Sunny Hill Limited All Cash Offer for Petroceltic (2322Q)

TIDMPCI

RNS Number : 2322Q

Sunny Hill Limited

26 February 2016

For immediate release

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART DIRECTLY OR INDIRECTLY IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION.

26 February 2016

ALL CASH OFFER

SUNNY HILL LIMITED

FOR

PETROCELTIC INTERNATIONAL PLC

SUMMARY AND HIGHLIGHTS:

-- Sunny Hill Limited ("Sunny Hill"), a company wholly owned by the Worldview Economic Recovery Fund (the "Economic Recovery Fund"), is pleased to announce the terms of an all cash offer to be made by it for the entire issued and to be issued share capital of Petroceltic International plc ("Petroceltic") other than the Petroceltic Shares in the beneficial ownership or control of Worldview International Management Limited SEZC ("Worldview") and/or any of the Worldview Funds (as defined below).

   --      Under the terms of the Offer, Petroceltic Shareholders will be entitled to receive:

3 pence in cash for each Petroceltic Share

-- The Offer values the entire issued and to be issued share capital of Petroceltic at approximately GBP6.42 million.

-- The directors of Sunny Hill believe that the value of the equity in Petroceltic is close to zero, given the parlous financial position of the Company. However, as an incentive to Petroceltic Shareholders to accept the Offer, in order to allow Sunny Hill and Worldview to accelerate addressing the Company's indebtedness issues, Sunny Hill is prepared to offer 3 pence, in cash, per Petroceltic Share. The directors of Sunny Hill have a particular concern with regard to the Company's precarious, and worsening, financial position, particularly with regard to the form, structure and level of the Company's indebtedness to the Banking Syndicate and the stream of short term repayment waivers that the Company has had to seek from the Banking Syndicate to prevent Petroceltic defaulting on the Senior Bank Facility.

-- The Offer provides an opportunity for Petroceltic Shareholders to realise their investment in full and in cash. The Offer Price per Petroceltic Share represents a discount of approximately:

-- 83.3 per cent. to the Closing Price of 18.0 pence per Petroceltic Share on 25 February 2016, being the last trading day prior to the date of this announcement;

-- 73.9 per cent. to the Closing Price of 11.5 pence per Petroceltic Share on 21 January 2016, being the last trading day prior to the date of the Possible Offer Announcement; and

-- 89.4 per cent. to the Closing Price of 28.375 pence per Petroceltic Share on 22 December 2015, being the last trading day prior to the commencement of the Offer Period.

-- Sunny Hill is a private exempted company, incorporated in the Cayman Islands with limited liability, recently established specifically for the purposes of making the Offer, and wholly owned by the Economic Recovery Fund.

-- Worldview is a private investment management firm incorporated in the Cayman Islands which provides discretionary investment management and advisory services to certain funds (including the Economic Recovery Fund) and to other clients through managed accounts and has associated operations in the United Kingdom and the United States. Worldview's principal focus is the pursuit of a range of investment opportunities in central and Eastern Europe, South Eastern Europe, Russia and other FSU countries, central Asia and Africa, investing across a variety of asset classes.

-- As at the date of this announcement, Worldview, as discretionary manager of the Worldview Funds, controls approximately 29.6 per cent. of the existing issued share capital of Petroceltic.

The Offer will be conducted by way of a contractual takeover offer and will be conditional, inter alia, upon the receipt by Sunny Hill of valid acceptances in respect of not less than 90 per cent. of the Petroceltic Shares Affected.

Commenting on the Offer on behalf of Sunny Hill, Angelo Moskov, Director of Sunny Hill and CEO of Worldview, said:

"Although Petroceltic's assets may, arguably, have long term potential, if both the right capital structure and management team were in place, in light of the current oil price and Petroceltic's sizeable level of indebtedness, its negative cash flow generation and worsening financial position, we believe that the Company requires a significant restructuring of both its operations and balance sheet, a simplified and more cost effective corporate structure, a revised strategic direction, and a new senior management team committed to this new approach.

Our Offer provides Petroceltic Shareholders with an all cash exit from a high risk, distressed investment, against the background of unprecedented uncertainty in the oil and gas sector."

This summary should be read in conjunction with, and is subject to, the full text of the following announcement (including the Appendices).

The Offer will be made on the terms and subject to the conditions set out in this announcement (including the conditions and further terms set out in Appendix I) and to be set out in the Offer Document and the Form of Acceptance when published. Appendix II to this announcement contains the bases of calculation and sources of certain information contained in this announcement. Appendix III sets out definitions and rules of interpretation for certain terms used in this announcement (including in this summary).

This announcement constitutes a firm intention to make the Offer pursuant to Rule 2.5 of the Irish Takeover Rules. Sunny Hill reserves the right, with the consent of the Irish Takeover Panel, to elect to implement the acquisition of Petroceltic by way of a court approved scheme of arrangement under Chapter 1 (Schemes of Arrangement) of Part 9 of the Companies Act.

Strand Hanson Limited and Hannam & Partners (Advisory) LLP are acting as joint financial advisers to Sunny Hill and Worldview.

Enquiries:

 
 Sunny Hill Limited (enquiries via Hudson     Tel: +44 (0)20 7796 4133 
  Sandler) 
  Angelo Moskov 
 
 Strand Hanson Limited                        Tel: +44 (0)20 7409 3494 
  (Joint Financial Adviser to Sunny Hill 
  and Worldview) 
  Stuart Faulkner 
  Matthew Chandler 
  James Dance 
 
 Hannam & Partners (Advisory) LLP             Tel: +44 (0)20 7907 8500 
  (Joint Financial Adviser to Sunny Hill 
  and Worldview) 
  Neil Passmore 
  Giles Fitzpatrick 
  Andrew Chubb 
 
 Hudson Sandler                               Tel: +44 (0)20 7796 4133 
  (PR Advisers to Sunny Hill and Worldview) 
  Charlie Jack 
  Emily Dillon

The directors of Sunny Hill accept responsibility for the information in this announcement, save that the only responsibility accepted by the directors of Sunny Hill in respect of the information in this announcement relating to Petroceltic, the Petroceltic Group, the board of directors of Petroceltic and persons connected with them, which has been compiled from public sources, has been to ensure that such information has been correctly and fairly reproduced or presented (and no steps have been taken by the directors of Sunny Hill to separately verify this information). To the best of the knowledge and belief of the directors of Sunny Hill (who have taken all reasonable care to ensure that such is the case), the information contained in this announcement for which they are responsible is in accordance with the facts and does not omit anything likely to affect the import of such information.

The directors of Worldview accept responsibility for the information in this announcement, save that the only responsibility accepted by the directors of Worldview in respect of the information in this announcement relating to Petroceltic, the Petroceltic Group, the board of directors of Petroceltic and persons connected with them, which has been compiled from public sources, has been to ensure that such information has been correctly and fairly reproduced or presented (and no steps have been taken by the directors of Worldview to separately verify this information). To the best of the knowledge and belief of the directors of Worldview (who have taken all reasonable care to ensure that such is the case), the information contained in this announcement for which they are responsible is in accordance with the facts and does not omit anything likely to affect the import of such information.

Strand Hanson Limited, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting as joint financial adviser to Sunny Hill and Worldview and no one else in relation to the matters described in this announcement and is not advising any other person, and accordingly will not be responsible to anyone other than Sunny Hill and Worldview for providing the protections afforded to its clients or for providing advice in relation to the matters described in this announcement.

Hannam & Partners (Advisory) LLP, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting as joint financial adviser to Sunny Hill and Worldview and no one else in relation to the matters described in this announcement and is not advising any other person, and accordingly will not be responsible to anyone other than Sunny Hill and Worldview for providing the protections afforded to its clients or for providing advice in relation to the matters described in this announcement.

Disclosure requirements under the Irish Takeover Rules

(MORE TO FOLLOW) Dow Jones Newswires

February 26, 2016 02:02 ET (07:02 GMT)

Under the provisions of Rule 8.3 of the Irish Takeover Rules, if any person is, or becomes, "interested" (directly or indirectly) in 1 per cent. or more of any class of "relevant securities" of Petroceltic, all "dealings" in any "relevant securities" of Petroceltic (including by means of an option in respect of, or a derivative referenced to, any such "relevant securities") must be publicly disclosed by no later than 3.30 p.m. (Dublin time) on the "business day" following the date of the relevant transaction. This requirement will continue until the date on which the "offer period" ends. If two or more persons co-operate on the basis of any agreement, either express or tacit, either oral or written, to acquire an "interest" in "relevant securities" of Petroceltic, they will be deemed to be a single person for the purpose of Rule 8.3 of the Irish Takeover Rules.

