Lansdowne Oil & Gas plc

Proposed Share Capital Reorganisation, Authority to Allot New Ordinary Shares and Adoption of new Articles of Association

23 May 2016

Lansdowne Oil & Gas ("Lansdowne" or "the Company"), the independent oil and gas company focussed on offshore Ireland, announces that it has posted a circular to Shareholders convening a General Meeting to be held at 11am on 9^th June 2016 to ask Shareholders to approve a Capital Reorganisation, authority for the Directors to allot New Ordinary Shares and the adoption of new Articles of Association.

All capitalised terms in this announcement are as defined in the circular containing notice of the General Meeting which is available free of charge on the Company's website: www.lansdowneoilandgas.com.

Introduction

The Company has announced today that it is convening a meeting of its Shareholders to seek authority to issue New Ordinary Shares pursuant to a potential equity fundraising in the event that the Directors consider that to be in the best interests of the Company and the Shareholders as a whole.

The Company announced on 13 April 2016 that trading in its Ordinary Shares on AIM was being temporarily suspended in advance of a final decision of the Court of Appeal in relation to an appeal lodged by Transocean Drilling UK Limited ("Transocean") against the judgement of Mr Justice Popplewell, which was notified by the Company on 22 December 2014 (the "COA Ruling"). Details of the COA Ruling were notified by the Company on 13 April 2016, being a ruling in favour of Transocean. The Company further announced on 13 April 2016 that the Company, through its 20 per cent. interest in the Barryroe Field, will need to raise capital (i) to meet any liabilities arising from the COA Ruling, and (ii) for its ongoing working capital requirements. Accordingly, the abovementioned temporary suspension of trading in Ordinary Shares on AIM was continued pending clarification of the Company's financial position.

It is essential that the Company raises additional funds in early course to continue its ongoing business. To this end, the Directors have, since 13 April 2016, been exploring a range of options to secure the funding necessary to enable it to meet its anticipated liabilities and secure the necessary working capital (the "Required Funding"). Discussions with regard to such options are continuing. One option currently being explored is an equity fundraising through the issue of New Ordinary Shares (a "Potential Fundraising"). The Directors are mindful of the Company's requirement to secure the Required Funding as soon as possible and have elected to convene the General Meeting to seek, inter alia, authority from the Shareholders to allot up to 350 million New Ordinary Shares (which would represent 216 per cent. of the Company's current ordinary issued share capital) in the event that the Directors are able to agree the terms of a Potential Fundraising and are of the view that proceeding with a Potential Fundraising would be in the best interests of the Company and the Shareholders as a whole. To delay seeking this authority until such time as the terms of a Potential Fundraising are agreed would delay completion of such Potential Fundraising by up to two and a half weeks, given the notice requirements that would be applicable to the related general meeting of Shareholders. The Directors do not believe that delaying completion of such a Potential Fundraising would be in the best interests of the Company and the Shareholders as a whole. To the extent the Directors intend to proceed with a Potential Fundraising, the Company will notify the Shareholders of the terms of such Potential Fundraising prior to its completion.

Further, the Company is also proposing to undertake the Share Capital Reorganisation, details of which are set out below.

Background to and reasons for the Share Capital Reorganisation

As at 21 May 2016, the Company had 161,741,795 Ordinary Shares in issue, with an Ordinary Share having a share price on 13 April 2016, being the date on which trading in the Company's Ordinary Shares on AIM was temporarily suspended, of 2.12 pence per Ordinary Share.

The Directors anticipate that the issue price of New Ordinary Shares pursuant to a Potential Fundraising will likely be at a significant discount to the above share price, and certainly below the nominal value of the Existing Ordinary Shares (being £0.05 per such share). Under the Act, the Company is prohibited from issuing new shares at a price below their nominal value. Accordingly, the Company proposes to carry out the Share Capital Reorganisation, which will ultimately have the effect of reducing the nominal value of each Ordinary Share, to avoid a contravention of the relevant provisions of the Act in the event that the Directors resolve to proceed with a Potential Fundraising.

It is proposed that the Share Capital Reorganisation be effected by each Existing Ordinary Share being sub-divided and converted into one New Ordinary Share of £0.001 and one Deferred Share of £0.049. The New Ordinary Shares will continue to carry the same rights as are attached to the Existing Ordinary Shares.

To give effect to the Share Capital Reorganisation the Company's existing articles of association (the "Existing Articles") will need to be amended to make changes to allow for the creation of the Deferred Shares. These amendments (in the form of the New Articles) will also require Shareholders' approval at the General Meeting.

The rights of the Deferred Shares will be minimal, thereby rendering the Deferred Shares effectively valueless, and can be summarised as follows:

·     they will not entitle holders to receive any dividend or other distribution or to receive notice or speak or vote at general meetings of the Company;

·     they will have no rights to participate in a return of assets on a winding up;

·     they will not be freely transferable unless the Board, acting in its absolute discretion, has approved such transfer;

·     the creation and issue of further shares will rank equally or in priority to the Deferred Shares;

·     the passing of a resolution of the Company to cancel the Deferred Shares or to effect a reduction of capital shall not constitute a modification or abrogation of their rights; and

·     the Company shall have the right at any time to purchase all of the Deferred Shares for an aggregate consideration of 1 pence.

The Deferred Shares will not be listed or traded on AIM and no share certificates will be issued in respect of the Deferred Shares, nor will CREST accounts of Shareholders be credited in respect of any entitlement to Deferred Shares.

No new share certificates will be issued following the Share Capital Reorganisation and CREST accounts will not be credited as Shareholders' total shareholdings will not change.

A copy of the proposed New Articles is available from the Company Secretary on request.

Recommendation

The Directors consider the passing of the Resolutions to be in the best interests of the Company and its Shareholders as a whole. The Board stresses the importance of Shareholders voting in favour of the Resolutions at the General Meeting. As noted at paragraph 1 above, it is essential that the Company raises additional funds in early course to continue its on-going business. If the Directors resolve that a Potential Fundraising is the best way of securing such additional funds then the Company will need to have the ability to complete such a Potential Fundraising without delay.  Accordingly, the Directors unanimously recommend that all Shareholders vote in favour of the Resolutions, as they intend to do, or procure to be done, in respect of their own beneficial shareholdings, being at the Latest Practicable Date in aggregate 3,327,998 Existing Ordinary Shares, representing approximately 2.06 per cent. of the total number of Existing Ordinary Shares.  In addition, LC Capital Master Fund Limited has indicated that it intends to vote in favour of the Resolutions in respect of its holding of 45,356,746 Existing Ordinary Shares representing 28.04 per cent. of the Existing Ordinary Shares.

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For more information on Lansdowne, please refer to www.lansdowneoilandgas.com.