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Solo Oil Plc

Solo Oil Plc US$5 million Convertible Loan Facility

Solo Oil plc (LON:SOLO) has today announced that the Company has today entered into a Convertible Loan Agreement (“Agreement”) with institutional investors arranged by RiverFort Global Capital Limited (“RiverFort Investors”) for a total maximum commitment of US$5 million. The Company has also drawn a first tranche of US$1.5 million (“First Tranche”), with subsequent drawings against the facility to be at the Company’s sole election.

The First Tranche will be used to fund the Company’s share of forecasted activities within the Company’s investment portfolio, specifically:

· the final reconciled expenses for the Ntorya-2 well and flow testing in Tanzania, in which Solo holds a 25% working interest,

· screening engineering studies for the planned Ntorya early production scheme and full field development,

· a Competent Persons Report for the estimated gross 1.34 trillion cubic feet (“tcf”) gas in place Ntorya accumulation,

· additional studies at the Kiliwani North producing gas field, where Solo holds a 7.55% interest,

· upcoming long term well testing at the Horse Hill-1 oil discovery in the UK, in which Solo has a 10% participating interest in Horse Hill Development Limited,

· pre-drill technical work within the Helium One Limited investment in which Solo holds a 10% interest by means of shares, and; general investment working capital needs over the next 6 months.

Neil Ritson, Solo Oil Plc Executive Chairman, commented: “Solo is approaching a period of considerable activity which will require expenditure across all of the mature investments within our diverse portfolio. We anticipate that this expenditure will enhance the core underlying value of our portfolio through a range of exciting operational milestones.”

“Having undertaken a thorough review of the funding options available to Solo we have determined that this convertible loan facility is by far the most effective and least dilutive option for the Company and its shareholders. The facility conversion price is set at a 45% premium to the closing share price and the First Tranche provides us with the ability to cover our share of anticipated costs associated with the multiple activities that we forecast in the near future. As previously indicated, should we seek to raise significant operational funds, for example to drill additional wells in Ruvuma, we will open that funding round to existing shareholders to participate.”

Terms of the Loan

Each tranche (“Advance”) will have a 12 month term with and initial 3 month repayment holiday and will bear an 8 percent per annum interest rate. During the term of the Agreement the Company may elect to make repayments of principal and accrued interest in shares or in cash. Shares used to pay principal and interest will be issued at the lower of (a) 145% of the closing share price of the Company on the date of the drawdown (“Fixed Conversion Price”), or (b) 95% of the lowest daily VWAP over the 10 trading days immediately prior to a notice of conversion. Should the Company elect to make a repayment of principal and interest in cash, a redemption fee of 5% is also payable.

The Company can elect to extend the term of each Advance by 6 months by giving 30 days notice before the end of the 12 month term and paying an extension fee of 5%.

During the term of the Agreement the RiverFort Investors covenant that they and their affiliates and insiders will hold no net short position in the Company. The Company will issue warrants to the RiverFort Investors over 15% of each tranche at the Fixed Conversion Price of each tranche with a three year term.

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