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CEO's Quarterly Message

“During Q1 2017 we maintained fairly stable production and sales. Gross (100%) oil production averaged 2,900 bbl/d in Q1 2017 with all production sold via the export pipeline and payments for export sales through the end of March received in full.

 

The acquisition of approximately 2,000 km2 of 3D seismic data covering the AGC license area was completed in January 2017. Fast-track processing has also been completed with full processing and interpretation ongoing and expected to be completed later this year.

 

Our capital program for 2017 and early 2018 is focused primarily on the Zey Gawra field in the Hawler license area. The program includes four further wells at the Zey Gawra field and the recompletion of the Demir Dagh-8 well. We expect to commence drilling of the first new well at Zey Gawra in the coming weeks and we expect this program will provide us with additional  production and cash flow by early 2018 sufficient to sustain our operations and allow us to meet our obligations.

 

We are making significant progress on restructuring our obligations and finalizing our balance sheet recapitalization. During Q1 2017, we reached agreement with AOG with regards to proposed amendments to the balance of the credit facility owed them, we agreed to settle the financial lease obligation related to the Hawler production facilities for significantly less than the expected payments over the remaining life of the lease, we satisfied a significant trade payable with the issuance of common shares, and we are very close to an agreement to restructure the contingent consideration obligation with the vendor of the Hawler license. Importantly, AOG and Zeg Oil and Gas have executed equity subscription agreements to subscribe for Oryx Petroleum shares in consideration for cash and debt extinguishment. The agreed equity subscriptions by AOG and Zeg Oil and Gas are conditioned upon acceptance by the Toronto Stock Exchange, minority shareholder approval, and the restructuring of the contingent consideration obligation related to the acquisition of the Hawler license area on terms acceptable to AOG and Zeg Oil and Gas. The amendment to the terms of the credit facility provided by AOG is also conditioned on acceptance of the Toronto Stock Exchange and approval of minority shareholders. The restructuring of our obligations and the equity subscriptions, if closed, will provide us with the liquidity and financial flexibility needed to execute our capital program.

 

We look forward to finalising our balance sheet recapitalization and implementing our 2017 plans for continued appraisal, development and exploration of our core assets.”