Main Web Site : http://www.fortune-oil.com/

CBM Partner Web site : http://www.molopo.com.au

IC Write Up : 21st Apr 2006 IC Write Up

Last Major News : 18th Apr 2006 Coal Bed Methane Project

Prelims : 27th Apr 2006 Prelim Results Link

Latest Broker Forecasts : Oriel 7th April 2006 BUY

Prelim Results and Further Updates due around 25th to 27th April 06

ABOUT FORTUNE OIL

For over a decade Fortune Oil PLC has focused on investments and operations in oil & gas infrastructure projects in China and remains one of the few overseas companies operating oil terminals and supplying natural gas in China, all in partnership with the countrys largest oil & gas companies
Fortune Oil PLC is incorporated in England and Wales and is subject to UK Listing Rules and compliance regulations. The largest shareholders are First Level Holdings Limited, Vitol and major Chinese state-owned corporations.

NATURAL GAS :




China will be the world's largest growth market for natural gas as supplies of this clean and economically attractive fuel become more accessible. Fortune Oil's investments in natural gas are principally through Fu Hua, a joint venture with a PetroChina affiliate, which on-sells gas from the pipelines supplying Beijing. In north China Fortune Oil controls and operates distribution pipelines and city gas reticulation systems as well as facilities to produce and transport Compressed Natural Gas (CNG).
Fortune Oil is now one of the leading providers of CNG in Beijing, providing clean fuel for buses, households and factories. In October 2004 Fortune Oil also became the first overseas company to supply LNG (Liquefied Natural Gas) to users in China, delivering LNG by road to the ancient city of Qufu, the home of Chinese philosophy.

OIL TERMINALS :
Maoming SPM

Fortune Oil established the Maoming Single Point Mooring (SPM) in December 1994 to supply crude oil to Sinopecs Maoming refinery, the largest in southern China. The SPM now delivers 10% of Chinas crude oil imports. It allows VLCCs (Very Large Crude Carriers) of up to 280,000 tonnes to moor and deliver crude oil via a 15 km sub-sea pipeline. The SPM is owned and operated by a joint venture company, Maoming King Ming Petroleum Company Limited, and the other main shareholder is Sinopec Maoming Petrochemical Corporation.
The SPM buoy is commonly used throughout the world for loading and unloading liquids but the Maoming SPM remains the only buoy system in China used for importing crude oil. Fortune Oil believes that the SPM concept is a cost-effective solution for importing crude oil into China as many ports are shallow and will become more congested as demand increases. The only alternative to a buoy system in many ports is to dredge channels for large tankers. The SPM has provided significant cost savings to the Maoming refinery through its low operating costs and VLCC capability.

Products Terminals

The oil products market in China is in the process of deregulation and this will allow a larger role for foreign companies in the import and distribution of refined products. Fortune Oil remains one of the few foreign companies with interests in products terminals.
Fortune Oil and Vitol jointly developed the West Zhuhai Oil Products Terminal at the western entrance of the Pearl River Delta. These facilities came on stream in 1998 and comprise 240,000 cubic metres storage and jetties for receiving and distributing refined products. It is one of the few products terminals in south China able to handle 80,000 dwt ocean-going tankers. A controlling stake was sold to PetroChina which uses the terminal for supply of diesel to south China.
In addition Fortune Oil controls a LPG terminal and supply business (Fu Duo), which has 80,000 customers in Zhanjiang city, and owns storage facilities in Shantou. Prior to the restructuring of the China oil industry in the late 1990s, Fortune Oil was also a major participant in the gasoline retail market and in oil trading. We continue to operate two gasoline stations in Beijing but our trading activities are limited to low-risk domestic trading.

Blue Sky Aviation Oil

The South China Bluesky Aviation Oil Company owns and operates the refuelling infrastructure at 15 airports in south China. These include Wuhan, Guilin and the new Guangzhou Baiyun International Airport. Fortune Oil and BP each hold 24.5% of the joint venture and Beijing-based China Aviation Oil Supply Corporation (CAOSC) holds 51%. The consumption of jet fuel in China is rising significantly, particularly at Guangzhou because of pent-up demand in the Pearl River Delta.
The new Guangzhou airport was opened in August 2004. The construction cost was US$2.3 billion and it is almost four times the size of the old airport in downtown Guangzhou. The new airport is capable of handling 25 million passengers and 1 million tonnes of cargo per year and ranks number three for aviation fuel sales in mainland China.

