Sirius Petroleum : Half Year Report for the six month period ended 30 June 2018

28 September 2018

Sirius Petroleum Plc.

("Sirius" or the "Company")

Half Year Reportfor the six month period ended 30 June 2018

Sirius Petroleum (AIM: SRSP), the Nigeria focused oil and gas exploration and development company, announces unaudited results for the six-month period ended 30 June 2018.

Enquiries

Sirius Petroleum plc	[phone]
Bobo Kuti, Chief Executive	www.siriuspetroleum.com
Mark Henderson, Chief Financial Officer
Cantor Fitzgerald Europe	[phone]
David Porter/Nick Tulloch
Gable Communications	[phone]
John Bick	Email:s​[e-mail]
Half Year Statement

The interim results for the six month period ended 30 June 2018 reflect the costs incurred during the period to continue to build the operational Ororo infrastructure, funding the contracted operation team and planning work on the Ororo Field, in collaboration with our Technical Advisors, and our Nigerian partners, Owena Oil & Gas Limited and Guarantee Petroleum Company Limited, and our London and Nigerian operations.

The operating loss in the half year amounted to $3,003,000, an increase of $2,040,000 on the six months to 30 June 2017 operating loss of $963,000 (year to 31 December 2017: $2,147,000) giving a loss per share of 0.08 cents (30 June 2017: 0.04 cents loss per share, 31 December 2017: 0.09 cents loss per share).

Group Strategy

The Board continues to appraise opportunities to farm into or acquire high quality assets located in major proven complexes leveraging on the Group's arrangements with its range of operational and asset funding partners.

Nigeria continues to present an attractive investment proposition for inward investment institutions, evidenced by the range of prospective debt funding partners we have consulted with during the period, particularly against the backdrop of the region's history of delivering strong levels of operational cash flows, referenced by consultants Wood Mackenzie, stating that contractors operating in the country have been cash flow break even or better in every year since 1975 and goes on to say that they have generated some US$100 billion in net cash flow.

We also concur with further industry analysis that points to an improving economic and political environment in-country, evidenced by the approval of the National Gas Policy in 2017 and more recently,whilst the Senate approval of the Petroleum Industry Bill (PIB) was an affirmative step. The PIB has subsequently been sub-divided into four Bills as follows: Petroleum Industry Governance Bill (PIGB), Petroleum Industry Administration Bill (PIAB), Petroleum Industry Fiscal Bill (PIFB) and Petroleum Host Community Bill (PHCB) have now gone through a second reading in Parliament's upper chamber. Whilst the expectation appears to be that the bills will be enacted in 2018, the progress made to date represents significant strides in the stature of the resulting regulatory environment for the industry. We believe this can only enhance a climate that encourages increasing levels of inward investment into the Nigerian E&P sector whether that is into existing assets, working with indigenous co-owners, or through the next proposed marginal bid round, which was originally expected to take place earlier in 2018. Regardless of timing, which will ultimately be appropriately prescribed by the Department of Petroleum Resources, we believe that Sirius will be well positioned alongside indigenous partners to participate in the next marginal round.

The development of the Ororo Field is the first of the Company's marginal field developments, in line with the Group's strategy to target proven opportunities and maximize hydrocarbon production and recovery from proven discovered assets in Nigeria. The company's strategy remains focused on appraising shallow water offshore areas where Sirius can also realise upside potential for all stakeholders in potential assets through appraisal and development activities.

Ororo - OML 95

The Ororo-2 well is planned to penetrate all of the D sands with the top three sands (D1, D2 and D3) being sampled and pressure tested. The objectives of the tests are to determine GOCs, the pressure regimes, fluid compositions, and in situ gasoil ratios to gain confidence for the full field development.

In its Competent Persons Report ("CPR"), Rockflow Resources Limited ("Rockflow") has estimated that the Ororo-2 well will target a total stocktank oil initially in place ("STOIIP") of 2.98 mmbbls in the G sands within the Ororo Field (at a midcase scenario). Drilling of the Ororo-2 well is expected to take approximately 45 days from mobilisation of the drilling rig to the Ororo-2 site.

During the extended well testing ("EWT") phase, the Ororo-2 well is expected to initially produce into a temporary well test production facility mounted on a barge. Hydrocarbon production is expected to be treated (degassing and dehydration) to standard specifications for shuttle tanker transportation via the production facility and barge. Separate oil storage capacity is expected to be provided on the barge to store up to 10 days' production (approximately 50,000 bbls).

