COMPETENT PERSON'S REPORT

APPENDIX I COMPETENT PERSON'S REPORT

APPENDIX I COMPETENT PERSON'S REPORT

221

APPENDIX I COMPETENT PERSON'S REPORT

APPENDIX I

COMPETENT PERSON'S REPORT

1. STATEMENT OF INDEBTEDNESS

2. WORKING CAPITAL STATEMENT

3. FINANCIAL AND TRADING PROSPECTS OF THE GROUP

MIE Holdings Corporation Proxy Solicitation & Information Statement 2016