1. INTRODUCTION

The Board of Directors of Reach Energy Berhad (“REB” or “the Company”) wishes to announce that the Company’s sub-subsidiary, Emir Oil LLP (“EO” or “the Defendant”) had received claim of damages from Ministry of Energy (“MOE” or “Plaintiff”) in Kazakhstan on 26 August 2020 in connection with the inspection carried out by MOE. These claim as detailed in item 2 of this announcement had been heard on 13 November 2020.

(hereinafter collectively referred to the “suit”)

2. PARTICULARS OF THE CLAIMS

Pursuant to the Statement of Claim, the Plaintiff claimed the following from the Defendant:

1. Violation of the gas dispersion from open tanks; and
2. Total claim for Damage amounting to RM 7,630,000  (KZT 796,618,061.4).

3.    CIRCUMSTANCES LEADING TO THE SUIT

During the inspection carried out by MOE for the periods from January 2018 up to September 2019, MOE observed some substance of gas dispersion violations from open tanks in EO. In general, any gas dispersion was not permitted pursuant to the Subsoil Use Codes in Kazakhstan.

4.FINANCIAL AND OPERATIONAL IMPACT ON THE COMPANY

In the event that the suit is not in favour of the Company, the financial impact to the Company shall be limited to the amount awarded by the Court.

5. STEPS TAKEN AND/OR PROPOSED TO BE TAKEN IN RESPECT OF THE SUIT

The Court in Kazakhstan (“the Court”) had on 13 November ruled that EO had lost the case and shall pay for the damages amounting RM7,292,000 (KZT 760,000,000). The Court further indicated that EO could file its appeal by 13 December 2020. Hence, the Company is seeking necessary legal advice to resolve and /or to defend the legal suit.

The Company will make necessary announcements to Bursa Malaysia Securities Berhad as and when there are further developments in relation thereof and/or upon receipt of any further directions by the Court.

This announcement is dated 17 November 2020.