Under the provisions of Rule 8.1 of the Irish Takeover Rules, all "dealings" in "relevant securities" of Petroceltic by Sunny Hill, or by any party "acting in concert" with Sunny Hill, must also be disclosed by no later than 12.00 noon (Dublin time) on the "business" day following the date of the relevant transaction.

A disclosure table, giving details of the companies in whose "relevant securities" "dealings" should be disclosed can be found on the Irish Takeover Panel's website at www.irishtakeoverpanel.ie.

"Interests in securities" arise, in summary, when a person has long economic exposure, whether conditional or absolute, to changes in the price of securities. In particular, a person will be treated as having an "interest" by virtue of the ownership or control of securities, or by virtue of any option in respect of, or derivative referenced to, securities.

Terms in quotation marks in this section, Disclosure requirements under the Irish Takeover Rules, are defined in the Irish Takeover Rules, which can be found on the Irish Takeover Panel's website. If you are in any doubt as to whether or not you are required to disclose a dealing under Rule 8, you should consult the Irish Takeover Panel's website at www.irishtakeoverpanel.ie or contact the Irish Takeover Panel on telephone number +353 (0) 1 678 9020 or fax number +353 (0) 1 678 9289.

Forward-looking statements

This announcement may contain certain "forward-looking statements" with respect to the business, strategy and plans of Sunny Hill and its expectations relating to the Offer and Petroceltic's future financial condition and performance. Statements that are not historical facts, including statements about Petroceltic or Sunny Hill, or statements of Sunny Hill's or Worldview's beliefs and expectations, are forward looking statements. Words such as "believes", "anticipates", "estimates", "expects", "intends", "aims", "potential", "will", "would", "could", "considered", "likely" and variations of these words and similar future or conditional expressions are intended to identify forward looking statements, but are not the exclusive means of identifying such statements. By their nature forward looking statements involve risk and uncertainty because they relate to events, and depend upon future circumstances, that may or may not occur. The information contained herein does not seek to cover every future eventuality which may or may not occur, whether in or out of Sunny Hill's control.

Examples of such forward looking statements include, but are not limited to, statements about expected benefits and risks associated with the Offer; projections or expectations of profit attributable to shareholders; anticipated provisions or write-downs, economic profit, dividends, capital structure or any other financial items or ratios; statements of plans, objectives or goals of Petroceltic or Sunny Hill following the Offer; statements about the future trends in interest rates, liquidity, foreign exchange rates, the price of oil, stock market levels and demographic trends and any impact that those matters may have on Petroceltic or Sunny Hill following the Offer; statements concerning any future economic environment or performance; statements about strategic goals, competition, regulation, regulatory approvals, dispositions and consolidation or technological or regulatory developments; and statements of assumptions underlying such statements.

Forward-looking statements only speak as of the date on which they are made, and the events discussed in this announcement may not occur. Neither Sunny Hill nor its members, directors, officers or employees, advisers or any person acting on its behalf, provides any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements in this announcement will actually occur. Save as may be required by law, Sunny Hill does not undertake any obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. You are cautioned not to place any reliance on any forward-looking statements.

No profit forecast or asset valuation

No statement in this announcement is intended to constitute a profit forecast for any period, nor should any statement be interpreted to mean that earnings or earnings per share will necessarily be greater or lesser than those for the relevant preceding financial periods for any of Petroceltic or Sunny Hill (as the case may be). No statement in this announcement constitutes an asset valuation.

General

THIS ANNOUNCEMENT IS NOT INTENDED TO, AND DOES NOT, CONSTITUTE OR FORM PART OF (I) ANY OFFER (INCLUDING THE OFFER) OR INVITATION TO PURCHASE OR OTHERWISE ACQUIRE, SUBSCRIBE FOR, TENDER, EXCHANGE, SELL OR OTHERWISE DISPOSE OF ANY SECURITIES, (II) THE SOLICITATION OF ANY OFFER (INCLUDING THE OFFER) OR INVITATION TO PURCHASE OR OTHERWISE ACQUIRE, SUBSCRIBE FOR, TENDER, EXCHANGE, SELL OR OTHERWISE DISPOSE OF ANY SECURITIES OR (III) THE SOLICITATION OF ANY VOTE OR APPROVAL IN ANY JURISDICTION IN RESPECT OF ANY OFFER (INCLUDING THE OFFER) OR OTHERWISE.

Any response in relation to the Offer should be made only on the basis of the information contained in the Offer Document or any other document by which the Offer is made.

The distribution of this announcement in or into certain jurisdictions may be restricted by the laws of those jurisdictions. Accordingly, copies of this announcement and all other documents relating to the Offer are not being, and must not be, mailed or otherwise forwarded, distributed or sent in, into or from any Restricted Jurisdiction. Persons receiving such documents (including, without limitation, nominees, trustees and custodians) should observe these restrictions. Failure to do so may constitute a violation of the securities laws of any such jurisdiction.

A copy of this announcement will be made available (subject to certain restrictions relating to persons resident in Restricted Jurisdictions) on Sunny Hill's website at www.sunnyhill.co by no later than 12.00 noon (Dublin time) on 29 February 2016. The content of the website referred to in this announcement is not incorporated into and does not form part of this announcement.

This announcement has been prepared for the purposes of complying with Irish law, the Irish Takeover Rules, the AIM Rules, the ESM Rules and all other applicable rules and regulations of the Irish Stock Exchange and the London Stock Exchange and (save for the AIM Rules and any applicable rules and regulations of the London Stock Exchange, which are matters of English law and regulation) the information disclosed may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws and regulations of any jurisdiction outside of Ireland.

For immediate release

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART DIRECTLY OR INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION.

26 February 2016

ALL CASH OFFER

SUNNY HILL LIMITED

FOR

PETROCELTIC INTERNATIONAL PLC

   1          Introduction

Sunny Hill Limited ("Sunny Hill"), a company wholly owned by the Worldview Economic Recovery Fund (the "Economic Recovery Fund"), is pleased to announce the terms of an all cash offer to be made by it for the entire issued and to be issued share capital of Petroceltic International plc ("Petroceltic" or the "Company") other than the Petroceltic Shares in the beneficial ownership or control of Worldview International Management Limited SEZC ("Worldview") and/or any of the Worldview Funds.

Sunny Hill is a private exempted company, incorporated in the Cayman Islands with limited liability, recently established specifically for the purposes of making the Offer, and wholly owned by the Economic Recovery Fund. Worldview is the discretionary manager of the Worldview Funds. As at the date of this announcement, Worldview, as discretionary manager of the Worldview Funds, controls approximately 29.6 per cent. of the existing issued share capital of Petroceltic.

Sunny Hill, Worldview and the Worldview Funds are joint offerors for the purposes of the Irish Takeover Rules.

   2          The Offer

Under the terms of the Offer, Petroceltic Shareholders will be entitled to receive:

3 pence in cash for each Petroceltic Share

The Offer values the entire issued ordinary share capital of Petroceltic at approximately GBP6.42 million and the issued ordinary share capital of Petroceltic beneficially owned, as at the date of this announcement, by persons other than the Worldview Funds, at approximately GBP4.52 million.

(MORE TO FOLLOW) Dow Jones Newswires

February 26, 2016 02:02 ET (07:02 GMT)

The directors of Sunny Hill believe that the value of the equity in Petroceltic is close to zero, given the parlous financial position of the Company. However, as an incentive to Petroceltic Shareholders to accept the Offer, in order to allow Sunny Hill and Worldview to accelerate addressing the Company's indebtedness issues, Sunny Hill is prepared to offer 3 pence, in cash, per Petroceltic Share. The directors of Sunny Hill have a particular concern with regard to the Company's precarious, and worsening, financial position, particularly with regard to the form, structure and level of the Company's indebtedness to the Banking Syndicate and the stream of short term repayment waivers that the Company has had to seek from the Banking Syndicate to prevent Petroceltic defaulting on the Senior Bank Facility.

The Offer provides an opportunity for Petroceltic Shareholders to realise their investment in full and in cash. The Offer Price per Petroceltic Share represents a discount of approximately:

-- 83.3 per cent. to the Closing Price of 18.0 pence per Petroceltic Share on 25 February 2016, being the last trading day prior to the date of this announcement;

-- 73.9 per cent. to the Closing Price of 11.5 pence per Petroceltic Share on 21 January 2016, being the last trading day prior to the date of the Possible Offer Announcement; and

-- 89.4 per cent. to the Closing Price of 28.375 pence per Petroceltic Share on 22 December 2015, being the last trading day prior to the date of the commencement of the Offer Period.

