Reabold Resources : Circular to Shareholders - 31 October 2022

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REABOLD RESOURCES PLC

(incorporated in England and Wales under the Companies Act 2006 with registered number 03542727)

Notice of a General Meeting

requisitioned pursuant to section 303 of the Companies Act 2006

to be held at

8th Floor, The Broadgate Tower, 20 Primrose Street, London, EC2A 2EW

on

17 November 2022 at 10:00 a.m.

THE BOARD RECOMMENDS THAT SHAREHOLDERS VOTE AGAINST ALLTHE RESOLUTIONS

AT THE GENERAL MEETING

The formal Notice of the General Meeting of the Company which has been convened for 10:00 a.m. on 17 November 2022 (the "General Meeting"), is set out on page 20 of this document. All references to time in this document shall be to the relevant time in the United Kingdom.

To support the Board, VOTE AGAINST ALL

the proposed Resolutions

Why you should VOTE AGAINST ALL the

proposed Resolutions

1. The Requisitioning Shareholders are opportunistically trying to gain control of Reabold, its operational asset base and its cash without paying a control premium.

1. The Board believes that the Requisitioning Shareholders interests are not aligned with the Company or its wider Shareholders. They are acting in a self-serving manner.
2. The Requisitioning Shareholders are seeking to replace the Board in its entirety without outlining any form of alternative strategy to ensure value for Shareholders.
3. Reabold has delivered on its investment strategy to date and has a plan to maximise value for all shareholders in the future. The Company intends to make a distribution to Shareholders of £4 million and planned replication of Corallian success to enable future distributions.
4. The track record of two of the Proposed Directors includes examples of significant value destruction at listed resource companies where they acted as directors. The other two Proposed Directors have no public company director experience that we are aware of.
5. Should the Requisitioning Shareholders be successful in removing the currently QCA Code compliant board structure, the corporate governance of Reabold could be jeopardised.
6. The Requisition has caused serious and extremely unwelcomed disruption and expense to the Board, the Company and its Shareholders.

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LETTER FROM THE CHAIRMAN

REABOLD RESOURCES PLC

Directors:	Registered Office:
Jeremy Samuel Edelman	The Broadgate Tower
Michael Craig Felton	8th Floor
Marcos Estanislao Mozetic	20 Primrose Street
Sachin Sharad Oza	London
Anthony John Samaha	EC2A 2EW
Stephen Anthony Williams
	31 October 2022
Dear Shareholder,

NOTICE OF REQUISITIONED GENERAL MEETING

The Board considers the resolutions proposed by Pershing Nominees Limited, on behalf of

the Requisitioning Shareholders, to be an opportunistic attempt to gain control of

YOUR company without paying a control premium

The Board recommends Shareholders VOTE AGAINST ALLthe Resolutions at

the General Meeting

1. Introduction

As announced by the Company on 20 October 2022, Reabold received a requisition letter (the "Requisition Letter") from Pershing Nominees Limited ("Pershing"), on behalf of Stephen Pycroft, Napsbury Holdings Ltd, Raglan Road Capital Limited, B Kerr & Keltbray Ltd and K Lagan/M Lagan & Furbs (the "Requisitioning Shareholders"), pursuant to section 303 of the Companies Act, requesting the Board to convene a general meeting of Shareholders.

The Resolutions to be put to Shareholders at the General Meeting comprise the removal of all six of the existing Directors of the Company, the removal of any director appointed to the Company subsequent to the date of the Requisition Letter, and the appointment of four new directors proposed by the Requisitioning Shareholders.

The Board believes that the Requisitioning Shareholders are seeking to gain control of your Company without paying a control premium or providing any detail on its strategy for Reabold. The Board also believes that the Proposed Directors are not appropriate for the Company and include individuals with a track record of value destruction as public company board directors in some instances, or no public board experience that we are aware of.

The purpose of this letter is to provide Shareholders with details of the Resolutions, and explain why the Board strongly believes that these Resolutions are not in the best interests of the Company. The Board unanimously recommends that you VOTE AGAINST ALLthe Resolutions.

PLEASE DO NOT ABSTAIN FROM VOTING - YOUR VOTE IS NEEDED

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A statement from the Board of Reabold:

"The Board has provided the oversight of and support to the current management team which, it believes, over the last five years, has created a portfolio of exciting high impact strategically valuable upstream oil and gas assets, essentially from scratch, during a turbulent time for the sector. The team is now harvesting value from the portfolio while concurrently strengthening it, leaving the Company very well positioned, particularly given the critical need for security of supply of energy in Europe. This valuable portfolio, and the strong position of the Company means that, in the Board's view, the Requisitioning Shareholders are opportunistically seeking to gain control of Reabold, its operational asset base and its cash without paying a control premium to Shareholders. The Board believes that the Requisition has deliberately been timed so that the Requisitioning Shareholders through the Proposed Directors can be in control of the Company at the time of the cash receipts from the sale of Corallian to Shell, should the Resolutions be duly passed.

"It is our belief that a portion of the £12.7 million cash receivable by the Company from the sale of Corallian should be returned to Shareholders and we are today stating our intention to distribute £4 million to Shareholders upon receipt of the second tranche of funds from Shell. The mechanism of this distribution will be determined following due consultation with our Shareholders.

