Exile Resources Inc, Oando Plc announce proposed acquisition and financing

TORONTO, Aug. 2, 2011 – Exile Resources Inc. and Oando Plc, the Nigerian based integrated energy group, have announced an agreement that would see the US-based company acquire certain interests of Oando in respect of Oil Mining Leases and Oil Prospecting Licenses in exchange for 100,000,000 post-consolidation common shares in the capital of Exile. Oando is a public limited liability company incorporated under the laws of the Federal Republic of Nigeria.

In 2010, according to its financial statements for the year ended December 31, 2010 audited in accordance with International Financial Reporting Standards, Oando generated total revenues of US$2.55 billion, of which US$131 million was from its exploration and production segment.

Oando’s interests in the Oil Mining Leases and Oil Prospecting Licenses are held through direct and indirect subsidiaries located in Nigeria. The Oil Mining Leases and Oil Prospecting Licenses are a combination of producing, development and appraisal and exploration assets and are in respect of oil fields located in onshore and offshore Nigeria (including the Niger Delta), the Nigeria Sao Tome and Principe Joint Development Zone (JDZ) and the Exclusive Economic Zone (EEZ) of Sao Tome and Principe.

“We are very excited about this proposed transaction with Oando to build the leading indigenous upstream oil and gas company in Africa and believe this will produce great value for our Exile shareholders” says Stan Bharti, Exile’s Chairman.

The parties have agreed to negotiate exclusively with each other in good faith and use their reasonable efforts to negotiate a definitive agreement to give effect to the Acquisition (the “Definitive Agreement”) on or prior to September 30, 2011.

The manner in which the Acquisition will be completed will be determined after each party has had an opportunity to complete its due diligence and consider all applicable tax, securities and other laws. As a condition precedent to signing the Definitive Agreement, Oando shall be satisfied that the Acquisition is structured to ensure that (i) each of the Nigerian assets/companies comprising the Upstream Assets maintains its status as an indigenous Nigerian company under Nigerian law in order to maintain and/or secure indigenous fiscal terms and any other policies and laws applicable to indigenous companies; and (ii) Oando achieves an optimal result having regard to tax and regulatory concerns of Oando.

Exile and Oando are joint venture partners on Exile’s Akepo oil field located in Nigeria. On January 5, 2009, Exile announced that it had entered into an agreement with an affiliate of Oando whereby such affiliate was permitted to acquire a 75 percent working interest in Exile’s 40 percent interest in the Akepo field in return for funding Exile’s historical expenses, and financing the future development expenditure of the project.

Under the terms of the agreement that is structured in two stages, the affiliate of Oando is required to reimburse Exile’s historical expenses on the Akepo field, and finance the further development of the project, in return for acquiring 75 percent of Exile’s current economic interest in the project. On January 20, 2009, Exile received US$1.0 million in compliance with the terms of the agreement.

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