The Offer will extend to all Petroceltic Shares unconditionally allotted or issued on the date of the Offer other than the Petroceltic Shares in the beneficial ownership or control of Worldview and/or any of the Worldview Funds, together with any further such Petroceltic Shares which are unconditionally allotted or issued (including pursuant to the exercise of options or the vesting of share awards, pursuant to the Petroceltic Share Schemes) while the Offer remains open for acceptance or until such earlier date as Sunny Hill may, subject to the Irish Takeover Rules, decide. The Offer will not extend to any Petroceltic Shares which are cancelled after the date the Offer is made or which are held, or become held, as treasury shares.

The Petroceltic Shares to be acquired by Sunny Hill pursuant to the Offer will be acquired fully paid-up and free from all liens, charges, encumbrances, equitable interests, options, rights of pre-emption and any other third party rights or interests of whatsoever nature and together with all rights attaching to them on or after the date of this announcement, including, without limitation, voting rights and the right to receive and retain, in full, all dividends and other distributions (if any) declared, made or paid or any other return of capital (whether by reduction of share capital, share premium account or otherwise) made, or effected, on or after the date of this announcement. Sunny Hill reserves the right, subject to the consent of the Irish Takeover Panel (if required), to reduce the Offer consideration through an appropriate mechanism in the event that any such dividends, distributions or return of capital are made.

The Offer will be subject to the conditions and further terms set out or referred to in Appendix I to this announcement, and subject to the further terms to be set out in full in the Offer Document and the Form of Acceptance, when issued.

Given the financial position of the Company, Sunny Hill draws Petroceltic Shareholders' particular attention to the conditions set out in paragraph (2)(b)(Default under Debt Facilities), paragraphs 2(c) and (d) (Insolvency Steps and Proceedings) and paragraph 2(e) (Acquisitions and Disposals) in Appendix I. The Offer is being made on the basis that, as and when the Offer becomes unconditional in all respects, the principal assets of the Petroceltic Group will be materially the same as they are at the date of this announcement (and in particular will comprise the interests in the West Dikirnis, West Khilala and South Damas fields and other producing assets in Egypt and Bulgaria, exploration assets in Italy and the Ain Tsila development project in Algeria). Sunny Hill regards the occurrence of any event pursuant to which such assets would, or may, not be owned by the Petroceltic Group, including, but not limited to, a breach of the conditions in paragraph (2)(b) (Default under Debt Facilities), paragraphs 2(c) and/or (d) (Insolvency Steps and Proceedings) and/or paragraph 2(e) (Acquisitions and Disposals) in Appendix I, to be of material significance to Sunny Hill in the context of the Offer.

   3          Background to and reasons for the Offer

Sunny Hill is undertaking the Offer primarily to protect the Worldview Funds' existing investment in Petroceltic, having been long term shareholders since November 2011.

Worldview has been in dispute, initially in private, and subsequently in the public domain, with the management of Petroceltic regarding the Company's strategic direction for over eighteen months and has taken a number of actions in pursuit of reaching an agreement with the Petroceltic Board and the Company's management.

Such actions have included, inter alia, meetings and correspondence (both public and private) with Petroceltic's management, to propose the adoption of a new strategy for the Company's assets commensurate with Petroceltic's financial position and the depressed oil price environment, and the requisitioning of extraordinary general meetings to achieve strategic and Board changes.

However, Worldview has been unable to agree a way forward with the existing Petroceltic Board and management and has also been unable to mandate the Petroceltic Board to undertake changes to the Company's strategic direction via extraordinary general meetings.

Accordingly, in order to seek to protect the Worldview Funds' sizeable existing investment in Petroceltic, it has determined that the best option available both for Worldview and Petroceltic Shareholders as a whole, is for Sunny Hill to make a full cash Offer to Petroceltic Shareholders to enable the other remaining Petroceltic Shareholders to exit from their investment.

Worldview has been in discussions with the Board of the Company, regarding a potential injection of capital into Petroceltic by Worldview, since October 2015, but has been unable to agree terms with the Petroceltic Board. Since January 2016, these discussions have effectively become tripartite, with the involvement of representatives of the providers of the Senior Bank Facility and, whilst, this has improved the quality and progress of the discussions, the parties remain some way apart.

Consequently, Worldview felt that, in order to protect the Worldview Funds' existing investment in Petroceltic in line with its fiduciary duties, it needed to be in control of the Company and, therefore, it has, via Sunny Hill, made this all cash Offer direct to Petroceltic Shareholders.

Accordingly, this Offer affords each Petroceltic Shareholder, regardless of the quantum of their investment, the opportunity to exit from Petroceltic, in full, for cash.

The directors of Sunny Hill believe that the value of the equity in Petroceltic is close to zero, given the parlous financial position of the Company. However, as an incentive to Petroceltic Shareholders to accept the Offer, in order to allow Sunny Hill and Worldview to accelerate addressing the Company's indebtedness issues, Sunny Hill is prepared to offer 3 pence in cash per Petroceltic Share. The directors of Sunny Hill have a particular concern with regard to the Company's precarious, and worsening, financial position, particularly with regard to the form, structure and level of the Company's indebtedness to the Banking Syndicate and the stream of short term repayment waivers that the Company has had to seek from the Banking Syndicate to prevent Petroceltic defaulting on the Senior Bank Facility.

As set out in the Company's unaudited interim results announcement of 30 September 2015, the fair value of the amount drawn down and outstanding pursuant to the Petroceltic Group's Senior Bank Facility as at 30 June 2015 was approximately US$197 million, with net debt of US$184 million.

Furthermore, a combination of, inter alia, certain adjustments to reserves and the drop in oil prices had given rise to the requirement for the Petroceltic Group to make material repayments which, as at 30 September 2015, the Petroceltic Group had not been in a position to satisfy, as well as other potential breaches to the covenants of its Senior Bank Facility.

Worldview notes that since the release of its Interim Results, the Petroceltic Group's financial condition has continued to deteriorate as evidenced by the financing update set out in the Company's announcement of 23 December 2015.

This update revealed that the Petroceltic Group had yet to satisfy the abovementioned material repayment obligations or remedy other breaches to the covenants of its Senior Bank Facility, which is secured over substantially all the assets of the Petroceltic Group, necessitating the receipt of various waivers from the Banking Syndicate with the most recent waiver extending to 4 March 2016.

Furthermore, as at 23 December 2015, the amounts outstanding under the Senior Bank Facility had increased to US$217.8 million with conditional financial support being sought from the Banking Syndicate, in the form of a limited advance of new funds, to provide short term liquidity whilst the Company undertakes a strategic review process. Sunny Hill believes that it is highly probable that the quantum of the amounts outstanding under the Senior Bank Facility will have increased further since that date and requests that the Company provides the market with an update as to the current position.

(MORE TO FOLLOW) Dow Jones Newswires

February 26, 2016 02:02 ET (07:02 GMT)

In addition, the announcement of 23 December 2015 stated that, in the event that further funding cannot be secured, there is a material risk that the Banking Syndicate may withdraw their financial support and/or require immediate repayment of all amounts outstanding, which the Company would not be in a position to effect.

Even if the Company was ultimately able to restructure the indebtedness owing to the Banking Syndicate, Sunny Hill believes that the Company would still have to raise significant capital from third parties to fund its Ain Tsila development project in Algeria. Furthermore, given the indebtedness of the Company, Sunny Hill believes that it is probable that such financing would have to be in the form of equity, or quasi equity, further diluting those Petroceltic Shareholders who are unable to participate in such financings.

Sunny Hill would note that the Banking Syndicate has now had to provide the Company with a number of waivers of repayments due under the Company's Senior Bank Facility, dating back to at least June 2015, with the latest waiver, granted for a period of only 14 days, expiring on Friday 4 March 2016.

Accordingly, the Sunny Hill directors believe that such circumstances would likely lead to the Company being forced to commence insolvency proceedings, which Sunny Hill believes would then result in Petroceltic Shareholders, including the Worldview Funds, potentially losing all of their existing investment in Petroceltic.

Worldview believes that, absent an event leading to a revitalised and strengthened senior management team, reformed strategy and reduced cost base, Petroceltic will remain in a very exposed condition and would note the travails affecting other oil and gas companies with significant indebtedness.

   4          Information about Petroceltic

Petroceltic is an upstream oil and gas exploration and production company, focused on North Africa and the Mediterranean and Black Sea regions. Petroceltic is an Irish registered public limited company, whose ordinary shares are listed on the AIM market of the London Stock Exchange and the ESM market of the Irish Stock Exchange. Petroceltic has production, exploration and development assets in Algeria, Egypt, Italy and Bulgaria.