DELAY IN DESPATCH OF CIRCULAR IN RELATION TO
DISCLOSABLE AND CONNECTED TRANSACTION
PROPOSED ACQUISITION OF THE ENTIRE ISSUED SHARE CAPITAL OF
FORTUNE GAS INVESTMENT HOLDINGS LIMITED
ISSUE OF CONSIDERATION SHARES UNDER SPECIFIC MANDATE

As additional time is required to prepare the content of the Circular, the Company expects that the despatch of the Circular will be postponed to on or before 15 February 2013

Nothing new where FTO is concerned....everything always runs way beyond schedule...
Look at Liulin CBM...

oh golly gosh! ..... not yet another chinese company failing to deliver surely?

Big fall away in CGH sp lately..
CGH hold their egm this Friday and vote on the deal with FTO....may hear something before the close of business on that day....

From another board on rns :- In essence the rest of the business for free


The gross consideration for the Proposed Transaction represents a premium of circa 18.5 per cent. to the Company's market capitalisation on 14 December 2012, being the last Business Day prior to the date of the announcement of the Proposed Transaction. The Proposed Transaction therefore represents a significant value realisation opportunity for Shareholders.

Position sold, profit taken..

On balance this is not a great rns...
The market has no trust in this stock and to mention you are losing your premium listing is not going to go down well....plus it has been delivered on a sell of day on markets in general...

The price drop as usual with this stock has been over done but has to be expected as any long termers here would know....I hope I am wrong....but could see further fall today as more PIs sell out who did not yesterday.....
It seems to be looking like a reverse T/O in slow motion or something similar...
Anyway... we have dropped significantly to break most uptrend developed recently.....drawing board comes to mind!!!

company aka lose-a-fortune-oil

Sitting on good gain,bought in @ 8.5 -9.5 range.

so bank it before you lose it all :-)

Thanks cynic,I think I will hold a bit longer.

Maybe two bits longer

Ok ahoy perhaps three bits who knows.

RNS director purchased shares yesterday in FTO i wonder why?

He is the only one who ever does....
The rest await cheap options........
It may have been agreed before hand.... After all it is now losing its premium listing...not good..

Lots of volume today,should end up in the blue.

Hope your right!!!!

what does this tell you? :-(

Big trades going through so they are not all as they might seem....

4 February 2013
Fortune Oil PLC
("Fortune Oil" or "the Company")

Posting of Circular relating to Proposed Disposal of Fortune Oil's Natural Gas Business and transfer of listing category on the Official List from premium to standard

Introduction

On 17 December 2012, the Board of Fortune Oil announced that the Company and its joint venture partner, Wilmar, had conditionally agreed to dispose of the Natural Gas Business to China Gas, for a total consideration of US$400 million (of which the Company's share is US$340 million), in cash and, at the Company's option (subject to certain conditions set out in paragraph 6 of Part 4 of the Circular), in China Gas Shares. Fortune Oil expects to remain involved in the management of the Natural Gas Business following the Proposed Transaction and to participate in the expected future growth in this sector in the PRC, through its shareholding in China Gas.



Owing to its size and nature, the Proposed Transaction constitutes a Class 1 Transaction and therefore it is a requirement of the UK Listing Rules that a circular ("the Circular") be sent to Shareholders and that the Proposed Transaction is subject to the prior approval of Shareholders.



Following completion of the Proposed Transaction and as a result of the Company's strategy of cooperating with joint venture partners in its operations in the PRC, the Company will no longer comply with its continuing obligations pursuant to Listing Rules 6.1.4 and 9.2.2A which require premium listed companies to control the majority of their assets and to carry on an independent business as their main activity. In addition, as a result of the potential changes in the degree of control of the Company's Single Point Mooring venture following the ongoing negotiations for an extension of this venture, the Company may not comply with Listing Rule 6.1.4 irrespective of the Proposed Transaction. The Company is therefore proposing to change its listing category to a standard listing, which is subject to approval by Shareholders. Further details on the Proposed Transfer are set out below.



