PetroKamchatka Plc Announces Farm-In Agreement, an Upcoming Special Meeting of Shareholders to Approve Certain Organization Matters, Management Changes and the Sale of Drilling Equipment

ST. HELIER, Jersey, June 27, 2012 /CNW/ – PetroKamchatka Plc (TSXV:
PKP), (“PetroKamchatka” or the “Corporation”), an international junior
oil exploration company incorporated in the Bailiwick of Jersey, is
pleased to announce that it has entered into a non-arms length farm-in
agreement (the “Farm-in Agreement”) with East Siberian Resources Ltd.
(“ESR”) of Tortola, British Virgin Islands. The Farm-in Agreement
provides that the Corporation may earn up to a 51% equity stake in two
wholly-owned Cyprus subsidiaries of ESR, Elranio Holdings Ltd.
(“Elranio”) and Lesona Holdings Ltd. (“Lesona” and Elranio and Lesona
collectively, the “Holding Companies”).  Elranio indirectly holds,
through CJSC Pacific Oil Resources (“Pacific Oil”), a Russian entity, a
100% interest in an exploration and production license located on the
eastern onshore portion of the Sakhalin Island. Lesona indirectly
holds, through LLC Mezhregionalnaya Toplivnaya Kompaniya (“MTK”), a
Russian entity, one oil production licence and one exploration and
production licence located in Eastern Siberia.  ESR is owned 100% by
the Alltech Group (“Alltech” www.alltech.ru) of the Russian Federation, a private direct investment company.  The
Farm-in Agreement is considered by the TSX Venture Exchange (“TSXV”) to
be a non-arms length transaction because of the past
cross-directorships held by the Corporation’s two new directors, Mr.
Maxim Sidorin and Dr. Vyacheslav Pershukov (see below under “Changes to
Senior Management of the Corporation”). The transaction is not a
related party transaction for the purposes of Multilateral Instrument
61-101.

The Corporation intends to pursue a fund raising for approximately
USD$50 million to fully fund the work program contemplated by the
Farm-in Agreement (the “Work Program”) and for general corporate
purposes.  The fund raise is proposed to be undertaken by a brokered
private placement of common shares of the Corporation (the
“PetroKamchatka Shares”) at a market determined price (the “Private
Placement”), after giving effect to the Consolidation described below
under the heading “Special Meeting of PetroKamchatka Shareholders – Consolidation“. The Corporation has engaged Fox-Davies Capital and Okritie Investor
Services Inc. to act as joint advisors on the fund raise on a best
efforts basis.  Each advisor will be entitled to a commission, which
amount will be based on a percentage of their respective sales.

Commencement of the Work Program is subject to a number of conditions
including: (i) the ability to raise at least US$15 million pursuant to
the Private Placement (the “Initial Financing”) in order to earn an
initial 20% of the shares of Elranio (as set forth below); (ii)
shareholder approval of certain related events described below under
the heading “Special Meeting of PetroKamchatka Shareholders“; and (iii) the approvals of the TSXV.  Pursuant to the Farm-in
Agreement, the Initial Financing is to be completed before December 31,
2012.  The TSXV requirements include, amongst other things: (i) an
independent oil and gas reserve report prepared in accordance with
National Instrument 51-101 (the “Report”) in respect of the licences
subject to the farm-in agreement; (ii) title opinions; (iii) evidence
as to closing of the Initial Financing; and (iv) payment of applicable
fees.

Shareholder agreements will be entered into with each of the Holding
Companies to ensure the Corporation has: (i) rights to earn up to 51%
of the licences as described below, over a staged 3 year period; (ii)
provisions for operatorship; (iii) two directorships out of four for
each Holding Company; (iv) upside area growth protection through a
defined area of mutual interest (AMI); and (v) other related items.

Trading Halt

Trading in the shares of the Corporation has been halted pending receipt
and review of the Report.  The Corporation will issue further news
releases in respect of details regarding the Report and the Private
Placement as the matters progress.

Description of the Farm-In

Pursuant to the Farm-in Agreement, PetroKamchatka has the right to
earn-in to the licences by acquiring newly issued shares in each of the
Holding Companies that will amount to 51% of the outstanding shares on
fully diluted basis.

The farm-in for 51% of the Elranio shares is based upon the funding of
the following potentially staged earn-in work programs to be performed
in relation to the Prizalivnaya Licence held by Elranio:

      1. a 20% shareholding in Elranio will be earned following a US$15MM
         investment by the Corporation in Elranio for drilling the first
         development well. This development well will be drilled to the
         target reservoir zone of interest and tested, to a minimum depth
         of 4,000 metres;
      2. a 20% shareholding in Elranio will be earned following an
         additional US$10MM investment by the Corporation in Elranio for
         drilling of the second development or delineation well. This
         second development or delineation well will be drilled to the same
         reservoir zone of interest and tested, to a minimum depth of 4,000
         metres; and
      3. an 11% shareholding in Elranio will be earned following an
         additional US$5MM investment by the Corporation in Elranio for
         shooting 200 km of 2D seismic or an equivalent agreed upon 3D
         seismic program.

The farm-in for 51% of the Lesona shares is based upon the following
potentially staged earn-in funding for the work program performed in
relation to the Verkhnepitskaya Licence and Borschevskaya Licences held
by Lesona:

      1. a 26% shareholding in Lesona will be earned following a US$10MM
         investment by the Corporation in Lesona for drilling the first
         delineation well (1P) on the Borschevskaya Licence. This well will
         be drilled updip from the oil water contact in the reservoir zone
         of interest and tested, to a minimum depth of 2,700 metres ;
      2. a 25% shareholding in Lesona will be earned following an
         additional US$10MM investment by the Corporation in Lesona for
         shooting 300 km of 2D seismic on the Borschevskaya Licence;
         and shooting 700 km of 2D seismic on the Verkhnepitskaya Licence.