For its latest financial year ended 31 December 2014, the Petroceltic Group reported total revenue of US$157.2 million (2013: US$196.7 million) and a loss before taxation of US$272.0 million (2013: US$4.5 million). As at 31 December 2014, total assets were US$641.8 million (2013: US$922.5 million) with net assets of US$329.9 million (2013: US$510.9 million) and net debt of US$153 million (2013: US$246 million). For the half year ended 30 June 2015, Petroceltic generated total revenue of US$38.0 million (2014: US$96.3 million) and a loss before taxation of US$23.3 million (2014: US$48.5 million). Net debt as at 30 June 2015 was US$184 million (2014: US$153 million).

The total number of Petroceltic Shares in issue as at 25 February 2016 (the latest practical date prior to this announcement) was 214,094,301. The market capitalisation of Petroceltic, based on the mid-market price of a Petroceltic Share of 18 pence at the close of business on 25 February 2016 (the latest practicable date prior to this announcement), was approximately GBP38.5 million.

If the Offer becomes, or is declared, wholly unconditional, Sunny Hill together with the Worldview Funds will become the beneficial owners of, at least, a majority of the Petroceltic Shares. Worldview, as the discretionary manager of the Worldview Funds will control such shares.

   5          Information about Sunny Hill, Worldview and the Worldview Funds 
   5.1       Sunny Hill

Sunny Hill is a private exempted company incorporated in the Cayman Islands with limited liability on 21 January 2016 under registration number MC-307821. It was established by the Economic Recovery Fund specifically for the purposes of making the Offer. Sunny Hill's current issued share capital consists of one share of US$1.00 which is held by the Economic Recovery Fund. Sunny Hill is to be funded for the purposes of the Offer by way of a loan from the Economic Recovery Fund, further details of which are set out in section 6 below.

Sunny Hill has no operations and has not traded since its date of incorporation. It has paid no dividends and has not entered into any obligations other than in connection with the Offer and the financing of the Offer. The directors of Sunny Hill are Mr Angelo Moskov and Mr Umesh Mittal. Further information on Sunny Hill will be set out in the Offer Document.

   5.2       Worldview and the Worldview Funds

Worldview is a private investment management firm incorporated in the Cayman Islands on 13 April 2011 with registered number MC-254862, with associated operations in the United Kingdom and the United States. Worldview's principal focus is the pursuit of a range of investment opportunities in Central and Eastern Europe, South Eastern Europe, Russia and other FSU countries, Central Asia and Africa across a variety of asset classes.

Worldview is the sole discretionary manager and investment adviser to a range of funds including the EHS International Master Fund, the Special Ops Master Fund, the Economic Recovery Fund and the Special Sits Fund. Worldview also manages client accounts on a discretionary basis. The Worldview Group was founded and is currently led by Mr Angelo Moskov who is the majority ultimate beneficial owner of the management group's parent company and therefore controller of the Worldview Funds.

Worldview Economic Recovery Fund

The Economic Recovery Fund is an exempted company incorporated in the Cayman Islands on 3 October 2013 with registered number MC-281575. Its investment objective is to pursue and capitalise on a range of economic recovery investment opportunities in Southern and Eastern Europe, Russia and CIS, Africa and other emerging markets. It seeks to achieve its investment objective by investing directly.

The Worldview Funds with existing beneficial interests in Petroceltic are:

 
           Worldview Fund                                    Shareholding                Percentage of 
                                                           in Petroceltic                Petroceltic's 
                                                                                       existing issued 
                                                                                         share capital 
           EHS International Master Fund                       29,259,862                        13.7% 
           Special Sits Fund                                      870,000                         0.4% 
           Special Ops Master Fund                             27,400,000                        12.8% 
           Worldview managed client account*                    5,833,000                         2.7% 
           TOTAL:                                              63,362,862                        29.6%

* - Worldview controls a managed client account holding these Petroceltic Shares pursuant to a discretionary investment management agreement.

Further information on Worldview and the Worldview Funds will be set out in the Offer Document.

   6          Financing of the Offer

Sunny Hill is a wholly owned subsidiary of the Economic Recovery Fund which has undertaken to support Sunny Hill with regard to the financing of the Offer. Accordingly, the maximum cash consideration payable to Petroceltic Shareholders pursuant to the terms of the Offer will be financed by the Escrow Funds, under and subject to the terms of the Escrow Agreement, and made available to Sunny Hill pursuant to the Loan Agreement. Further information on the financing of the consideration payable under the Offer will be set out in the Offer Document.

Strand Hanson, joint financial adviser to Sunny Hill, is satisfied that the necessary financial resources are available to Sunny Hill sufficient to satisfy full acceptance of the Offer.

   7          Petroceltic Share Schemes

The Offer will extend to all Petroceltic Shares unconditionally allotted or issued while the Offer remains open for acceptance (including pursuant to the exercise of options or the vesting of share awards pursuant to the Petroceltic Share Scheme(s)) or until such earlier date as, subject to the Irish Takeover Rules, Sunny Hill may decide.

   8          Disclosure of interests and short positions in Petroceltic Shares

As at 25 February 2016, being the latest practicable date prior to this announcement, the Worldview Funds were interested, in aggregate, in 63,362,862 Petroceltic Shares which represent, in aggregate, approximately 29.6 per cent. of Petroceltic's issued ordinary share capital, as set out in section 5.2 of this announcement. In addition, Mr Milan Stojanovic, a Senior Adviser at Worldview Capital Management is interested in 1,045 Petroceltic Shares in a personal capacity, representing approximately 0.00049 per cent. of Petroceltic's issued ordinary share capital.

Save as disclosed above, as at 25 February 2016, being the latest practicable date prior to this announcement, none of Sunny Hill, Worldview or the Worldview Funds or (insofar as the directors of Sunny Hill are aware) any person "acting in concert" with any of Sunny Hill, Worldview or the Worldview Funds had any interest, or held any short position, in any relevant securities of Petroceltic.

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Furthermore, as at 25 February 2016, being the latest practicable date prior to this announcement, none of Sunny Hill, Worldview or the Worldview Funds, or (insofar as the directors of Sunny Hill are aware) any person acting in concert with any of Sunny Hill, Worldview or the Worldview Funds had any arrangement to which Rule 8.7 applies relating to relevant securities of Petroceltic. For these purposes "acting in concert" and "arrangement to which Rule 8.7 applies" have the meanings given to those terms in the Irish Takeover Rules. An "arrangement to which Rule 8.7 applies" includes any indemnity or option arrangement, and any agreement or understanding, formal or informal, of whatever nature, between two or more persons relating to relevant securities which is, or may be, an inducement to one or more of such persons to deal or refrain from dealing in such securities.

9 De-listing and cancellation of admission to trading and re-registration as a private company

Subject to and following the Offer becoming or being declared wholly unconditional and provided sufficient acceptances have been received, Sunny Hill intends to procure that Petroceltic apply for cancellation of the listing and admission to trading of the Petroceltic Shares on both ESM and AIM.

A notice period of not less than 20 Business Days (in London and Dublin respectively) must be given in accordance with both AIM Rule 41 and ESM Rule 41 respectively. Furthermore, save where the London Stock Exchange or the Irish Stock Exchange, as the case may be, agrees otherwise, such cancellation shall be conditional upon the consent of not less than 75 per cent. of votes cast by Petroceltic's Shareholders at a general meeting of Petroceltic.

Any cancellation of the listing and admission to trading of the Petroceltic Shares on ESM and AIM respectively is likely to reduce significantly the liquidity and marketability of any Petroceltic Shares with respect to which the Offer has not been accepted.

   10        Overseas Petroceltic Shareholders

This announcement has been prepared in accordance with Irish law and the Irish Takeover Rules, the AIM Rules, the ESM Rules, the Irish Stock Exchange and the London Stock Exchange.

Overseas Petroceltic Shareholders should inform themselves about and observe any applicable legal or regulatory requirements. If they are in any doubt about their position, they should consult their own professional adviser in the relevant territory.

The distribution of this announcement and the availability of the Offer to persons not resident in, and not citizens of, Ireland may be affected by the laws of the relevant jurisdictions in which they are located or of which they are citizens. Persons who are not resident in, or not citizens of, Ireland should inform themselves of, and observe, any applicable legal or regulatory requirements of their jurisdictions. Overseas Petroceltic Shareholders who are in any doubt regarding such matters should consult an appropriate independent professional adviser in the relevant jurisdiction without delay.

Further details in relation to Overseas Petroceltic Shareholders will be contained in the Offer Document.

   11        General

This announcement does not constitute an offer or an invitation to purchase or sell any securities.

The conditions and certain further terms of the Offer are set out in Appendix I to this announcement. Appendix II to this announcement contains the bases of calculation and sources of certain information used in this announcement. Appendix III sets out definitions and rules of interpretation of certain terms used in this announcement.

The Offer Document will contain full details of the Offer and the expected timetable and will be accompanied by a Form of Acceptance. The Offer Document and the Form of Acceptance will be despatched, as soon as practicable and in any event within 28 days of this announcement, to Petroceltic Shareholders. The Offer Document will also be despatched, for information purposes only, to participants in the Petroceltic Share Schemes.

