PetroNor E&P Limited Announces Increase in Indirect Ownership of PNGF Sud to 16.83%, Financing Plans and Equity Investor Meetings

18 February 2021

PetroNor E&P Limited
(“PetroNor” or the “Company”)

PetroNor E&P Limited Announces Increase in Indirect Ownership of PNGF Sud to
16.83%, Financing Plans and Equity Investor Meetings

PetroNor E&P Limited (OSE ticker: “PNOR") is pleased to announce that the
Company's net indirect interest in PNGF Sud, PetroNor’s core asset, will
increase from 10.5% to 16.83% following i) a USD 18 million contingent
acquisition of all of Symero Limited's[1](“Symero”) shares in Hemla Africa
Holding AS (“HAH”) (the “Symero Transaction”), and ii) a court ruling in Congo
related to parts of MGI International S.A.’s (“MGI”) indirect share in PNGF Sud
(the “MGI Ruling”). Symero's shares in HAH represent 29.293% of all issued and
outstanding shares in HAH, and following completion of the Symero Transaction,
the Company will own 100% of all issued and outstanding shares in HAH.

Furthermore, PetroNor announces that it is considering raising USD 50 to 60
million of new equity (the “Contemplated Equity Financing”), whereof USD 32 to
42 million in cash and USD 18 million as in-kind consideration for the Symero
Transaction. The Company has mandated Arctic Securities AS, Pareto Securities AS
and SpareBank1 Markets AS as Joint Managers and Bookrunners to arrange a series
of equity investor meetings and calls commencing on 19 February 2021. Petromal
Sole Proprietorship LLC and related group companies (“Petromal”), the Company’s
main shareholder owning 38.28% of all issued and outstanding shares in the
Company, has committed to subscribe for its pro-rata share of the Contemplated
Equity Financing, representing a subscription of approximately USD 19 to 23
million.

Highlights

• PetroNor’s net indirect interest in its core asset PNGF Sud to increase from
10.5% to 16.83% following the contemplated Symero Transaction and the MGI
Ruling.
• ~60% increase in PetroNor’s PNGF Sud production and reserves with no impact on
overhead costs;
o Net production from PNGF Sud to increase from 2,385 barrels of oil per
day (“bopd”) to 3,850 bopd, based on 2020 average production;
o Net 2P reserves as of Year-end 2020 increasing from 9.9 million to
15.9 million barrels of oil (“mmbbl”);
o Reserves and resources are currently being audited, with update
expected in March 2021. Based on production performance and expanded infill
drilling program, the Company expects an increase in both reserves and
resources.
• Plans to raise USD 50 to 60 million of new equity, whereof approximately USD
37 to 41 million committed through pre-subscription from Petromal and in-kind
consideration to Symero. Post the Contemplated Equity Financing, PetroNor will
be in a robust financial position and fully funded for all sanctioned activities
with significant flexibility to adjust its capital expenditure in a low oil
price environment.

Commenting on the update, Eyas Alhomouz, Chairman of PetroNor E&P Limited, said:

"These are value accretive transactions that materially increase PetroNor's
production, reserves and cash flow. The opportunity to obtain a greater interest
in PNGF Sud is wholly in-line with our stated growth strategy in terms of
getting exposure to more economically robust cash flow and low-risk upside.

PNGF Sud is already the stable foundation of our Company and its therefore an
asset we know intimately well. The asset is operated by Perenco, a leading
operator of mid- and late life assets in emerging markets with a proven track
record of continuous increase in reserves and production and cost reductions to
deliver higher margin barrels.

The transactions represent an exciting development for PetroNor complementing
the other activities within the portfolio that are gathering momentum; notably
the delayed completion of the Aje transaction, and our approval for the Guinea
Bissau transaction. Post completion of these various items, we will have
successfully assembled a diverse portfolio of assets in various stages of
development, giving PetroNor and its shareholders exposure to multiple catalysts
through a fully funded and active work programme that will begin ramping up
later this year.

Our major shareholders have demonstrated firm confidence in the Company, its
strategy and outlook through its commitment to the equity financing, and we look
forward to broadening our shareholder base and wider market appeal through that
process."

Symero Transaction

Subject to certain condition precedents, PetroNor will acquire Symero’s shares
in HAH representing 29.293% of the share capital of HAH, equivalent to a 4.93%
indirect interest in PNGF Sud, for a consideration of USD 18 million to be paid
in-kind through issuance of new shares in PetroNor at a price equivalent to the
price in the Contemplated Equity Financing. Following the Symero Transaction,
PetroNor will own 100% of HAH.