"In the Board's experience, the Proposed Directors, Kamran Sattar and Cathal Friel, have conflicts of interest that are incompatible with being a director of your company. Specifically, Kamran Sattar previously approached Corallian attempting to acquire Corallian's non-Victory licences for £500,000 after Corallian had agreed to sell these assets to Reabold for £250,000. This would have deprived Reabold shareholders of the value we expect to create from these assets. Furthermore, Kamran Sattar, and Cathal Friel (through Raglan Road Capital Limited), have used their ownership of convertible loan notes in Corallian to attempt to enforce legal claims that the Board believes jeopardised the sale of Corallian to Shell and, in doing so, potentially also damaging Reabold's reputation as a credible counterparty.

"We highlight that two of the Proposed Directors have a track record of significant value destruction as public natural resource company directors and that the other two Proposed Directors have no public company director experience at all that we are aware of. Of particular concern to the Board, is that the Proposed Directors have not set out any form of strategy to run the Company or outlined how they plan to create value for Shareholders. The Board is concerned that the Proposed Directors may attempt to act in a way for the benefit of the Requisitioning Shareholders given their significant conflicts of interest.

"Prior to the appointment of the current management team, Reabold had no significant assets. Over the course of the last five years, the Board believes that this management team has built up a highly attractive portfolio of oil and gas assets, has demonstrated its ability to monetise these at the right time and is positioned to deliver significant value to Shareholders in the future - your current Board is best positioned to deliver this."

The Board Recommends that Shareholders VOTE AGAINST ALLResolutions at the General Meeting

The Board believes that the Resolutions being proposed at the General Meeting to be held at 10.00 a.m. on 17 November 2022 at 8th Floor, The Broadgate Tower, 20 Primrose Street, London, EC2A 2EW requisitioned by Pershing on behalf of the Requisitioning Shareholders are NOTin the best interests of the Company and Shareholders as a whole and unanimously recommends that you VOTE AGAINST ALLof the Resolutions at the General Meeting.

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2. Reasons why the Board recommends you VOTE AGAINST ALL the Resolutions

1. The Requisitioning Shareholders are opportunistically seeking to gain control of Reabold, its operational asset base and its cash without paying a control premium to Shareholders
   In line with its duties, the Board would consider any reasonable bona fide offer for the Company by the Requisitioning Shareholders, but the Board will not cede control of the Company without ALL Shareholders being paid an appropriate control premium. The Board believes that the timing of this action is opportunistically linked to the £12.7m cash which is due from the sale of the Company's Corallian assets to Shell.
2. Certain of the Proposed Directors are not aligned with the Company or its Shareholders and we believe are acting in a self-serving and conflicting manner
   On 5 October 2022, the Company announced the successful sale of Corallian to Shell for £32m gross proceeds. As part of the sale of Corallian to Shell, Reabold acquired six attractive appraisal licences from Corallian (the "North Sea Assets"), excluding the Victory asset, for £250,000. The Board believes that the Requisitioning Shareholders wanted control of the North Sea Assets. After Reabold announced its acquisition of the North Sea Assets on 4 May 2022, Kamran Sattar, one of the Proposed Directors, sought to circumvent Reabold's acquisition of the North Sea Assets by offering Corallian £500,000 for these same assets. It is the Board's view that ALL Shareholders should benefit from the value of these assets not just the Requisitioning Shareholders and the Board fears that, if the Requisitioning Shareholders gained control of the Company, the Proposed Directors may continue to behave in a way that benefits their own position to the detriment of the Company and the Shareholders. Such action, in turn, may lead to serious corporate governance deficiencies, which could ultimately jeopardise the Company's suitability for admission to trading on AIM.
   Finally, Kamran Sattar, and Cathal Friel (through Raglan Road Capital Limited), each of whom is a Proposed Director, have used their ownership of convertible loan notes in Corallian to attempt a legal challenge that the Board believes jeopardised the sale of Corallian. Specifically, their claim implied that the conversion price of the Corallian convertible loan should be £1.50 rather than £3.20 (plus accrued interest) per Corallian share. This claim could have resulted in the sale of Corallian to Shell not proceeding and therefore the Company and the Shareholders not realising the benefits of the successful monetisation of Reabold's interest in Corallian.
   The Board believes that the relationship established by the existing Board with Shell will be beneficial to the Company in the medium to long term, and believes the convertible loan note challenge by Kamran Sattar, if successful, would have undermined Reabold's reputation as a trustworthy and credible counterparty in future transactions. If the Proposed Directors' actions described above were successful it would have prevented Reabold from selling Corallian to Shell and would have left Reabold unfunded for drilling at West Newton next year, and of course unable to make the intended distribution to Shareholders.
3. The Requisitioning Shareholders have not set out a strategy for the Company
   The Board notes with alarm that the Requisitioning Shareholders are seeking to replace the Board in its entirety without outlining an alternative strategy for the Company to Shareholders. The Requisitioning Shareholders and the Proposed Directors do not have access to significant non-public technical data on Reabold's assets and have not identified how they plan to run the assets to ensure value generation is achieved for Shareholders.
4. Despite the criticism from the Proposed Directors, the Company has delivered on its investment strategy and has achieved a number of value enhancing deals since 2017. Reabold has a strict investment criteria which has enabled the Reabold management team and Board to build, in its view, a meaningful and growing portfolio of near-term, high growth energy projects
   Reabold's strategy has been to identify low technical risk projects, which can be progressed with a relatively modest amount of capital such that the Company can take the asset to the point of monetisation/value realisation. Reabold can use the proceeds generated from monetisation to reinvest in progressing and growing the portfolio as well as providing a distribution to Shareholders.

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