The Offer will be governed by the laws of Ireland and will be subject to the applicable requirements of the Irish Takeover Rules, the AIM Rules, the ESM Rules, the Irish Stock Exchange, the London Stock Exchange and other applicable laws and regulations.

This announcement constitutes a firm intention to make the Offer pursuant to Rule 2.5 of the Irish Takeover Rules.

Enquiries:

 
 Sunny Hill Limited (enquiries via Hudson     Tel: +44 (0)20 7796 4133 
  Sandler) 
  Angelo Moskov 
 Strand Hanson Limited                        Tel: +44 (0)20 7409 3494 
  (Joint Financial Adviser to Sunny Hill 
  and Worldview) 
  Stuart Faulkner 
  Matthew Chandler 
  James Dance 
 
 Hannam & Partners (Advisory) LLP             Tel: +44 (0)20 7907 8500 
  (Joint Financial Adviser to Sunny Hill 
  and Worldview) 
  Neil Passmore 
  Giles Fitzpatrick 
  Andrew Chubb 
 
 Hudson Sandler                               Tel: +44 (0)20 7796 4133 
  (PR Advisers to Sunny Hill and Worldview) 
  Charlie Jack 
  Emily Dillon

Disclosure requirements under the Irish Takeover Rules

A disclosure table, giving details of the companies in whose "relevant securities" "dealings" should be disclosed can be found on the Irish Takeover Panel's website at www.irishtakeoverpanel.ie.

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Forward-looking statements

No profit forecast or asset valuation

General

Any response in relation to the Offer should be made only on the basis of the information contained in the Offer Document or any other document by which the Offer is made.

APPENDIX I

Conditions and certain Further Terms of the Offer

1. The Offer will be made by Sunny Hill and will comply with the Irish Takeover Rules and, where relevant, the AIM Rules, the ESM Rules and all other applicable rules and regulations of the Irish Stock Exchange and the London Stock Exchange, and will be made subject to the conditions, and on the terms, set out in this announcement and to be set out in the Offer Document. The Offer will also be made on the further terms to be set out in the Offer Document and the Form of Acceptance. The Offer will be governed by the laws of Ireland and subject to the exclusive jurisdiction of the courts of Ireland, which exclusivity shall not limit the right to seek provisional or protective relief in the courts of another state during or after any substantive proceedings have been instituted in Ireland, nor shall it limit the right to bring enforcement proceedings in another state on foot of an Irish judgment.

   2.         The Offer will be subject to the following conditions:

Acceptance Condition

(a) valid acceptances being received (and not, where permitted, withdrawn) by not later than 1.00 p.m. (Irish time) on the initial closing date of the Offer as specified in the Offer Document (or such later time(s) and/or date(s) as Sunny Hill may, subject to the Irish Takeover Rules, decide) in respect of not less than 90 per cent. (or such lesser percentage as Sunny Hill may decide) in nominal value of the Petroceltic Shares Affected, provided that this condition shall not be satisfied unless Sunny Hill shall have acquired or agreed to acquire (whether pursuant to the Offer or otherwise) such number of Petroceltic Shares which, when aggregated with all Petroceltic Shares beneficially owned or controlled by Worldview and/or any of the Worldview Funds, carry more than 50 per cent. of the voting rights then exercisable at a general meeting of Petroceltic;

For the purposes of this condition 2(a):

(i) any Petroceltic Shares which have been unconditionally allotted shall be deemed to carry the voting rights they will carry upon their being entered in the register of members of Petroceltic; and

   (ii)        the expression "Petroceltic Shares Affected" shall mean:

(1) Petroceltic Shares issued or allotted on or before the date of despatch of the Offer Document; and

(2) Petroceltic Shares issued or allotted after that date but before the time at which the Offer closes, or such earlier date as Sunny Hill may, subject to the Irish Takeover Rules, decide (not being earlier than the date on which the Offer becomes unconditional as to acceptances or, if later, the initial closing date),

but excluding any Petroceltic Shares which, on the date of despatch of the Offer Document, are beneficially owned or controlled by Worldview and/or any of the Worldview Funds;

Default under Debt Facilities

(b) save as Disclosed, no member of the Wider Petroceltic Group being in default under the terms or conditions of any facility or agreement or arrangement for the provision of loans, credit or drawdown facilities, or of any security, surety or guarantee in respect of any facility or agreement or arrangement for the provision of loans, credit or drawdown facilities to any member of the Wider Petroceltic Group and, to the extent it has been Disclosed that any member of the Wider Petroceltic Group is in default under any such facility, agreement, arrangement, security, surety or guarantee, and a waiver of breach has been provided, no such waiver having been withdrawn, terminating or otherwise having lapsed or expired;

Insolvency Steps and Proceedings

(c) no member of the Wider Petroceltic Group: (A) taking or agreeing to take, or proposing or announcing any intention to take, any steps; or (B) having any steps taken, or legal or enforcement proceedings taken or instituted, against it:

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for, or in respect of:

               (i)       its winding-up, liquidation, dissolution, examination, administration or reorganisation (or any analogous process or proceedings in any jurisdiction); and/or 
               (ii)      the appointment of a receiver, liquidator, examiner, administrator, administrative receiver, trustee or similar officer over all, or any part of its assets and/or revenues (or any analogous person in any jurisdiction in which any member of the Wider Petroceltic Group is incorporated or carries on any business),

(including, for the avoidance of doubt, pursuant to, or otherwise arising as a consequence of, the breaches of the Company's senior bank facility which have been Disclosed);

(d) without prejudice to paragraph 2(c), no receiver, trustee or similar officer (or any analogous person in any jurisdiction in which any member of the Wider Petroceltic Group is incorporated or carries on any business) being appointed over all, or any part, of the assets and/or revenues of any member of the Wider Petroceltic Group by any third party (including pursuant to a breach of the Company's senior bank facility and any associated security over the assets and/or revenues of any member of the Wider Petroceltic Group);

Acquisitions and Disposals

(e) save as Disclosed and save for intra-Petroceltic Group transactions, no member of the Wider Petroceltic Group taking or agreeing to take, or proposing or announcing any intention to take, at any time after the date of this announcement, any merger, demerger, reconstruction, amalgamation, scheme or (except in the ordinary and usual course of trading) the acquisition or disposal of any assets, business, shares, undertaking, body corporate or partnership (or of any interest in the foregoing);

Notifications, Filings and Authorisations

(f) all notifications and filings which are necessary or are considered appropriate by Sunny Hill (acting reasonably) having been made, all necessary waiting and other time periods (including any extensions of such waiting and other time periods) under any applicable legislation or regulation of any relevant jurisdiction having expired, lapsed or been terminated (as appropriate) and all statutory or regulatory obligations in any relevant jurisdiction having been complied with in each case in connection with the Offer or the acquisition or proposed acquisition of any shares or other securities in, or control or management of, Petroceltic or any other member of the Wider Petroceltic Group by any member of the Worldview Group or the carrying on by any member of the Wider Petroceltic Group of its business;

(g) all authorisations, orders, recognitions, grants, consents, clearances, confirmations, licences, permissions or approvals ("Authorisations") which are necessary in any relevant jurisdiction for or in respect of the Offer or the acquisition or proposed acquisition of any shares or other securities in, or control or management of, Petroceltic or any other member of the Wider Petroceltic Group by Sunny Hill or any other member of the Worldview Group or the carrying on by any member of the Wider Petroceltic Group of its business having been obtained, in terms and in a form satisfactory to Sunny Hill (acting reasonably), from all appropriate Government Authorities (as defined below) or from any persons or bodies with whom any member of the Wider Petroceltic Group has entered into contractual arrangements in each case where the absence of such Authorisations would be material (in value terms or otherwise) on the Petroceltic Group taken as a whole and all such Authorisations remaining in full force and effect and there being no notice in writing from the relevant person or body to any member of the Petroceltic Group of any intention to revoke, suspend, restrict, modify or not to renew any Authorisations where the effect of such revocation, suspension, restriction, modification or non-renewal would be material (in value terms or otherwise) on the Petroceltic Group taken as a whole;

General Regulatory and Anti-Trust/Competition

(h) no Irish, United Kingdom, Algerian, Egyptian, Bulgarian or any other central bank, government or governmental, quasi-governmental, statutory or other regulatory or investigative authority or agency, including courts and other judicial bodies, any competition, anti-trust or supervisory body or other governmental, trade or regulatory agency or body, securities exchange or any self-regulatory body or authority, including any instrumentality or entity designed to act for or on behalf of any of the foregoing, in each case, in any jurisdiction in which a member of the Petroceltic Group currently carries on, or currently proposes to carry on, a material part of the business of the Wider Petroceltic Group (each a "Governmental Authority") having instituted or implemented any action, proceeding, investigation, enquiry or suit or having made, enforced, enacted, issued or deemed applicable to the Offer any statute, regulation or order or having withheld any consent which would or might reasonably be expected to:

(i) make the Offer or its implementation, or the proposed acquisition by Sunny Hill or any other member of the Worldview Group of any shares in, or control of, Petroceltic, or any material assets of Petroceltic, void, illegal or unenforceable or otherwise, directly or indirectly, materially restrain, revoke, prohibit, materially restrict or delay the same or impose materially additional or different conditions or obligations with respect thereto;

(ii) result in a delay in the ability of Sunny Hill, or render Sunny Hill unable, to acquire some or all of the Petroceltic Shares;

(iii) result in or effect any divestiture of, or requirement to hold separate (including by establishing a trust or otherwise), or agree to restrict in any material respect its ownership or operation of, any material portion of the business or assets of Petroceltic, or to enter into any material adverse settlement or consent decree, or agree to any material adverse undertaking, with respect to any material portion of the business or assets of Petroceltic;

(iv) impose any limitation or result in a delay in the ability of Sunny Hill or any other member of the Worldview Group to acquire, or to hold or to exercise effectively, directly or indirectly, all or any rights of ownership of shares, (or the equivalent) in, or to exercise voting or management control over Petroceltic or any subsidiary of Petroceltic or on the ability of any member of the Wider Petroceltic Group to hold or exercise effectively, directly or indirectly, rights of ownership of shares (or the equivalent) in, or to exercise rights of voting or management control over, any material member of the Wider Petroceltic Group;

(v) require any member of Sunny Hill and/or the Worldview Group or any member of the Wider Petroceltic Group to acquire or offer to acquire any shares or other securities (or the equivalent) in, or any interest in, any asset owned by any member of the Wider Petroceltic Group or owned by any third party where the cost of doing so would be material in value terms in the context of the Wider Petroceltic Group taken as a whole;

(vi) impose any limitation on the ability of any members of Sunny Hill and/or the Worldview Group to integrate or co-ordinate its business, or any part of it, with the businesses of any material member of the Wider Petroceltic Group;

(vii) result in any material member of the Wider Petroceltic Group ceasing to be able to carry on business in any jurisdiction;

(viii) cause any member of the Wider Petroceltic Group to cease to be entitled to any authorisation, order, recognition, grant, consent, clearance, confirmation, licence, permission, permit or approval used by it, or proposed to be used by it, in the carrying on of its business in any jurisdiction; or

(ix) otherwise adversely affect the business, operations, profits, assets, liabilities, financial or trading position of any member of the Wider Petroceltic Group;

Certain Matters arising as a result of any Licences, Permits, Arrangements, Agreements etc.

(i) there being no provision of any arrangement, agreement, licence, permit, authorisation, franchise, facility, lease or other instrument to which any member of the Petroceltic Group is a party or by or to which any such member or any of its respective assets may be bound, entitled or subject and which, in consequence of the Offer or the acquisition or proposed acquisition by Sunny Hill or any other member of the Worldview Group of any shares or other securities (or the equivalent) in or control of Petroceltic or any member of the Petroceltic Group or because of a change of control or management of Petroceltic or otherwise, would or would be reasonably expected to result in (in each case to an extent that is material in value terms in the context of the Wider Petroceltic Group taken as a whole):

(i) any monies borrowed by, or any indebtedness or liability (actual or contingent) of, or any grant available to any member of the Wider Petroceltic Group becoming, or becoming capable of being declared, repayable immediately or prior to their or its stated maturity or the ability of any such member to borrow monies or incur any indebtedness being withdrawn or inhibited;

(ii) the creation or enforcement of any mortgage, charge or other security interest wherever existing or having arisen over the whole or any part of the business, property or assets of any member of the Wider Petroceltic Group or any such mortgage, charge or other security interest becoming enforceable;

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(iii) any such arrangement, agreement, licence, permit, authorisation, franchise, facility, lease or other instrument or the rights, liabilities, obligations or interests of any member of the Wider Petroceltic Group thereunder, or the business of any such member with, any person, firm or body (or any arrangement or arrangements relating to any such interest or business) being terminated or adversely modified or any adverse action being taken or any obligation or liability arising thereunder;

(iv) any assets or interests of, or any asset the use of which is enjoyed by, any member of the Wider Petroceltic Group being or failing to be disposed of or charged, or ceasing to be available to any member of the Wider Petroceltic Group or any right arising under which any such asset or interest would be required to be disposed of or charged or would cease to be available to any member of the Wider Petroceltic Group;

(v) any member of the Wider Petroceltic Group ceasing to be able to carry on business, being prohibited from carrying on business or being subject to a restriction imposing a non-compete, exclusivity or similar restrictive covenant on the Wider Petroceltic Group, in each case, in any jurisdiction in which it currently carries on business or in which it proposes to carry on business;

(vi) the value of, or financial or trading position of any member of the Wider Petroceltic Group being prejudiced or adversely affected;

(vii) the creation of any liability or liabilities (actual or contingent) by any member of the Wider Petroceltic Group, other than trade creditors in the ordinary course of business; or

(viii) any liability of any member of the Wider Petroceltic Group to make any severance, termination, bonus, or other payment to any of its directors, members of their families, other officers or advisers;

unless, if any such provision exists, such provision shall have been waived, modified or amended on terms reasonably satisfactory to Sunny Hill and no event having occurred which, under any provision of any agreement, arrangement, licence, permit, authorisation or other instrument to which any member of the Wider Petroceltic Group is a party or by or to which any such member or any of its assets is bound, entitled or subject, is reasonably likely to result in any of the events or circumstances as are referred to in sub-paragraphs (i) to (viii) of this paragraph 2(i);

Certain Events occurring after the date of this Announcement

(j) save as Disclosed, no member of the Petroceltic Group taking or agreeing to take, or proposing or announcing any intention to take, at any time after the date of this announcement, any of the following actions:

(i) any member of the Petroceltic Group issuing, re-issuing from treasury, granting, conferring or awarding or agreeing to issue, re-issue, grant, confer or award any additional shares of any class, or any rights or securities convertible into or exchangeable for, or rights, warrants or options to subscribe for or acquire, any such shares or convertible or exchangeable securities;

(ii) altering the provisions of the memorandum and articles of association of any member of the Petroceltic Group, or the terms of the Petroceltic Share Schemes;

(iii) save for transactions between two or more members of the Petroceltic Group ("intra-Petroceltic Group transactions"), making or authorising, proposing or announcing any change in its loan capital;

(iv) except in the ordinary and usual course of business, entering into or improving, or making any offer (which remains open for acceptance) to enter into or improve, the terms of engagement or appointment of any executive or non-executive director or the terms of the employment contract with any director of Petroceltic or any person occupying one of the senior executive positions in the Petroceltic Group;

(v) issuing, or making any amendments to, any loan capital or debentures or (save in the ordinary course of business and save for intra-Petroceltic Group transactions) incurring any indebtedness or contingent liability;

(vi) entering into, modifying, amending or terminating any commodity hedging agreement, or any other agreement, involving credit exposure for Petroceltic or any member of the Petroceltic Group;

(vii) repaying, repurchasing or redeeming of indebtedness, loan capital, debenture or other liabilities or obligations;

(viii) effecting any share split, share combination, reverse share split or consolidation, share dividend, recapitalisation, or altering the rights attaching to any shares, or effecting any reduction, repayment or cancellation of share capital or undenominated capital or capitalising any reserves;

(ix) effecting or proposing any repurchase, buyback or redemption of any of its shares or securities;

(x) merging with any body corporate, partnership or business, or acquiring, disposing of or transferring any material asset or mortgaging or encumbering any material asset or any material right, title or interest in any asset (including shares and trade investments);

(xi) entering into or varying any contract, transaction, arrangement or commitment or announcing its intention to enter into or vary any contract, transaction, arrangement or commitment (whether in respect of capital expenditure or otherwise) which is either outside the ordinary course of business or is of a long term, onerous or unusual nature or magnitude or which is or would be materially restrictive on the business of any member of the Wider Petroceltic Group;

(xii) entering into or varying any material contract, transaction or arrangement or announcing its intention to enter into or vary any material contract, transaction or arrangement otherwise than (a) any contract, transaction or arrangement in respect of which Petroceltic has, before the date of this announcement, announced its intention to enter into and (b) in the ordinary and usual course of business;

   (xiii)      waiving or compromising any claim that is material (in value terms or otherwise);

(xiv) being unable, or admitting in writing that it is unable, to pay its debts or stopping or suspending (or threatening to stop or suspend) payment of its debts generally or ceasing to carry on all or a substantial part of any business;