The Symero Transaction is subject to successful completion of the Contemplated
Equity Financing. Furthermore, as the Symero Transaction is a related party
transaction, the transaction is subject to approval by ordinary resolution at an
extraordinary general meeting of the Company (the "EGM"). An ordinary resolution
under the Australian Corporations Act requires approval by simple majority of
those persons attending the meeting (in person, proxy or representative) and
being eligible to vote at the meeting. The EGM is expected to be held on or
about 5 April 2021, following the publication of an independent expert report
(“Expert Report”) as required pursuant to the Australian Corporations Act. The
Expert Report will be attached to the calling notice for the EGM. The
shareholders’ approval required will include an approval in accordance with
Chapter 2E of the Australian Corporations Act of 2001 as a related party
transaction and potentially a separate approval under section 611 item 7 of the
Australian Corporations Act of 2001 to permit an increase in the voting power in
the Company that would exceed the thresholds. As an Australian domiciled
company, PetroNor has been granted an exemption from the Norwegian take-over
rules from the Oslo Stock Exchange.

The Company has obtained voting undertakings for approval of the Symero
Transaction from Petromal, members of the Company's Board of Directors and
executive management, representing 19.90% of the existing shares (193,361,392
shares). While additional voting undertakings cannot be provided for regulatory
reasons, Petromal has further confirmed its strong support of the Symero
Transaction and the Contemplated Equity Financing. As the Symero Transaction is
considered a transaction with related parties, 34.8% of the shareholders are not
eligible to vote.

Subject to shareholder approval and satisfaction of all conditions precedent,
the Symero Transaction is expected to close by end of April 2021.

MGI Ruling

Due to MGI’s breach of covenants under the loan agreement between HAH and MGI,
the commercial court, Tribunal de Commerce de Pointe Noire, in Congo has awarded
HAH 9,900 shares in HEPCO, increasing HAH’s share of HEPCO with 9.9%, equivalent
to PetroNor increasing its indirect interest in PNGF Sud with 1.40% at a cost of
approximately USD 4 million. As per Congolese law, the award can be challenged
in a higher court, and if so the timing of such further appeal and any final
outcome are uncertain.

Impact on PetroNor

The transactions increase the indirect working interest in PNGF Sud from 10.5%
to 16.8% and in PNGF Bis from 14.7% to 23.6%. Following the completion of both
transactions, the Company’s production and reserves will increase 50-60%. The
combined consideration of approximately USD 22 million corresponds to USD
3.7/bbl for the 2P reserves, which compares to an estimated NPV12 of USD 8.2/bbl
at USD 60/bbl.

PetroNor* Pre-transaction Post MGI / Symero
Production rate, bopd 2,644 4,081
2P** reserves, mmbbl 10.1 16.1
2C resources, mmbbl 26.0 30.4

*Production, reserves and resources include PNGF Sud and Aje, whereas the 2C
resources also include PNGF Bis. The Aje acquisition is pending governmental
approval. The license partners on PNGF Sud hold the right to negotiate in good
faith the license terms of PNGF Bis.
**2P reserves according to AGR CPR October 2019, corrected for 2019 and 2020
production (PNGF Sud 9.9 mmbbl) and Company estimate for Aje 2P reserves (0.2
mmbbl).

USD 50 to 60 million Contemplated Equity Financing

PetroNor has mandated Arctic Securities AS, Pareto Securities AS and SpareBank1
Markets AS as Joint Managers and Bookrunners to arrange a series of equity
investor meetings and calls commencing on 19 February 2021.

Subject to, inter alia, market conditions and investor feedback, an equity
private placement of approximately USD 50 to 60 million may follow. The net
proceeds from the Private Placement will be used to finance drilling of infill
wells and other increased oil recovery initiatives on PNGF Sud and general
corporate purposes, as well as to issue the consideration shares for the Symero
Transaction. Further, the Company would through the Contemplated Equity
Financing seek to broaden and diversify its shareholder base and increase free
float.

The Company’s largest shareholder, Petromal, has committed to subscribe for its
pro-rata share (38.28%) of the Contemplated Equity Financing, representing a
subscription of approximately USD 19 to 23 million. Additionally, Nor Energy AS,
PetroNor's other cornerstone shareholder, through its 100% ownership in Symero,
is subscribing for USD 18 million in-kind through the Symero Transaction, which
along with Petromal’s commitment totals approximately USD 37 to 41 million of
the Contemplated Equity Financing. The in-kind consideration shares to Symero
are subject to a six-month’s lock-up from the shares are issued.

In the event the Contemplated Equity Financing is not completed, the Company
expects to finance its capital shortfall through i) a ne