The Circular has been posted to Shareholders to convene the General Meeting in order to seek these approvals. The notice convening the General Meeting is set out in Part 13 of the Circular and an explanation of the Resolutions to be proposed at the meeting is set out in Paragraph 12 of Part 4 of the Circular.



Shareholders should note that the Transaction Resolution is conditional on the Listing Resolution being passed and therefore should vote for both Resolutions in order to approve the Proposed Transaction.



The Board considers that the Resolutions are in the best interests of Fortune Oil and Shareholders as a whole and unanimously recommends that Shareholders vote in favour of the Resolutions. The Directors intend to vote in favour of the Resolutions in respect of their own beneficial shareholdings amounting, in aggregate, to 752,297,637 Ordinary Shares, representing circa 37.85 per cent. of the issued share capital of the Company.



All definitions in this announcement have the same meaning as those in the Circular. A copy of the Circular is available on the Company's website www.fortune-oil.com. The Circular has also been lodged on the National Storage Mechanism and can be viewed on www.morningstar.co.uk/uk/NSM.



Terms of the Disposal

The principal agreement governing the Proposed Transaction is the Share Purchase Agreement for the sale and purchase of the entire issued share capital of FGIH, which was entered into between the Company, Fortune Oil PRC (a wholly owned subsidiary of the Company), Wilmar, the Purchaser and China Gas on 16 December 2012. Under the terms of the Share Purchase Agreement, the gross consideration for the Proposed Transaction payable to Fortune Oil PRC in respect of its 85 per cent. interest in FGIH will be US$170 million in cash on Completion and a further US$170 million as Deferred Consideration.



The gross consideration for the Proposed Transaction represents a premium of circa 18.5 per cent. to the Company's market capitalisation on 14 December 2012, being the last Business Day prior to the date of the announcement of the Proposed Transaction. The Proposed Transaction therefore represents a significant value realisation opportunity for Shareholders.



Fortune Oil PRC has the right to elect to receive its entitlement to the Deferred Consideration in China Gas Shares. The number of China Gas Shares to be issued will be determined in accordance with the Benchmark Price, subject to a maximum of 212,500,000 China Gas Shares, with any deficit to US$170 million being payable in cash.



Fortune Oil PRC can exercise the Share Consideration Right between 1 November 2013 and 31 December 2013. The issue of China Gas Shares as Deferred Consideration is subject to approval by the board of directors of China Gas and listing permission from the Hong Kong Stock Exchange. In addition, the Deferred Consideration contains an accrued interest element at a 6 per cent. annual interest rate, accruing from the date of Completion up to and including the date of payment of the Deferred Consideration. Interest is only payable where the Share Consideration Right is not exercised by Fortune Oil PRC or where the Share Consideration Right is exercised, but the conditions for the issue of China Gas Shares are not satisfied.



Fortune Oil PRC has also conditionally agreed to compensate China Gas on a dollar for dollar basis where the net profits for the Natural Gas Business for the financial years ending 31 December 2013 and 31 December 2014 are less than HK$200 million (approximately £16.3 million) and less than HK$400 million (approximately £32.5 million) respectively. This compensation is not subject to any cap. The Board expects that the required profit hurdles will be met. Details of the conditions to this profit guarantee are set out in Part 8 of the Circular.



The remaining 15 per cent. interest in the Natural Gas Business is held by Wilmar which is also selling its entire interest in FGIH under the Share Purchase Agreement on substantially the same terms.



As part of the Proposed Transaction, upon Completion, Fortune Oil PRC will be granted the right from time to time to nominate two directors to the board of directors of China Gas, including one to be considered as an executive director and one to be considered as managing director.



Should Fortune Oil PRC exercise its right to receive Deferred Consideration in China Gas Shares, Fortune Oil PRC is required to confirm that, on such allotment, neither Fortune Oil PRC nor parties acting in concert with it will be required to make a mandatory general offer for China Gas under the Hong Kong Takeovers Code.



