Jutal Offshore Oil Services : Entered into Share Subscription Agreement 2017-03-21

Jutal Offshore Oil Service Limited Announced today that On 15 March 2017 (before trading hours), the Company entered into a Subscription Agreement with Sanju Environmental Protection (Hong Kong) Limited and Golden Talent (HK) Technology Company Limited (the 'Subscribers'), pursuant to which, the Company has conditionally agreed to allot and issue, and the Subscribers have conditionally agreed to subscribe for an aggregate of 803,562,111 Subscription Shares (of which Subscriber A has conditionally agreed to subscribe an aggregate of 641,566,556 Subscription Shares, which represent 79.84% of the total Subscription Shares and Subscriber B has conditionally agreed to subscribe an aggregate of 161,995,555 Subscription Shares, which represent 20.16% of the total Subscription Shares) at the Subscription Price of HK$1.2 per Subscription Share.

Upon Completion, the Subscription Shares subscribed by Sanju and Golden Talent, which respectively represent (i) approximately 80.16% and 20.24% of the existing issued share capital of the Company; (ii) approximately 40.0% and 10.10% of the issued share capital of the Company as enlarged by the allotment and issue of the Subscription Shares (assuming there is no change in the issued share capital of the Company other than the issue of the Subscription Shares); and (iii) approximately 38.60%and 9.74% of the issued share capital of the Company as enlarged by the allotment and issue of the Subscription Shares and the exercise in full of the outstanding Share Options and Warrants of the Company.

The Subscription Shares represent (i) approximately 100.40% of the existing issued share capital of the Company; (ii) approximately 50.10% of the issued share capital of the Company as enlarged by the allotment and issue of the Subscription Shares (assuming there is no change in the issued share capital of the Company other than the issue of the Subscription Shares); and (iii) approximately 48.34% of the issued share capital of the Company as enlarged by the allotment and issue of the Subscription Shares (assuming all Share Options and Warrants are exercised in full and there is no change in the issued share capital of the Company other than the issue of the Subscription Shares).

The Directors are of the view that the Subscription represents a valuable opportunity for the Group to bring in a solid strategic investor that is expected to bring business synergies to the Group. The Directors consider that the entering into the Subscription Agreement represents a good opportunity to (i) raise a substantial amount of additional funds for the Company; (ii) improve the financial position and liquidity of the Group; and (iii) provide the Company with the financial flexibility necessary for the Group's future business development and the capability to capture any prospective investment opportunity in the oil and gas sectors as and when it arises. The Directors are confident that the Subscribers will bring in additional resources, technology, know-how and investment opportunities to the Company in the oil and natural gas sector which is beneficial to the Company and the Shareholders as a whole.

Further, with the additional funds from the Subscription to finance its business development, expansion and/or innovations, the Company will be put in a better position to grow. The Directors consider that, the potential for future earnings and the chance to increase the value for the Company will, to a certain extent, outweigh the dilution effect that will occur following the Completion.