Impairment loss on investment in YME project
Report no. 15/20142014-08-12

The Management Board of Grupa LOTOS S.A. (the “Company”) announces that it plans to disclose in the consolidated financial statements for H1 2014 an impairment loss of PLN 545m on investment in the YME field, recognised as at June 30th 2014. The estimated effect of the impairment on the consolidated net profit/loss for H1 2014 will be PLN 191m.

The impairment results from continuing uncertainty and risks related to the protracted process of selecting the development concept for the YME project as well as the lack of decision on the development scenario for the YME project at the end of Q2 2014.

As a result of the impairment, the value of the YME project assets will fall to zero. The tax asset for LOTOS Exploration and Production Norge AS (increased due to the impairment) will amount to PLN 1,248m.

The final amount of the impairment loss is undergoing a review and may change by the date of issue of the consolidated financial statements for H1 2014 (planned for August 19th 2014).

Legal basis: Art. 56.1.1 of the Public Offering Act - inside information.

Not for release, publication or distribution, directly or indirectly, in or into the United States of America, Australia, Canada or Japan.

This communication is for informational purposes only and under no circumstances shall constitute an offer or invitation to make an offer, or form the basis for a decision, to invest in the securities of Grupa LOTOS S.A. (the “Company”). This communication does not constitute marketing or advertising material within the meaning of Art. 53 of the Act on Public Offerings, the Conditions for Introducing Financial Instruments to an Organized Trading System, and Public Companies. A decision as to whether to increase the share capital of the Company has not been made yet. The extraordinary general meeting of the shareholders of the Company the agenda of which includes a resolution on the share capital increase has been convened to be held on 8 September 2014 (the “EGM”). The announcement regarding the convocation of the EGM was published in on 12 August 2014. On the same date, the draft resolution of the EGM regarding the share capital increase was published on the Company’s website (www.lotos.pl). In case of the adoption by the EGM of the resolution on the share capital increase by way of the issuance of new shares (the “Shares”) in the Company subject to pre-emptive rights, the Company intends to file with the Polish Financial Supervision Authority (the “PFSA”) a motion for the approval of a prospectus (the “Prospectus”) which will be the sole legally binding document containing information about the Company and the offering of its Shares in Poland (the “Offering”). The Company will be authorized to carry out the Offering only after the EGM has adopted the above-mentioned resolution and the Prospectus has been approved by the PFSA. The Company will make the Prospectus available pursuant to applicable law.

This communication does not constitute a recommendation within the meaning of the Regulation of the Polish Minister of Finance Regarding Information Constituting Recommendations Concerning Financial Instruments or Issuers Thereof dated 19 October 2005.

This communication (and the information contained herein) does not contain or constitute an offer of securities for sale, or solicitation of an offer to purchase securities, in the United States, Australia, Canada or Japan, or any other jurisdiction. The securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), and may not be offered or sold in the United States of America, unless registered under the Securities Act or unless an exemption from the registration requirements set forth in the Securities Act applies to them. No public offering of the securities will be made in the United States of America.

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