The Share Purchase Agreement, and therefore the Proposed Transaction, is subject to the satisfaction of the Conditions (or waiver, where such conditions can be waived) set out in Paragraph 6 of Part 4 of the Circular. Accordingly, if any of the Conditions are not satisfied (or waived), the Proposed Transaction may not proceed.



The Proposed Transaction is conditional, inter alia, on the passing of the Resolutions, the passing of the China Gas Resolution, as well as on the receipt of MOFCOM Approval and on negative confirmation from the Hong Kong Takeovers Executive or Hong Kong Takeovers Panel, as further described in the Conditions set out in Paragraph 6 of Part 4 of the Circular.



As announced on 16 January 2013, one further condition, being approval by in excess of a two-thirds majority by value of the Company's lenders with respect to the Term Loan Facility, has already been satisfied.





Further Details of Fortune Oil's Natural Gas Business

The Natural Gas Business is based in the PRC and includes a coal bed methane block in Shanxi Province, gas infrastructure covering three major municipalities, namely Beijing, Tianjin and Chongqing, as well as the seven provinces, Shanxi, Henan, Hebei, Shandong, Liaoning, Jilin and Hubei. The Natural Gas Business also has CNG and LNG operations with downstream retailing to end-users through its city gas companies or CNG vehicle stations, including the largest CNG station in Beijing.



For the year ended 31 December 2011, the Natural Gas Business generated revenues of £59.4 million, profit before tax of £18.0 million and had gross assets of £168.8 million. The holding company for the Natural Gas Business is FGIH, and the Proposed Transaction is being effected through the transfer by the Company's 100 per cent. owned subsidiary, Fortune Oil PRC, of its entire equity interest (85 per cent.) in FGIH for gross consideration totalling US$340 million. The Company has agreed to guarantee the obligations of Fortune Oil PRC under the Proposed Transaction.





Updated Financial Information on the Natural Gas Business





Financial Year ended 31 December
Half Year ended 30 June












2009
2010
2011
2012

Revenues
£70.1m
£88.4m
£59.4m
£33.1m

Profit Before Tax
£8.4m
£13.8m
£18.0m
£6.0m

Gross Assets
£156.4m
£164.4m
£168.8m
£167.2m




The financial information of the Natural Gas Business set out above does not include the figures for a subsidiary of FGIH which has been transferred out of FGIH (Fortune Gas Technology Company Limited) into the Continuing Group. These figures have an insignificant impact on the financial information of the Natural Gas Business.





Key Individuals for the Natural Gas Business



The key individuals important to the Natural Gas Business that will continue to be employed by FGIH following Completion are as follows:



Mr Daniel CHIU, Executive Vice-Chairman of the Company and a Director since 1993. Mr Chiu was Fortune Oil's Chief Executive prior to becoming Vice Chairman in October 1994. He is also the chairman of Federal Asia Company Limited, a private trading company with extensive operations in the PRC. He is a founder of Harrow International School in Bangkok, Beijing and Hong Kong. He is also a non-executive director of Far East Consortium International Limited, a company listed on the Hong Kong Stock Exchange, which together with its subsidiaries, are principally engaged in property development and hotel investment and operation, car park investment and management and property investment. He is also a director of Fortune Max.



Mr TEE Kiam Poon, Chief Executive of the Company since 2010 and appointed as a Business Development Director in 2009. Mr. Tee has over 30 years of experience working for BP and developed many of BP's joint ventures in Asia including BP's first Chinese LNG joint venture. His last position, prior to joining Fortune Oil, was as President for the Coal Venture Development. During his career in the PRC, he has been awarded "Friendship Awards" from the Fuzhou Municipal government and the Fujian Provincial government. He has also been actively involved in Guangdong's Governor Advisory Board since its inception in 1999. Mr Tee was educated in Malaysia and obtained a BSc (honours) degree majoring in Chemistry and an MBA.