(xv) making or agreeing to provide or modify the terms of any share option scheme, incentive scheme, or other benefit relating to the employment or termination of employment of any employee of any member of the Wider Petroceltic Group;

(xvi) making or agreeing to any change to the terms of the trust deeds (including the termination or partial termination of the trusts) constituting the pension schemes established for its directors and/or employees and/or their dependants or to the benefits which accrue, or to the pensions which are payable thereunder, or to the basis on which qualification for or accrual or entitlement to such benefits or pensions is calculated or determined, or to the basis upon which the liabilities (including pensions) of such pension schemes are funded or made, or agreeing or consenting to any change to the trustees involving the appointment of a trust corporation or causing any employee of the Wider Petroceltic Group to cease to be a member of any pension scheme by withdrawing as a participating employer in such pension scheme, or unlawfully terminating the employment of any active member of a pension scheme, or making any employee member of the Wider Petroceltic Group redundant, or exercising any discretion under the provisions governing such pension scheme; or

(xvii) no steps having been taken which are likely to result in the withdrawal, cancellation, termination or modification of any licence, consent, permit or authorisation held by any member of the Wider Petroceltic Group which is necessary for the proper carrying on of its business;

No Adverse Change, Litigation, Regulatory or Similar

   (k)        save as Disclosed:

(i) there not having arisen any adverse change or adverse deterioration in the business, financial condition or results of operations or profits of Petroceltic or any member of the Wider Petroceltic Group (to an extent that is material in value terms in the context of the Wider Petroceltic Group taken as a whole);

(ii) Sunny Hill not having discovered that any published financial, business or other information concerning the Petroceltic Group was at the time it was published: materially misleading, contained a material misrepresentation of fact or omitted to state a fact necessary, in light of the circumstances in which it was made, to make the information contained therein materially misleading;

(iii) no contingent or other liability existing at any time prior to the date of this announcement which would reasonably be expected to have a material adverse effect on the Wider Petroceltic Group taken as a whole; or

(iv) no litigation, arbitration proceedings, prosecution or other legal proceedings to which any member of the Wider Petroceltic Group is or may become a party (whether as plaintiff, defendant or otherwise) having been threatened, announced, implemented or instituted by or against or remaining outstanding against or in respect of any member of the Wider Petroceltic Group, which would reasonably be expected to have a material adverse effect on the Wider Petroceltic Group taken as a whole;

No Discovery of Certain Matters regarding Information, Liabilities and Environmental Matters

   (l)         save as Disclosed, Sunny Hill not having discovered:

(i) in relation to any release, emission, discharge, disposal or other fact or circumstance which has caused or reasonably might impair or harm human health, that any past or present member of the Wider Petroceltic Group has acted in material violation of any laws, statutes, regulations, notices or other legal or regulatory requirements of any Governmental Authority;

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(ii) that there is any material liability, whether actual or contingent, to make good, repair, reinstate or clean up any property now or previously owned, occupied or made use of by any past or present member of the Petroceltic Group or any other property or any controlled waters under any environmental legislation, regulation, notice, circular, order or other lawful requirement of any Relevant Authority (whether by formal notice or order or not) or Governmental Authority or otherwise; or

(iii) that circumstances exist which are likely to result in any material actual or contingent liability to any member of the Wider Petroceltic Group under any applicable legislation referred to in sub-paragraph (ii) above to improve or modify existing or install new plant, machinery or equipment or to carry out any changes in the processes currently carried out;

Distributions, Dividends etc.

(m) save as Disclosed, no member of the Petroceltic Group having recommended, announced, declared, set aside, paid or made or proposed the recommendation, announcement, declaration, setting aside of any payment or making of any dividend, any bonus issue or made any other distribution or payment (whether in cash, securities or other property) other than any dividends from a wholly-owned subsidiary of Petroceltic to another wholly-owned subsidiary of Petroceltic or to Petroceltic;

Frustrating Action

   (n)        after the date of this announcement:

(i) there being no passing of any resolution at a shareholder meeting of Petroceltic to approve any action, possible action, contract, sale, disposal, or acquisition for the purposes of Rule 21 of the Irish Takeover Rules;

(ii) no member of the Petroceltic Group having taken, committed to take or announced that it intends to take or may take any action or commit to take any action which the Irish Takeover Panel determines is, or would be, frustrating action for the purposes of, or within the meaning of, Rule 21 of the Irish Takeover Rules;

3. Subject to the requirements of the Irish Takeover Panel, Sunny Hill reserves the right (but shall be under no obligation) to waive, in whole or in part, all or any of the conditions.

4. Subject to the Irish Takeover Rules and the consent of the Irish Takeover Panel where applicable, the Offer will lapse unless all the conditions set out above are fulfilled or (if capable of waiver) waived or, where appropriate, determined by Sunny Hill in its reasonable opinion to have been or remain satisfied by midnight on the day which is 21 days after the later of the initial closing date of the Offer and the date on which the Offer becomes or is declared unconditional as to acceptances (or such later date as Sunny Hill may, with the consent of the Irish Takeover Panel or in accordance with the Irish Takeover Rules, decide). Sunny Hill shall be under no obligation to waive or treat as fulfilled any of the conditions set out at paragraphs 2(b) to 2(n) inclusive by a date earlier than the date specified above for the satisfaction thereof notwithstanding that any other condition of the Offer may at such earlier date have been waived or fulfilled and that there are at such earlier date no circumstances indicating that any of such conditions may not be capable of fulfilment.

5. Sunny Hill reserves the right, subject to the consent of the Irish Takeover Panel and the approval of Petroceltic, to elect to implement the acquisition of the Petroceltic Shares by way of a scheme of arrangement under Chapter 2 of Part 9 of the Act. In such event, the scheme of arrangement will be implemented on the same terms (subject to appropriate amendments), as far as applicable, as those which would apply to the Offer. In particular, the condition at paragraph 2(a) of this Appendix I will be replaced with the following:

(a) approval at a court meeting or any separate class meeting, if applicable, which may be required by the court (or any adjournment thereof), by a majority in number of the shareholders in Petroceltic present and voting, either in person or by proxy, representing 75 per cent. or more in value of the Petroceltic Shares held by such holders;

(b) the resolutions required to approve and implement the scheme of arrangement and to be set out in a notice of extraordinary general meeting of the holders of the Petroceltic Shares being passed by the requisite majority at such extraordinary general meeting;

(c) the sanction of the scheme of arrangement and confirmation of any reduction of capital involved therein by the court (in both cases with or without modifications, on terms reasonably acceptable to Sunny Hill); and

(d) office copies of the orders of the court sanctioning the scheme of arrangement and confirming the reduction of capital involved therein and the minute required by the applicable section of the Act in respect of the reduction of capital being delivered for registration to the Registrar of Companies and the orders and minute confirming the reduction of capital involved in the scheme of arrangement being registered by the Registrar of Companies in Ireland.

APPENDIX II

Bases of calculations and sources of information

In this announcement, unless otherwise stated, or the context otherwise requires, the following bases and sources have been used:

(i) The value attributed to Petroceltic's existing issued ordinary share capital is based upon the Offer Price and the 214,094,301 Petroceltic Shares in issue on 25 February 2016 (being the latest practicable date prior to the date of this announcement).

(ii) The market prices and average market prices of Petroceltic Shares are stated or calculated using the closing middle market quotations derived from the AIM appendix to the Daily Official List for the particular date(s) and date range(s) concerned.

(iii) The financial information relating to the Petroceltic Group has been extracted or derived (without material adjustment) from Petroceltic's audited consolidated annual report and financial statements for the year ended 31 December 2014 and unaudited consolidated interim financial statements for the six month period ended 30 June 2015. Other information relating to Petroceltic has been extracted or derived from the Company's Regulatory News Service (RNS) announcements and website (www.petroceltic.com).

(iv) All information relating to Sunny Hill and the Worldview Funds has been extracted from published sources and/or provided by persons duly authorised by Sunny Hill and the Worldview Funds.

(v) The maximum cash consideration payable under the Offer is based on the Offer Price and calculated on the basis of the number of Petroceltic Shares which are currently issued and not already in the beneficial ownership or control of the Worldview Funds, being 150,731,439.

APPENDIX III

Definitions and interpretation

The following definitions apply throughout this announcement (including the appendices) unless the context requires otherwise:

 
 "Acceptance Condition"           the condition set out at paragraph 
                                   2(a) of Appendix I to this announcement; 
 "AIM"                            the AIM market of the London Stock 
                                   Exchange; 
 "AIM Rules"                      the AIM Rules for Companies as published 
                                   by the London Stock Exchange (as amended 
                                   from time to time); 
 "Banking Syndicate"              HSBC Bank plc (lead arranger), the 
                                   International Finance Corporation, 
                                   N.B.S.A. Limited and Standard Chartered 
                                   Bank Limited; 
 "Business Day"                   any day not being a Saturday, Sunday 
                                   or public holiday, on which banks 
                                   are normally open for business in 
                                   Dublin or in London as the context 
                                   requires; 
 "Closing Price"                  in respect of any trading day, the 
                                   closing middle-market quotation of 
                                   a Petroceltic Share as derived from 
                                   the AIM appendix to the Daily Official 
                                   List; 
 "Companies Act"                  the Companies Act 2014; 
 "Daily Official List"            the Daily Official List published 
                                   by the London Stock Exchange; 
 "Disclosed"                      means fairly disclosed in: (a) any 
                                   public announcement made via a RIS 
                                   by or on behalf of Petroceltic at 
                                   any time prior to the date of this 
                                   announcement; or (b) the published 
                                   annual report and statutory financial 
                                   statements of Petroceltic for the 
                                   financial year ended 31 December 2014; 
 "Economic Recovery Fund"         Worldview Economic Recovery Fund; 
 "EHS International Fund"         Worldview EHS International Fund; 
 "EHS International Master        Worldview EHS International Master 
  Fund"                            Fund; 
 "Escrow Agent"                   means Citibank N.A. (Citi Private 
                                   Bank, 153 East 53rd Street, 21st Floor, 
                                   New York NY 10022) in its capacity 
                                   as escrow agent under the Escrow Agreement; 
 "Escrow Agreement"               the escrow agreement dated 30 November 
                                   2015, by and between Strand Hanson, 
                                   the Economic Recovery Fund and the 
                                   Escrow Agent, as described in section

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                                   6 of this announcement; 
 "Escrow Funds"                   the funds being held in cash on behalf 
                                   of the Economic Recovery Fund pursuant 
                                   to the terms of the Escrow Agreement 
                                   and subject to Sunny Hill's instructions 
                                   pursuant to the Loan Agreement, for 
                                   the purposes of financing the Offer; 
 "ESM"                            the Enterprise Securities Market of 
                                   the Irish Stock Exchange; 
 "ESM Rules"                      the Enterprise Securities Market Rules 
                                   for Companies as published by the 
                                   Irish Stock Exchange (as amended form 
                                   time to time); 
 "Financial Conduct Authority"    the Financial Conduct Authority of 
  or "FCA"                         the United Kingdom (formerly the Financial 
                                   Services Authority) in its capacity 
                                   as the competent authority for the 
                                   purposes of Part VI of FSMA, including 
                                   its successor(s) from time to time; 
 "Form of Acceptance"             the form of acceptance and authority 
                                   relating to the Offer, which will 
                                   be sent to Petroceltic Shareholders 
                                   with the Offer Document; 
 "FSMA"                           the Financial Services and Markets 
                                   Act 2000 (as amended from time to 
                                   time) of the United Kingdom; 
 "FSU"                            the former Soviet Union; 
 "Governmental Authority"         has the meaning given to such expression 
                                   in paragraph 2(h) of Appendix I; 
 "Interim Results"                Petroceltic's interim results for 
                                   the six months ended 30 June 2015, 
                                   announced by the Company on 30 September 
                                   2015; 
 "Ireland"                        the island of Ireland excluding Northern 
                                   Ireland, and the word "Irish" shall 
                                   be construed accordingly; 
 "Irish Stock Exchange"           The Irish Stock Exchange plc; 
 "Irish Takeover Panel"           the Irish Takeover Panel established 
                                   pursuant to the Irish Takeover Panel 
                                   Act 1997; 
 "Irish Takeover Rules"           the Irish Takeover Panel Act 1997, 
                                   Takeover Rules 2013; 
 "Loan Agreement"                 the intra group loan agreement dated 
                                   25 February 2016, by and between the 
                                   Economic Recovery Fund and Sunny Hill, 
                                   pursuant to which Sunny Hill can instruct 
                                   the Economic Recovery Fund, to issue 
                                   the relevant instructions to the Escrow 
                                   Agent to release monies from the Escrow 
                                   Funds as due under the Offer; 
 "London Stock Exchange"          London Stock Exchange plc, a public 
                                   company incorporated in England and 
                                   Wales under number 2075721, together 
                                   with any successors thereto; 
 "Northern Ireland"               that part of the United Kingdom known 
                                   as Northern Ireland, which consists 
                                   of the counties of Antrim, Armagh, 
                                   Derry, Down, Fermanagh and Tyrone 
                                   located on the island of Ireland; 
 "Offer"                          the cash offer to be made by Sunny 
                                   Hill for the entire issued and to 
                                   be issued share capital of Petroceltic 
                                   other than Petroceltic Shares in the 
                                   beneficial ownership or control of 
                                   Worldview and/or any of the Worldview 
                                   Funds on the terms and subject to 
                                   the conditions set out in this announcement 
                                   and to be set out in the Offer Document 
                                   and the Form of Acceptance, and where 
                                   the context so requires, any subsequent 
                                   revision, variation, extension or 
                                   renewal of such offer; 
 "Offer Document"                 the formal document to be sent to 
                                   Petroceltic Shareholders (other than 
                                   certain Overseas Petroceltic Shareholders) 
                                   containing the full terms and conditions 
                                   of the Offer; 
 "Offer Period"                   means the "offer period" (as defined 
                                   in the Irish Takeover Rules) relating 
                                   to Petroceltic which commenced on 
                                   23 December 2015; 
 "Offer Price"                    the price of 3 pence in cash per Petroceltic 
                                   Share to be offered by Sunny Hill 
                                   under the terms of the Offer; 
 "Overseas Petroceltic            Petroceltic Shareholders who are resident 
  Shareholders"                    in, or nationals or citizens of, jurisdictions 
                                   outside Ireland or who are nominees 
                                   of, or custodians, or trustees for, 
                                   Petroceltic Shareholders who are citizens, 
                                   residents or nationals of countries 
                                   other than Ireland; 
 "Petroceltic" or the "Company"   Petroceltic International plc, a public 
                                   limited company incorporated under 
                                   the laws of Ireland with registered 
                                   number 101176, and whose registered 
                                   office is at 3 Grand Canal Plaza, 
                                   Grand Canal Street Upper, Dublin 4, 
                                   Ireland; 
 "Petroceltic Board"              the board of directors of Petroceltic; 
 "Petroceltic Group"              Petroceltic, together with every company 
                                   or body corporate which is a subsidiary 
                                   or subsidiary undertaking, from time 
                                   to time, of Petroceltic; 
 "Petroceltic Option Holders"     the holders of options to subscribe 
                                   for Petroceltic Shares pursuant to 
                                   the Petroceltic Share Schemes; 
 "Petroceltic Shareholders"       the holders of Petroceltic Shares; 
 "Petroceltic Shares"             the ordinary shares of EUR0.3125 each 
                                   in the capital of Petroceltic; 
 "Petroceltic Shares Affected"    has the meaning given to that term 
                                   in paragraph 2(a) of Appendix I to 
                                   this announcement; 
 "Petroceltic Share Schemes"      the Petroceltic share option schemes 
                                   in place as disclosed in Petroceltic's 
                                   audited consolidated annual report 
                                   and financial statements for the year 
                                   ended 31 December 2014 or otherwise; 
 "Possible Offer Announcement"    the announcement of 22 January 2016, 
                                   released by Worldview, via Worldview 
                                   Capital Management, regarding a possible 
                                   offer for the entire issued and to 
                                   be issued share capital of Petroceltic, 
                                   in accordance with Rule 2.4 of the 
                                   Irish Takeover Rules; 
 "Restricted Jurisdiction"        any jurisdiction where local laws 
                                   or regulations may result in a significant 
                                   risk of civil, regulatory or criminal 
                                   exposure if information is sent, or 
                                   made available, to Petroceltic Shareholders 
                                   in that jurisdiction; 
 "Senior Bank Facility"           the senior secured facility provided 
                                   by the Banking Syndicate to the Petroceltic 
                                   Group in April 2013; 
 "Soviet Union"                   the Union of Soviet Socialist Republics 
                                   which was dissolved on 26 December 
                                   1991; 
 "Special Ops Fund"               Worldview Special Opportunities Fund; 
 "Special Ops Master Fund"        Worldview Special Opportunities Master 
                                   Fund; 
 "Special Sits Fund"              Worldview Special Situations Fund; 
 "Strand Hanson"                  Strand Hanson Limited, the joint financial 
                                   adviser to Sunny Hill and Worldview; 
 "Sunny Hill"                     Sunny Hill Limited, a private exempted 
                                   company, incorporated in the Cayman 
                                   Islands with limited liability with

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