ESB.H Eastsiberian (delisted)

ST. HELIER, Jersey, Sept. 2, 2016 /CNW/ -

Memorandum of Understanding

EastSiberian Plc ("EastSiberian" or the "Corporation") is pleased to announce that it has entered into a binding memorandum of understanding dated August 26, 2016 ("MOU") to sell the assets of EastSiberian in respect of its Nicaraguan opportunity (the "Nicaraguan Assets") to a private arm's length third party company (the "Purchaser"). These assets represent substantially all of the Corporation's assets. The price of such assets is equal to $3 million, payable to EastSiberian upon completion of the conditions set forth below, of which $1.5 million would be payable in cash and the remaining $1.5 million would be payable, at the discretion of the Purchaser, in cash or shares of the Purchaser.

As consideration for the execution by the Purchaser of the MOU, EastSiberian has agreed to immediately assign to the Purchaser its interests in a Cooperation Agreement (a letter of intent) with Empresa Nicaraguense del Petróleo, the Nicaraguan national oil company ("Petronic") and a Heads of Joint Operations Agreement with Petronic in respect of the intention of finding ways to cooperate in oil and gas activities with Petronic in Nicaragua.

The MOU provides that: (i) the parties may replace the MOU with a more substantial definitive agreement if required; and (ii) the sale transaction shall be completed no later than December 15, 2016, subject to extension by the Purchaser.

The sale transaction is subject to a number of conditions including, but not limited to: (i) completion of due diligence by the Purchaser, (ii) the Purchaser having completed a financing of US$30 million, (iii) oil reserves being declared commercially proven P1 reserves under COGE Handbook, (iv) the Purchaser having obtained the hydrocarbon concessions identified in the Joint Operations Agreement with Petronic, (v) the approval of the board of directors of EastSiberian of the definitive agreement (if prepared) in respect of the sale transaction, and (vi) receipt of all approvals, including the approval of the TSX Venture Exchange and the shareholders of EastSiberian.

The board of directors of EastSiberian has determined that pursuing the transaction is in the best interest of EastSiberian given that EastSiberian does not have sufficient resources to obtain the hydrocarbon concessions or develop such concessions without the involvement of the Purchaser. EastSiberian has no positive cash flow and there is a significant risk associated with EastSiberian's ability to raise additional capital. The MOU is the result of negotiations between EastSiberian and the Purchaser that have been ongoing since 2014.  Associates of the Purchaser have assisted EastSiberian in obtaining the cooperation agreements entered into with Petronic.

Upon completion of the sale transaction, it is contemplated that EastSiberian will have no material assets or operations and that the directors of EastSiberian would dissolve EastSiberian, with any and all remaining assets to be distributed to the shareholders of EastSiberian.  The dissolution of EastSiberian and its consequential delisting from NEX would be subject to shareholder approval.

EastSiberian cautions that there is no assurance that the MOU will result in a sale transaction or, if a transaction is undertaken, as to its terms or timing.

Trading of the common shares of EastSiberian has been halted since July 2014 to permit EastSiberian to explore the Nicaraguan opportunity. It is expected that the TSX Venture Exchange will suspend trading following this announcement.

The Corporation also wishes to announce that Joe Hocher has resigned from the Board of Directors of EastSiberian effective August 13, 2016 for personal reasons. The Board wishes to thank Joe for all his excellent work and guidance throughout the time he assisted the Corporation.

Financial Results for the year ended May 31, 2016

The Corporation reports its audited financial results for the year ended May 31, 2016. EastSiberian has filed its Consolidated Financial Statements for the year ended May 31, 2016 and its Management's Discussion and Analysis ("MD&A") on www.sedar.com.

SELECTED FINANCIAL INFORMATION

The audited consolidated financial information of EastSiberian includes the Corporation, its subsidiaries and its investments in equity accounted investees.

Selected financial information for the year ended May 31, 2016 and 2015 and as at May 31, 2016 and May 31, 2015 are set out below and should be read in conjunction with EastSiberian's May 31, 2016 Consolidated Financial Statements and MD&A.  All financial information is stated in United States dollars, unless otherwise indicated.

About EastSiberian

EastSiberian is an international junior oil exploration company incorporated in the Bailiwick of Jersey. For further information, please visit the EastSiberian Plc website at www.eastsiberianplc.com.  The common shares of the Corporation are listed currently on the NEX.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Advisory Regarding Forward-Looking Statements

This press release contains certain forward-looking statements and forward-looking information (collectively referred to as "forward looking statements") within the meaning of Canadian securities laws. All statements other than statements of historical fact are forward-looking statements. Forward-looking information typically contains statements with words such as "anticipate", "believe", "plan", "continuous", "estimate", "expect", "may", "will", "project", "should" or similar words suggesting future outcomes and includes statements regarding the expectation that the Corporation will enter into a definitive agreement regarding the sale transaction and the terms of the sale transaction.

Undue reliance should not be placed on forward-looking statements, which are inherently uncertain, are based on the terms of the MOU and on estimates and assumptions, and are subject to known and unknown risks and uncertainties (both general and specific) that contribute to the possibility that the future events or circumstances contemplated by the forward-looking statements will not occur. There can be no assurance that the plans, intentions or expectations upon which forward-looking statements are based will in fact be realized. Actual results will differ, and the difference may be material and adverse to EastSiberian and its shareholders.  In particular, there can be no assurance that a definitive agreement will be entered into or that any sale transaction will proceed as proposed or at all.

The forward-looking statements contained in this press release are made as of the date hereof and EastSiberian does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, except as required by applicable law. The forward-looking statements contained herein are expressly qualified by this cautionary statement.

SOURCE EastSiberian Plc