Ms LI Ching, Executive Director and previously Chief Executive of the Company from 2001 to 2010 and Joint Chief Executive (Operations) in 1999. Ms Li, a non-executive Director from 1993 to 1998, became an executive Director on 16 June 1998. She was appointed in 1990 as executive director of Kingsleigh Petroleum Limited, nominated by the PRC minority shareholders in the Kingsleigh Group. Previously she was deputy director of China North Industries Corporation (NORINCO), which she joined after graduating from the Economic and Financial Institute of Beijing.





Information on China Gas

China Gas is a natural gas services operator listed on the main board of the Hong Kong Stock Exchange with a market capitalisation of circa US$3.97 billion. It engages principally in the investment, operation and management of city gas pipeline infrastructure, distribution of natural gas and LPG to residential, commercial and industrial users, construction and operation of oil stations and gas stations, and development and application of natural gas and LPG related technologies in the PRC.



China Gas owns 172 exclusive city gas concessions, which currently represents the largest portfolio in the PRC. China Gas also invests in associated infrastructure assets such as gas terminals, storage and transportation facilities, gas logistics systems and vehicle refilling stations, and engages in the development and application of technologies relating to petroleum, natural gas and LPG in the PRC.



Details of Fortune Oil's existing interest in China Gas Holdings

In early 2012, Fortune Oil together with Mr Liu Ming Hui established a joint venture, CGGL (in which the Company owns a 50 per cent. interest) to invest in China Gas. As at 31 January 2013, being the date immediately prior to the date of the Circular, CGGL owned circa 9.2 per cent. of China Gas while its associates owned a further circa 9.2 per cent., including its joint venture partner Mr Liu Ming Hui (circa 4.6 per cent.) and Fortune Max (circa 4.6 per cent.).



The Company and its associates therefore hold a total of 836,550,000 ordinary shares of China Gas, representing circa 18.35 per cent. of its total issued share capital, making CGGL and its associates one of the largest shareholders in China Gas.





Financial effects and use of proceeds

The net proceeds of the initial cash payment to be received by the Company on Completion in respect of its 85 per cent. interest are expected to be approximately US$165 million (approximately £104 million). These net proceeds are stated after deduction of transaction expenses of approximately US$5.0 million (approximately £3.2 million). Prior to any reinvestment or return to Shareholders, the Proposed Transaction is expected to be dilutive to underlying earnings. This statement does not constitute a profit forecast.



The proceeds of the Initial Consideration will be used to reduce the Continuing Group's net debt by (i) satisfying the requirement to repay US$18 million (approximately £11.4 million) of the Term Loan Facility as part of the approval process of the Proposed Transaction by the Company's lenders, and (ii) further scheduled repayments through 2013 and 2014 under the terms of the Term Loan Facility.



The Company intends either to extend the term of the current Term Loan Facility or to refinance this facility. In this case, the Board will consider other uses for the remaining net proceeds of the Initial Consideration.


The Board believes that following Completion, the Company will have a strengthened financial position and is actively considering other potential strategic acquisitions in the energy and resources sector that are synergistic to the Group's strategy, including exploring other investment opportunities and gas supply options that can help to strengthen the supply of resources for the combined gas business with China Gas. However, Fortune Oil will only make new investments or acquisitions within strict financial criteria and where an acquisition or investment would add value for Shareholders.

The Company currently intends to exercise the Share Consideration Right and receive China Gas Shares as the Deferred Consideration. The Company intends to retain its resulting interest in China Gas for the medium to long term. To the extent that the Board does not make this election, or the relevant conditions are not satisfied, such that the Deferred Consideration is paid in cash, the Board will consider additional uses for the Deferred Consideration as set out above.

As a result of the substantial shareholding interest of Fortune Oil and its associates in China Gas and its ability to nominate an executive director and a managing director, the Directors believe that Fortune Oil, subject to confirmation of its auditors, should be able to account for its involvement with China Gas as an associate following exercise of the Share Consideration Right.

