We refer to the Company’s announcements dated 5 March 2016, 18 March 2016, 11 April 2016, 12 April 2016, 24 May 2016, 20 June 2016, 4 July 2016, 19 July 2016 and 24 August 2016 in relation to the Proposed Acquisition (“Announcements”). Unless otherwise stated, all abbreviations used herein shall have the same meanings as those used in the Announcements.

On behalf of the Board, HLIB and Maybank IB wish to announce that Reach Energy, had on 5 September 2016, entered into an agreement with MIEH and Palaeontol COOP to extend the Longstop Date to 10 November 2016 (“Extended Longstop Date”) as well as amend certain terms of the SPA (“SPA Amendment No. 1”), namely the date of the hydrocarbon extraction contract for the Emir Field between the Republic of Kazakhstan and Emir-Oil due to a typographical error in the SPA and the definition of the Completion Payment to ensure consistency with BNM’s new method of determining the spot exchange rate between RM and USD.

The extension of the Longstop Date is subject to the following:

(i) MIEH shall be entitled to terminate the SPA by written notice to Reach Energy in the event that it is not satisfied with the progress of the issuance of the Company’s circular to its shareholders for approval of the Proposed Acquisition (“Circular”) or if MIEH is not satisfied with the progress towards the convening of the Company's EGM for approval of the Proposed Acquisition;
(ii) MIEH shall not be entitled to terminate the SPA prior to 1 October 2016; and
(iii) MIEH shall not be entitled to terminate the SPA after 7 October 2016.

In consideration of MIEH and Reach Energy agreeing to the extension of the Longstop Date, the following is agreed:

(i) Reach Energy shall pay to MIEH a sum of USD1.5 million (“Agreed Sum”) no later than 5.00 pm (Hong Kong) time on 7 September 2016;
(ii) upon MIEH’s receipt of the Agreed Sum, MIEH shall immediately deliver the Bank Guarantee to Reach Energy or to such other person directed by Reach Energy;
(iii) in the event the Agreed Sum is not received by MIEH by 5.00 pm (Hong Kong) time on 7 September 2016, MIEH shall be entitled to immediately call on the Bank Guarantee;
(iv) at Completion, the Adjusted Purchase Consideration shall be reduced by the Agreed Sum (or the amount of the Bank Guarantee if the Agreed Sum is not received by MIEH). For the avoidance of doubt, the Agreed Sum (or the amount of the Bank Guarantee if the Agreed Sum is not received by MIEH) shall be deducted from the portion of the Adjusted Purchase Consideration payable by Reach Energy on the Completion Date;
(v) in the event that the condition set out in the SPA in relation to the approval of the Proposed Acquisition by shareholders of Reach Energy at an EGM to be convened remains unfulfilled after the Extended Longstop Date, any party may terminate the SPA by providing written notice to the other parties provided always that no further Break Fee shall be payable by Reach Energy; and
(vi) where Reach Energy has duly paid the Agreed Sum (or MIEH has called on the Bank Guarantee) but Completion does not occur, MIEH shall be entitled to keep the Agreed Sum or amount called under the Bank Guarantee (as the case may be).

For clarity, under the terms of the SPA, in the event one party has failed to satisfy all or any of the Conditions Precedent which such party is responsible to satisfy by the Longstop Date, then such party shall pay to the other party the Break Fee provided that the other Party has satisfied the Conditions Precedent which the other Party is responsible to satisfy by the Longstop Date. Hence, the Agreed Sum to be paid to MIEH, is a payment in lieu of the call on the Bank Guarantee which MIEH is entitled to do by the Longstop Date. The Agreed Sum is not an additional payment for the Proposed Acquisition as under the agreed terms of the SPA Amendment No. 1, the Agreed Sum shall be deducted from the portion of the Adjusted Purchase Consideration payable by Reach Energy at the Completion Date.

The SPA Amendment No.1 will be available for inspection at the registered office of the Company at Level 8, Symphony House, Pusat Dagangan Dana 1, Jalan PJU 1A/46, 47301 Petaling Jaya, Selangor Darul Ehsan during normal business hours from Mondays to Fridays (except public holidays) for a period of three (3) months from the date of this announcement.

This announcement is dated 5 September 2016.