As originally stated in the Admission document sent to shareholders in November 2017, following completion of the Ororo-2 well and conditional on further funding being obtained, the Ororo-2 drilling rig is intended to proceed to drill the Ororo-3 well, which is proposed to target the D sand reservoir sequence.

The Company has today made a brief announcement updating shareholders on the current rig status for the Ororo field drilling programme due to commence in Q4 2018.

Corporate Governance Update

Sirius Petroleum has also recently updated the Corporate Governance practices of the Company in line with Quoted Company Alliance guidelines. See the Company's website at:w​ww.siriuspetroleum.com.​

Board and Management Team

During the period there were no changes to the Board and Senior Management composition.

Finance

During the period the Company continued to progress the proposed development debt funding discussions with a number of international financial institutions. This process is being led by Reyl et Cie, in relation to development of the Ororo field as has been previously announced.

Outlook

During the first half of year and to date the shore-based work streams have continued in association with the Group's operational partners to make all available resources available for the commencement of the Ororo development programme, pending the availability of a rig to commence drilling in 2018 at Ororo-2.

In line with our strategy we are continuing to appraise assets with production growth, appraisal and exploration potential.

We will continue to work towards delivering on the Company's strategy, to build a portfolio of assets with like minded asset owners where we can match development capital to enable good near term production and build solid development potential and appraisal prospects.

J Pryde

Chairman

O Kuti

Chief Executive Officer

28 September 2018

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE PERIOD ENDED 30 JUNE 2018

Note

Unaudited Period ended 30 June 2018

Unaudited Period ended 30 June 2017

Audited

Year ended 31 December 2017

US$'000

US$'000

US$'000

Other income

27

33

59

Share based payments

Other administrative expenses

(1,367) (1,663)

- (996)

(465) (1,741)

Total administrative expensesLoss from operationsFinance costs

Loss before taxation

(3,030) (3,003)

(1)

(996) (2,206)

(963) (2,147)

(29)

(122)

(3,004)

(992)

(2,269)Taxation

2

-

-

-

Loss after taxation and loss attributable to the equity holders of the Company

(3,004)

(992)

(2,269)

Other comprehensive incomeExchange differences on translating foreign operationsTotal comprehensive loss for the period/year

Loss per share

Total basic and diluted (cents per share)

(6)

(3,010)

(0.08)

3

(13)

(1,005)

(0.04)

(36)

(2,305)

(0.09)

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE PERIOD ENDED 30 JUNE 2018

Share capital

Share premium accountShare-ba sed payment reserve

Other reservesExchange reserveRetained earnings

Total equity

US$'000

US$'000

US$'000

US$'000

US$'000

US$'000

US$'000

Balance at 1 January 2017

Issue of share capital Share issue costsTransactions with ownersLoss for the period

Other comprehensive loss for the period

Balance at 30 June 2017

Share issue

Share issue costs Share based payments

Transfer on lapse of share options/warrants

Transfer on repayment of loan fees equity instruments

Transactions with ownersLoss for the period

Other comprehensive income for the periodBalance at 31 December 2017

Share based payments

Transfer on lapse of share options/warrants

Transactions with owners

Loss for the period

Other comprehensive income for the period

Balance at 30 June 2018

8,927 886 - 886 - -

• 25,749 2,596

1,728 (140) 1,588 - -

9,813

27,337

3,397

8,347

• - (468)

- - -- - - - -11 - - - - -

(229)

(36,943) 111

- - - -

• - 2,614

• - (140)

-(992) (992)

(13) (13)

-

2,596

(242)

11

-- - 465

• - (339)

-

-3,397 - -7,879 - -126 - -

13,210

35,216

-

-2,722 1,367

(11)

-

-1,356

- -- -- -13,210

35,216

4,078

- - - -

2,474

(37,935)

1,580

- - - - - - - (23)

(11)

• - 11,744

• - (468)

• - 465

339 11

(11)

- - - -

(265)

350 (1,277)

-(38,862)

-

- 11

-

-11

- - -

- (6)

(3,004)

-(271)

(41,855)

- -

11,741 (1,277)

(23)

12,021 1,367 -

1,367

(3,004)

(6)

10,378