Proposed change in listing category

As part of the Company's strategy to secure investment opportunities in the PRC, it has found it advantageous to enter into joint venture arrangements with local Chinese partners and state owned enterprises in order to better access and develop these investment opportunities. As a result, the Continuing Group (details of which are set out in Paragraph 9 of Part 4 of the Circular) will consist of certain controlled operations, where the Company has either board or equity control, as well as joint venture arrangements in which the Company has an equity stake and a presence on the joint venture board, but which are not deemed to be controlled operations under the UK Listing Rules.

Under Listing Rules 6.1.4 and 9.2.2A there is a requirement for premium listed companies to control the majority of their assets and to carry on an independent business as their main activity. Following the Proposed Transaction, the Company will no longer meet its continuing obligations under these requirements. In addition, the Company is in negotiations with its partner Sinopec to extend its Single Point Mooring venture, which is due to expire on 5 February 2013. The Company is confident that an extension will be successfully arranged and that the structure and ownership of the venture will remain under the Company's control until such time as the new venture is in place. The Company therefore expects that any change in the structure of this venture will only occur after the date of the Proposed Transfer. Under the new proposed structure for the venture, the Company's equity interest in the venture is expected to reduce below the 50 per cent. level. Therefore, if the current negotiations conclude as expected, or should such negotiations fail and the venture be terminated, the Company will likely no longer be eligible for a premium listing under Listing Rules 9.2.2A and 6.1.4, irrespective of the Proposed Transaction. The Company is therefore proposing to change its listing category to a standard listing, which is subject to approval by Shareholders. Following such approval, the Proposed Transfer will occur on 20 March 2013, irrespective of whether Completion occurs. Further details of the implications of this change in listing category are set out in Part 9 of the Circular.

Transfer to standard listing

A standard listing requires the issuer to comply with the minimum regulatory requirements imposed by the EU that apply to all securities that are admitted to trading on EU regulated markets. As an issuer with a standard listing, the Company will remain subject to the UK Listing Rules (as applicable to a company whose equity shares have a standard listing), the Prospectus Rules and the Disclosure and Transparency Rules, however it will not be required to comply with super-equivalent provisions of the UK Listing Rules which apply to companies with a premium listing. Such super-equivalent provisions include:



• certain continuing obligations set out in Chapter 9 of the UK Listing Rules such as providing pre-emption rights to shareholders, the Model Code, certain rules regarding employee share schemes and long-term incentive plans, certain rules regarding the conduct of rights issues, open offers and placings and certain disclosures in annual financial reports;



• complying with or explaining against the UK Corporate Governance Code (although the Company will still be required to make a corporate governance statement under paragraph 7.2 of the Disclosure and Transparency Rules);



• complying with the requirement to obtain shareholder consent by way of special resolution for the cancellation of the listing of any of its shares as set out in Chapter 5 of the UK Listing Rules; and



• complying with provisions in Chapters 10 and 11 of the UK Listing Rules relating to significant and related
party transactions.



The super-equivalent provisions provide Shareholders with the rights to vote on certain corporate actions, including significant and related party transactions. Upon the transfer to standard listing becoming effective, Shareholders will no longer have the right to vote on such corporate actions.

Certain administrative requirements associated with the Ordinary Shares having a standard listing will be simplified as the UK Listing Rules for securities with a standard listing are less demanding and stringent than those applicable to securities with a premium listing. In particular, companies with securities admitted to a standard listing will not be required to produce documentation and seek prior shareholder approval in connection with the acquisition or disposal of assets which exceed certain size criteria and/or involve a transaction with a related party.

The higher level of regulation contained in the super-equivalent provisions referred to above has been designed to offer shareholders in premium listed companies additional rights and protections. Accordingly, investors should be aware that any investment in a company that has a standard listing is likely to carry a higher risk than an investment in a company with a premium listing. However, the Board does not intend to implement any reduction in the standards of reporting and corporate governance which the Company currently maintains.

