Mercom Oil Sands : Issue of Equity

Mercom Oil Sands plc

("the Company")

Issue of equity

The Company announces that it has allotted a total of 3,034,886 New Ordinary Shares at 4.625p per share (being the mid-market closing price at the close of business on 5 May 2015). Of these shares, 440,291 New Ordinary Shares have been allotted to Patrick Cross in settlement of director's fees and expenses of £20,363 for the period from 1 July 2014 to 30 April 2015 and 2,594,595 New Ordinary Shares have been allotted to John Zorbas in settlement of invoices totalling £120,000 in respect of his consultancy contract with the Company, for the period 1 April 2014 to 31 March 2015 and are being settled in shares in order to preserve the Company's cash resources ("the New Ordinary Shares").

The issue of the New Ordinary Shares is a related party transaction under the AIM Rules. Kyle Appleby, the independent director for the purposes of the AIM Rules, considers, having consulted with Northland Capital Partners Limited, the Company's nominated adviser, that the terms of the issue of the New Ordinary Shares are fair and reasonable so far as the Company's shareholders are concerned.

Application will be made for the New Ordinary Shares, which rank pari passu with the Company's existing issued Ordinary Shares, to be admitted to trading on AIM ("Admission"). Admission is expected to take place on or around 12 May 2015.

Following the issue of the New Ordinary Shares, the Company's issued share capital comprises 15,644,515 Ordinary Shares. There are 200,036 Ordinary Shares in treasury. The total number of voting rights in the Company is therefore 15,444,479 . This figure may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in their interest in, the share capital of the Company under the FCA's Disclosure and Transparency Rules.

Following the issue of the New Ordinary Shares, the interests of the Directors in the enlarged issued share capital of the Company will be as follows:

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