Acquisition of significant value assets by LOTOS Exploration and Production Norge on the Norwegian Continental Shelf
Report no. 30/20152015-10-31

The Management Board of Grupa LOTOS S.A. (the "Company", the “Issuer”) announces that on October 31st 2015 obtained information about execution of an agreement between LOTOS Exploration & Production Norge AS ("LOTOS Norge"), a subsidiary of the Issuer, owned by LOTOS Petrobaltic Group and ExxonMobil Exploration and Production Norway AS of Stavanger, Norway, dated October 30th, 2015, for the purchase of assets in the Sleipner area on the Norwegian Continental Shelf.

The purchase includes interest in the Sleipner Area consisting of 15% stake in each of the producing fields: Sleipner Øst, Sleipner Vest, Gungne and Loke (all operated by Statoil). Sleipner is one of the major gas-hubs on the Norwegian Continental Shelf, connected by pipelines with the continental Europe and UK. In addition, the purchase includes 28% stake in Statoil operated Alfa Sentral discovery which recently passed the concept select stage (DG2) and production launch is planned for 2020.

Estimated average daily production from the acquired producing fields corresponding to LOTOS Norge’s stake is c. 16,000 barrels of oil equivalent (i.e. boe) in 2015, (c. 70% nat gas and 30% condensate, i.e. light crude oil). Average daily production for 2016 – 2018 is estimated at the level of c. 9,500 boe. 2P reserves (i.e. proved and probable) added to LOTOS’ portfolio following the acquisition amount to 20.8m boe and 2C (i.e. contingent) resources amount to 17.6m boe.

The purchase price is USD 160m USD, i.e. ca. PLN 620m. In addition a contingent payment of USD 25m, i.e. ca. PLN 97m for Alfa Sentral  will be payable when a Plan for Development and Operation (PDO)  is approved by the authorities. In addition the parties have agreed a value adjustment mechanism for the 2016-2020 period if petroleum prices increases.

The transaction will be financed from LOTOS Norge own funds.

The Sleipner assets acquisition shows our commitment to build a strong foothold on the Norwegian Continental Shelf. The acquisition is part of a wider effort to reach the Company's strategic production target, and is in accordance with its strategy and actions to recover YME project funds.

The agreement is subject to conditions precedent, including the securing of required Norwegian administrative decisions. The conditions precedent must be fulfilled early enough for the transaction to be closed by the end of 2015. The transaction closing is planned for December 2015.

There are no existing links between the Issuer, ExxonMobil Exploration and Production Norway AS and their directors or supervisors.

The acquired assets are classified as significant as their estimated value exceeds 10% of Grupa LOTOS S.A.’s equity.

The legal basis for the publication of this Current Report is Par. 5.1.1 of the Minister of Finance’s Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated February 19th 2009, as amended.