RUSPETRO PLC 
By
Ruspetro plc ("Ruspetro" or the "Company") is pleased to announce today a number of updates on its operations and actions that it believes will enhance the Company's balance sheet and allow the Company to pursue a well-funded investment plan at this important phase of field development. As follows:
- Strengthening of Ruspetro's balance sheet including:
o An expected offering of senior secured notes ("Notes") (details of which are in a
separate announcement also made today);
o A corporate and security credit rating expected later today from Standard and
Poor's;
o Proposed conversion of Limolines Transport Limited's ("LTL" or "Limolines") outstanding shareholder loan into new ordinary shares in the Company, at the IPO price of 134 pence per share subject to the successful Notes offering; and
o A new revolving facility at an initial level of US$50 million extended to the Company by Sberbank post repayment of the existing Sberbank facility from the proceeds of the Notes.
- An update on near term production:
o Heat exchange system expected to come on-line in February 2013 enabling condensate production to increase from the current level of 1,400 bopd towards
4,000 bopd and bring total crude and condensate production from 6,500 bopd to approximately 9,000 bopd; and
o Given the cash generative nature of condensate production, 9,000 bopd of
combined production is equivalent to approximately 12,000 bopd of crude oil only production in well head revenue terms.
- An updated development plan setting out:
o Average crude and condensate production planned for 2013 of 10,000 bopd, with a target 2013 exit rate of 13,000 bopd, followed by target exit rates of 20,000 bopd in
2014 and 31,000 bopd in 2015
o Plans to drill 29 wells in 2013 and 48 wells in 2014
The contemplated revolving facility from Sberbank, combined with the offering of Notes and the conversion of the Limolines shareholder loan, once completed, provides funding for our business plan enabling the Company to maintain the pace of developing its reserves. It is expected that net proceeds from the Notes offering, above the amount required to repay the Sberbank loan, will be used primarily for financing field development.
Commenting on today's updates, Don Wolcott, Chief Executive of Ruspetro remarked:
"We are delighted to announce our plans for strengthening of our balance sheet through a range of actions today, including the Notes offering, Limolines loan conversion and the new Sberbank facility. These will simplify our capital structure and raise new funds that can be deployed in to the field. Our business is now operating cash flow positive and we believe that our strategic development plan will put the business on a firm trajectory for growth in 2013 and beyond."
Investors / Analysts:
Dominic Manley, Ruspetro plc
+44 207 318 1265
Media:
Patrick Handley / Catriona McDermott, Brunswick
+44 207 404 5959
Ruspetro plc is an independent oil & gas development and production company, listed on the London Stock Exchange (LSE: RPO). The Company's operations are located on three contiguous license blocks in the middle of the Krasnoleninsk Arch in Western Siberia. Ruspetro assets include proved and probable (2P) reserves of over 1.5 billion barrels of oil.
Overview of Balance Sheet Strengthening Measures:
Offering of Senior Secured Notes
Ruspetro has today announced an expected offering of senior secured notes, the proceeds of which will be used to repay the current Sberbank loan and other shareholder loans and will be deployed towards the Company's drilling programme. The offering of the Notes will serve to:
• strengthen the Company's balance sheet by replacing the existing Sberbank loan;
• provide up to US$50 million of additional working capital;
• increase the maturity of long-term debt on the Company's balance sheet; and
• enable the conversion of the outstanding Limolines shareholder loan into new ordinary shares in the Company.
Upon closing of the Notes offering, Sberbank will put in place a US$50 million reserve credit facility maturing in 2018 primarily to service interest payments on the Notes and also to be available for working capital purposes after 2014.
Ruspetro expects Standard and Poor's ("S&P") to accord Ruspetro a corporate credit rating and the senior secured notes a credit rating. S&P's report will be published in full today. A security rating is not a recommendation to buy, sell or hold securities and should be evaluated independently of any
other rating. A rating is subject to revision or withdrawal at any time by the assigning rating organization.
As disclosed in the Company's IPO Prospectus, on 17 January 2012 Limolines, the largest shareholder in Ruspetro, and the Company (among others) entered into a deed of amendment (the "Deed of Amendment"), pursuant to which they agreed that the Company would, subject to certain conditions, issue new ordinary shares to Limolines on the date that is 13 months from the date of Admission, in full and final satisfaction of the Limolines' loan to the Company.
In connection with the Company's proposed offering of the Notes, the Company and Limolines have today entered into a supplemental deed (the "Supplemental Deed") to vary the terms of the Deed of Amendment, pursuant to which the Company and Limolines agreed, inter alia, that the conversion price would be fixed at 134 pence per share, being the price at which the Company undertook its initial public offering (the "IPO Price"). Subject to receipt of necessary approvals and satisfaction of other conditions, the Company intends to convert the total principal and accrued interest outstanding under the facility (estimated to be approximately US$62.8 million as at 25 February
2013, being the proposed date of the Conversion) into new ordinary shares at a conversion price
equal to the IPO Price.
The Conversion is conditional on the completion of the proposed offering of the Notes and the proceeds from the proposed offering of the Notes will only be released to the Company after the approval of the Conversion by Ruspetro shareholders. Completion of the Conversion will be dependent on obtaining the necessary shareholder approvals required at a general meeting of shareholders expected to be held on 18 February 2013.
The Board considers that the Conversion will:
