Corporate Update

Company Accepts a Convertible Loan Note Facility for £1,000,000 and Extension of Previous £20,000,000 Share Subscription Facility

Introduction

Pennpetro (LSE: PPP) is pleased to announce that it has agreed to enter into a Convertible Loan Note Facility with GEM Global Yield LLC SCS ("GEM") for a total of £1,000,000 ("CLNF").

Upon Closing, the Company will be able to draw down £150,000 ("Initial Tranche") by issuing GEM Convertible Loan Notes. Subsequent tranches are subject to certain milestones, including the re-trading of the Company's shares on the London Stock Exchange.

The Company previously entered into a £20,000,000 Share Subscription Facility ("SSF") with GEM which is to be reinstated and extended through June 2028 as part of the terms of the CLNF.

"We are delighted that GEM has continued to support and share our vision for the Company. The new Convertible Loan Note Facility, coupled with the reinstatement of the previous Share Subscription Facility will ensure the Company is able to access the funds it requires for the foreseeable future", commented Stephen Lunn, Chairman of Pennpetro Plc.

The Convertible Loan Note Facility

The term of the Facility is three years, with a zero coupon.

GEM may convert the Initial Tranche into shares of the Company at the lesser of GBP 0.10 per share ("Fixed Conversion Price") or 100% of the average for the three lowest closing bid prices in the 40 days immediately preceding conversion ("Floating Conversion Price"). The Fixed Conversion Price for subsequent tranches will be adjusted upward based on the Company meeting certain milestones.

At maturity the Convertible Loan Notes convert automatically at the lesser of the relevant Fixed Conversion Price or the Floating Conversion Price.

Concurrently with entering into the CLNF, GEM is being awarded 80,000,000 warrants, exercisable at 4p each for a term of 5 years.

Reinstatement of Previous Share Subscription Facility

Under the terms of the CLNF, GEM is reinstating the prior £20,000,000 SSF with the Company and extending it through June 2028. The Company has agreed to meet its obligations under the SSF.

Further information regarding the SSF is set out in the Company's announcement on 2 June 2021.

Use of Proceeds

Proceeds of the CLNF will be used by the Company to finalise the audit for the FY 2024, effect the re-trading of its shares on the London Stock Exchange and to fund possible growth opportunities.

Proceeds of the SSF will be used to finance growth and development of the Company.

About Global Emerging Markets (GEM)

GEM Global Yield LLC SCS ("GEM") is a $3.4 billion alternative investment group that manages a diverse set of investment vehicles focused on emerging markets across the world, having completed over 570 transactions in 70 countries. GEM's investment vehicles provide the group and its investors with a diversified portfolio of asset classes that span the global private investing spectrum. Each investment vehicle has a different degree of operational control, risk-adjusted return, and liquidity profile, providing GEM and its partners with exposure to Small-Mid Cap Management Buyouts, Private Investments in Public Equities (PIPE's) and select venture investments.

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