The Corporation shall only be entitled to earn-in as set out above until
the date that is three (3) years after the date that the Initial Fund
Raise closes.

Special Meeting of PetroKamchatka Shareholders

In connection with the Farm-in Agreement, the Corporation will seek
shareholder approval for: (i) a corporate name change to “EastSiberian
Plc” (“Name Change”); and (ii) a 100:1 share consolidation (the
“Consolidation”). The Corporation expects to hold a special meeting of
shareholders (the “Shareholder Meeting”) to conduct the foregoing
business on or about August 15, 2012.

Name Change

With the execution of the Farm-in Agreement, the Corporation has taken
steps to diversify its focus from exploration in Kamchatka, Russia to
development opportunities in Eastern Siberia and the Sakhalin region of
Eastern Russia.  To reflect this broader geographic focus, the
Corporation will seek shareholder approval to change the name of the
Corporation to “EastSiberian Plc”.

Consolidation

In order to fund the Work Program, the Corporation will undertake the
Private Placement following completion of a consolidation of its
shares. To support this equity raise, the Company will seek shareholder
approval to consolidate its shares at 100:1. At the date hereof, there
are 490,396,137 common shares of PKP outstanding.

Changes to Senior Management of the Corporation

Pursuant to the Farm-in Agreement and subject to the approval by the
shareholders of the Name Change and Consolidation and of the TSXV
contemplated here, it is anticipated that Mr. Maxim Sidorin will be
appointed as the Chief Executive Officer of the Corporation. Mr. Phipps
will remain as President and Chairman of the Board.  Further to the
Corporation’s News Release dated May 1, 2012, Mr. Maxim Sidorin and Dr.
Vyacheslav Pershukov have been appointed to the Board of Directors of
the Corporation.  Mr. Sidorin brings extensive financial and Russian
operational experience and expertise to the Corporation.  Prior to
being appointed to the Board of Directors he was the Chief Executive
Officer of ESR.  Dr. Pershukov brings extensive technical expertise in
Russia and abroad plus a very strong professional and government
network.  Prior to being appointed to the Board of Directors he was a
non-executive director of ESR.  Each of Mr. Sidorin and Dr. Pershukov
have, prior to the Corporation entering into the Farm-in Agreement,
resigned their positions held in ESR.

PetroKamchatka’s President and CEO, Mr. Phipps, states “This farm-in
agreement and recently announced board and corporate management
restructuring enhances our company’s ability to advance oil and gas
exploration and development efforts in Russia. Adding new proven
development opportunities to our portfolio reduces our overall
technical risk substantially. With the additions to the management team
and new Russian directors, we have enhanced our ability to raise funds
required to implement the development program associated with the new
opportunities.  The Corporation will also continue efforts to farm out
its large Kamchatka exploration lands and realize value from the sale
of its drilling equipment and materials in Russia.  We look forward to
working to advance the Corporation’s initiatives in Russia.”

Sale of Drilling Equipment

The Corporation also announces that it has completed the sale of its
HighKelly drilling rig. This rig was originally purchased by the joint
venture to facilitate drilling operations in Kamchatka, but was
subsequently replaced by more mobile units. The rig was sold for
CAD$3,500,000, with the Corporation’s 46.25% share being CAD$1,618,750.
These proceeds will be used for general corporate purposes as the
Corporation pursues funding for the Farm-in Agreement.

Forward looking Statements or Information

Certain statements included in this news release constitute
forward-looking statements or forward-looking information under
applicable securities legislation. Such forward-looking statements or
information are provided for the purpose of providing information about
management’s current expectations and plans relating to the future.
Readers are cautioned that reliance on such information may not be
appropriate for other purposes, such as making investment decisions.
Forward-looking statements or information typically contain statements
with words such as “anticipate”, “believe”, “expect”, “plan”, “intend”,
“estimate”, “propose”, “project” or similar words suggesting future
outcomes or statements regarding an outlook. Forward-looking statements
or information concerning PetroKamchatka in this news release may
include, but are not limited to statements or information with respect
to: business strategy and objectives; development, exploration,
acquisition and disposition plans, and the timing and results thereof.
Forward-looking statements or information are based on a number of
factors and assumptions which have been used to develop such statements
and information but which may prove to be incorrect. Although
PetroKamchatka believes that the expectations reflected in such
forward-looking statements or information are reasonable, undue
reliance should not be placed on such statements because PetroKamchatka
can give no assurance that such expectations will prove to be correct.
In addition to other factors and assumptions which may be identified in
this news release, assumptions have been made regarding, among other
things: the timely receipt of any required regulatory and shareholder
approvals; the ability of PetroKamchatka to obtain qualified staff,
equipment and services in a timely and cost efficient manner; and the
ability of PetroKamchatka to obtain financing on acceptable terms.
Readers are cautioned that the foregoing list is not exhaustive of all
factors and assumptions which have been used.

Forward-looking statements or information are based on current
expectations, estimates and projections that involve a number of risks
and uncertainties which could cause actual results to differ materially
from those anticipated by PetroKamchatka and described in the
forward-looking statements or information. These risks and
uncertainties may cause actual results to differ materially from the
forward-looking statements or information.

The forward-looking statements or information contained in this news
release are made as of the date hereof and PetroKamchatka undertakes no
obligation to update publicly or revise any forward-looking statements
or information, whether as a result of new information, future events
or otherwise unless required by applicable securities laws. The
forward-looking statements or information contained in this news
release are expressly qualified by this cautionary statement.

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.

SOURCE PetroKamchatka Plc