Dominion Petroleum to Raise Funds for Exploration

Dominion Petroleum has placed 7,807,219 new common shares (“the Placing Shares”) at a price of 48p per share (“the Placing Price”), via Insinger de Beaufort, acting as placing agent, with a range of existing and new investors. Application will be made to London Stock Exchange for the Placing Shares to be admitted to trading on AIM and it is anticipated that dealings in the Placing Shares will commence on 13 July 2007. The Placing Shares have been issued credited as fully paid and will rank pari passu in all respects with the existing Common Shares in the Company, including the right to receive all dividends and other distributions declared or paid thereon following the date of their Admission. The Placing Shares will represent approximately 1.9% of the enlarged issued share capital of the Company immediately following Admission.

Dominion Petroleum also announces that it has agreed terms for the issue of at least US $60 million of secured convertible loan notes (“the Convertible Loan Notes”) which would bear interest at the rate of 6.25 percent per annum (payable quarterly in arrears) and would be repayable in full on 30 June 2011.

The Convertible Loan Notes can be converted, at the option of the holders at a price of 60 pence per common share (“Conversion Price”). During the first 18 months following issue, the Conversion Price shall be subject to reduction if Dominion Petroleum’s share price trades in any quarter at an average price below the Original Conversion Price (calculated on a volume weighted average price basis during each fiscal quarter) provided that it shall not be reduced to less than 48p.

A forced conversion operates such that 50% of the original Issue Size shall automatically convert if Dominion Petroleum’s shares have traded at an average in excess of 250% of the Conversion Price for 15 consecutive trading days. The remaining 50% of the original Issue Size shall automatically convert if, after 60 days following the initial automatic conversion date, the Common Shares of Dominion Petroleum have traded at an average in excess of 250% of the Conversion Price for 15 consecutive trading days.

Based on an issue of US $60 million and a conversion price of 48p, this would represent approximately 13% of Dominion Petroleum’s current issued share capital. Dominion Petroleum is acting as Guarantor of the Convertible Loan Notes.

The proceeds of the Placing and of the Convertible Loan Notes will be used to fund Dominion Petroleum’s ongoing exploration activities and for general working capital.

The Convertible Loan Notes are conditional, inter alia, on approval by Dominion Petroleum shareholders of the resolution relating to the Convertible Loan Notes set out in the notice convening the Annual General Meeting of Dominion Petroleum to be held on 2 August 2007.


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