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29 January 2015, Limassol, Cyprus


SeaBird Exploration Plc ("SeaBird" or the "Company", with the ticker "SBX on the Oslo Stock Exchange) announces that SeaBird and (i) a  majority of approx 75.7% of its bondholders, (ii) its convertible loan agreement lender, Perestroika AS, (iii) certain of its trade creditors and (iv) its restructuring advisers have reached agreement on the principal terms of a consensual restructuring of the SeaBird group (the "Restructuring") that will (a) facilitate a comprehensive restructuring of the group's balance sheet and (b) provide new funding for the SeaBird group. As previously announced, SeaBird is in default on its existing bonds and loans and certain other of its financial commitments and requires new sources of funds to sustain its operations. Consequently, SeaBird has for several months been in close dialogue with its creditors and other stakeholders in pursuit of new funding, resulting in agreement in principle being reached with several of the SeaBird group's stakeholders with respect to the Restructuring.

The Restructuring comprises, among other things, the following: (i) the issue by the Company of a new 3-year secured bond in two tranches, as further described below ("SBX04") including the subscription by TGS-NOPEC Geophysical Company ASA or any of if its affiliates for USD 5 million in Tranche A of SBX04 (ii) various trade creditors claims against the SeaBird group to be converted into SBX04 or a credit line facility, (iii) approx. USD 16.2 million of the outstanding amount under the SeaBird Exploration Plc Senior Secured Callable Bond Issue 2011/2015 ("SBX03") to be rolled into SBX04 and the remaining approx. USD 64.7 million of SBX03 to be converted into equity at NOK 0.30 per share, (iv) approx. USD 3 million of the Company's convertible loan with Perestroika AS (the "Perestroika Loan") to be rolled into SBX04 and the remaining approx. USD 11.9 million of the Perestroika Loan to be converted into equity at NOK 0.30 per share, (v)  outstanding charter hire for the Munin Explorer, Geo Pacific, Hawk Explorer and Voyager Explorer (the "Charterers") to be partially converted into SBX04 or a credit line facility, partially converted into equity and/or partially written down and the ongoing charter obligations to undergo certain amendments including a reduction in total charter hire of above USD 25,000 per day  yielding an annual pre-tax cash flow improvement of above USD 9 million; (vi)  USD 700,000 of restructuring advisory fees to be rolled into SBX04 and USD 2.8 million of restructuring advisory fees to be converted into equity at NOK 0.30 per share; and (vii) a minimum of USD 8.5 million in new equity (the "New Equity") to be raised from certain investors, at NOK 0.10 per share, (which includes a subscription by SBX03 holders of all monies standing to the credit of an interest service account pledged in favour of SBX03), and where each new share thus subscribed will entitle the subscriber to a three year warrant to subscribe for another share at a subscription price of NOK 0.10 per share.

The Restructuring is subject to a number of conditions, (the "Conditions"), one of which is that a minimum of USD 8.5 million in New Equity must be raised. The Company has received commitments for subscriptions from stakeholders for approx USD 6.5 million of this amount at NOK 0.10 per share, with the remaining approx USD 2 million being guaranteed by a guarantee consortium, with a 2.5% guarantee commission. Of said amounts, Perestroika AS will subscribe for USD 2.5 million, and guarantee USD 1 million. In order to, amongst other things, eliminate the need for use of the guarantee, the Company intends to seek further subscriptions for New Equity (with warrants as described above) for a period from 29 January 2015 to 2 February 2015 at 16:30 CET.

The new SBX04 bond will be a 3-year secured bond issued in two tranches, one Tranche A of USD 5 million carrying a 12% interest p.a. and one Tranche B of USD 24.34 million carrying an interest of 6% p.a., to be secured against certain assets of the SeaBird group.  Interest will be paid quarterly. The first principal payment date will occur two years after the date of settlement of the SBX04, which is expected in Q1 2015, at which time USD 2 million shall be payable on that interest payment date and quarterly on each following interest payment date with a bullet payment to be made on maturity. It is intended that the new SBX04 bond will be listed on the Oslo Stock Exchange.

In order to implement the share issue being undertaken as part of the Restructuring in the most tax efficient and timely manner, which is also the reason the New Equity is being raised as a private placement and not a rights issue, an extraordinary general meeting of the Company ("EGM1") will be convened whereby a new class of shares of the Company bearing certain special and increased rights resulting in 500 times shareholder rights (including voting rights and dividend rights) compared to the ordinary shares of the Company ("New Preference Shares") shall be issued by the Company for a limited period of time. The shares issued as New Equity and the shares to be issued through conversion of debt will be New Preference Shares which will be issued at a price per New Preference Share of 500 times the subscription price per ordinary share (i.e. 500 times NOK 0.1 for New Equity and 500 times NOK 0.3 for shares issued through conversion of debt). 

In order to facilitate the conversion of the New Preference Shares into ordinary shares a second separate extraordinary general meeting ("EGM2") will be convened in which the Company will reduce its authorized and issued share capital through a reduction of the nominal value of its shares from USD 0.10 to USD 0.0001 and the authorized share capital of the Company shall be simultaneously increased to a higher amount to be divided into ordinary shares of USD 0.0001 each, such higher amount to be specified in the notice for EGM2. The New Preference Shares shall be convertible automatically into ordinary shares in the Company at a rate of 1 New Preference Share to 500 ordinary shares of nominal value USD 0.0001 each once the capital reduction is completed after notice periods, required under Cypriot regulations have expired. It is intended that these new ordinary shares will be listed on the Oslo Stock Exchange following conversion and the publication and approval of a listing prospectus for the new equity raised. 

The completion of the Restructuring is subject to the satisfaction of a number of outstanding Conditions, some of which are outside the control of the Company. The Conditions include, amongst other things: (i) the Company must obtain approvals of the Restructuring from the requisite number of shareholders at EGM1, (ii) the Company must obtain approvals of the Restructuring by the requisite number of holders of SBX03 at a bondholders' meeting, (iii) there must be no enforcement action taken by any creditors for any material claim or bankruptcy of any SeaBird group entity, (iv) a minimum of USD 8.5 million in New Equity must be raised and (v) final documentation required to implement the Restructuring, including final documentation on revised terms with trade creditors, must be entered into. There are no guarantees that all conditions for the Restructuring will be fulfilled in an appropriate and/or timely manner.

Attached to this announcement is an investor presentation used for the purpose of the Restructuring.

ABG Sundal Collier Norge ASA, Fearnley Securities AS and RS Platou AS act as financial advisors to the Company. Advokatfirmaet Schjødt AS and Montanios & Montanios act as Norwegian and Cypriot legal counsel to the Company, respectively. 

This information is subject of the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.

For further queries contact:
Dag Reynolds
CEO SeaBird Exploration
Phone: +47 90883737

Nils Haugestad
CFO SeaBird Exploration
Phone: +971 4 427 1700