Acquisition of New Issue Shares in LOTOS Exploration and Production Norge AS by Petrobaltic S.A.
Report no. 1/20092008-08-27

The Management Board of Grupa LOTOS S.A. reports that on August 26th 2008 the Management Board of Petrobaltic S.A. resolved to commence the procedure for registration of another share capital increase effected this year at LOTOS Exploration and Production Norge AS (see: Current Report No. 22/2008 of May 19th 2008) and of acquisition of the new issue shares in the company by Petrobaltic S.A. (in which Grupa LOTOS S.A. holds 69% of the shares).

The share capital of LOTOS E&P Norge AS was increased from NOK 40m to NOK 190m. The new shares comprising the increased share capital, whose ggregate par value amounts to NOK 150m, are equal and indivisible, and represent
78.9% of the increased share capital of LOTOS E&P Norge AS. Petrobaltic S.A. treats the shares as a long-term investment.

Petrobaltic S.A. purchased for cash 150 million new issue shares in LOTOS E&P Norge AS. The purchase price for the shares was equal to their par value, i.e. NOK 150m (the equivalent of PLN 62.8m, translated at the mid exchange rate for NOK quoted by the National Bank of Poland for August 26th 2008) and was covered with Petrobaltic's internally-generated funds.

Petrobaltic S.A. and LOTOS Exploration and Production Norge AS are members of the LOTOS Group. LOTOS E&P Norge's core business consists in exploration for and production of crude oil on the Norwegian Continental Shelf. The company's share capital was increased by way of issue of new shares to provide it with additional capital needed for further expansion of its business. Petrobaltic S.A. became an investor in E&P Norge AS as the leading company of the LOTOS Group in the field of exploration and production.

The financial assets acquired in the transaction are considered significant based on the fact that they represent more than 20% of the shares in LOTOS E&P Norge AS.
Legal basis for the publication of this report: Par. 5.1.1 of the Regulation of the Minister of Finance on current and periodic information to be published by issuers of securities, dated October 19th 2005.