Exillon Energy: Board Response to Shareholder Requisition

As previously announced, Worldview Capital Management, the manager of a Cayman-registered fund which beneficially owns a stake in Exillon Energy plc, has requisitioned an EGM to vote on a number of proposals to change Exillon’s Board.

·     The Board recommends Shareholders VOTE AGAINST ALL of the Worldview proposals at the EGM on 19 March 2013

·     Shareholders holding significantly over 50% of Exillon’s issued share capital have confirmed in writing to the Board and its advisers that they intend to vote against Worldview’s proposals, including leading institutions Schroders, JP Morgan Asset Management and Fidelity Worldwide Investment

·     Worldview’s press release of 14 January 2013 misleadingly portrayed Exillon in a negative light resulting in the Company’s share price falling c.10%. This wiped nearly $38 million off Exillon’s market valuation

·     Worldview took advantage of this price fall to increase its shareholding in Exillon

·     Worldview’s actions concerning Exillon over several months have been reported to the Financial Services Authority and the UK Takeover Panel

·     Exillon’s Board believes the Company’s share price is undervalued. The Board believes increasing the share price is best achieved by increasing oil production

·       Exillon’s average daily oil production has increased 47% in 2012 and by more than 700% since the IPO in 2009

·     The Company has more than doubled its proven & probable reserve base from approximately 132 million to 265 million barrels since the IPO

Worldview’s proposed director candidates

Andrey Krughlykin

·     Mr Kruglykhin is well known to both the Exillon Chairman and CEO, having previously worked for the Exillon Chairman at ING Bank

·     During 2012 Mr Kruglykhin put himself forward as a candidate for the Exillon Board but the Board concluded that he was not a suitable candidate. His candidacy was rejected and the Board’s opinion is unchanged

·     During several meetings held last year with Exillon, Mr Kruglykhin, the Worldview Chief Compliance Officer, made a highly inappropriate proposal concerning future purchases of Exillon’s Shares. This was summarily rejected by Exillon’s Board

·     This conduct was taken into account and was one of the many reasons that the Board determined again not to recommend the resolution to appoint Mr Kruglykhin as a director

James Dewar and Yves Mérer

After discussion with the Board, Messrs Dewar and Mérer have withdrawn their consent to act as directors of Exillon. Accordingly, the resolutions to elect Messrs Dewar and Mérer will not be put to Shareholders at the EGM.

Exillon’s CEO, Mark Martin, said:

“Worldview has made serious allegations about Exillon. Today’s shareholder Circular sets out in detail the misleading nature of these allegations.”

“Worldview’s actions undermined market confidence in Exillon. Our share price fell approximately 10% after their false and misleading allegations. They then increased their shareholding in us. We have reported this suspicious sequence of events to the FSA.”

“At several meetings Andrey Kruglykhin, Worldview’s Chief Compliance Officer, made a proposal regarding potential share purchases that we believe was highly inappropriate and directly contrary to the interests of our minority shareholders. We rejected his proposal out of hand and have reported this to The Panel for Takeovers and Mergers.”

Exillon’s Independent Chairman, David Herbert, said:

“Exillon has had a Premium Listing on the LSE since 2009. As befits such a status and with our assets being located in Russia, it is imperative that we apply the highest standards of corporate governance. We do.”

“The majority of our shareholders have expressed in writing their intent to vote against all of Worldview’s proposals at the EGM.”

Exillon’s Senior Independent Director, Stuard Detmer, said:

“We are always open-minded about strengthening the Board and about any other proposals to enhance shareholder value. However, we feel that Andrey Kruglykhin, the only director proposed by Worldview who has not withdrawn his nomination, is not a suitable candidate for the Board.”

The Head of Exillon’s Audit Committee, Anne Belveze, said:

“Exillon’s audit procedures meet the highest international standards. We expect to announce our Preliminary Results for 2012, prepared by Ernst & Young, on Friday 8th March.”

A full copy of the Circular, outlining the Board’s rational for rejection of Worldview’s various proposals has been submitted to the National Storage Mechanism and is available for inspection at the link provided: http://www.morningstar.co.uk/uk/NSM. In this document the Company addresses the assertions made by Worldview.