The transfer to standard listing will not affect the way in which Shareholders buy or sell Ordinary Shares and, following the transfer, existing share certificates in issue in respect of Ordinary Shares will remain valid. The Ordinary Shares will also continue to be eligible to be held in ISAs (individual savings accounts) and SIPPs (self-invested personal pensions). As for a company with a premium listing, a company with a standard listing is still required to have a minimum of 25 per cent. of its shares in public hands and will continue to be obliged to publish a prospectus when issuing new shares to the public unless such an issue falls within one of the permitted exemptions. Companies with standard listings are also still required to disclose inside information to the market and to comply with the provisions of the Disclosure and Transparency Rules including to make notifications of dealings in shares. They must also prepare annual audited financial reports, half yearly financial reports and interim management statements to the same standards and within the same timeframe as companies with a premium listing are required to do.

A more detailed summary of the differences between the regulatory requirements of companies with a standard listing and those with a premium listing is contained at Part 9 of the Circular. While the Ordinary Shares have a standard listing, they will not be eligible for inclusion in the UK series of FTSE indices.


General Meeting

Owing to its size and nature, the Proposed Transaction constitutes a Class 1 Transaction and therefore it is a requirement of the UK Listing Rules that a circular be sent to Shareholders and that the Proposed Transaction is subject to the prior approval of Shareholders.

Completion of the transfer of listing category on the Official List from premium to standard is also conditional upon Shareholders' approval being obtained at the General Meeting.

The passing of the Transaction Resolution requires the affirmative vote of a simple majority and the Listing Resolution requires the affirmative vote of not less than 75 per cent. of Shareholders, voting in person or by proxy, at the General Meeting. Accordingly, a notice convening the General Meeting to be held at the offices of Reed Smith LLP, The Broadgate Tower, 20 Primrose Street, London, EC2A 2RS on 19 February 2013 at 11 a.m. is set out in Part 13 of the Circular at which the Resolutions will be proposed to approve the Proposed Transaction and the Proposed Transfer.

Timetable

The dates and times given in the table below in connection with the Proposed Transaction are indicative only and are based on Fortune Oil's current expectations and may be adjusted by Fortune Oil in consultation with, or, if required, with the agreement of Oriel Securities, BNP Paribas and/or China Gas, in which event details of the new times and dates will be notified to the UK Listing Authority, the London Stock Exchange and, where appropriate, Shareholders.

Event
Time and/or Date (1)

Announcement of the Proposed Transaction
17 December 2012

China Gas General Meeting
8 February 2013

Latest time and date for receipt of Form of Proxy
11 a.m. on 15 February 2013

Fortune Oil General Meeting
11 a.m. on 19 February 2013

Receipt of MOFCOM approval
Expected Q2 2013 (2)

Expected date upon which the transfer of listing category will become effective
20 March 2013

Completion of Proposed Transaction
10 Business Days following satisfaction of last Condition (but not prior to the transfer of listing)

Long stop date for satisfaction of Conditions
30 June 2013

(1) London time

(2) Provided as an estimate only. MOFCOM approval may take a longer or shorter time depending on processing times by the PRC authorities.

Action to be taken

A Form of Proxy for use in connection with the General Meeting is enclosed with the Circular. Whether or not Shareholders intend to be present at the General Meeting they are requested to complete and return the Form of Proxy to the Company's registrars, Capita Registrars, PXS, 34 Beckenham Road, Beckenham, Kent BR3 4TU in accordance with the instructions printed on the Form of Proxy as soon as possible and in any event, so that it is received not later than 11 a.m. on 15 February 2013.

Shareholders may also lodge their proxy form electronically through CREST in accordance with note 8. on the Form of Proxy or vote online through the website of the Company's registrar, Capita Registrars at www.capitashareportal.com. The completion and return of the Form of Proxy will not preclude Shareholders from attending the General Meeting or any adjournment thereof and voting in person if they so wish and are so entitled.

Importance of vote

Listing Resolution

It is likely that the Company's negotiations on the extension of the Single Point Mooring venture will result in its equity interest in the venture reducing below the 50 per cent. level. At this point it is likely that the Company would no longer comply with Listing Rules 9.2.2A and 6.1.4 and would therefore be in breach of the UK Listing Rules. As a result, trading in the Ordinary Shares could be suspended and the Company's listing could be cancelled. However, the Board is confident that such a restructuring of the Single Point Mooring venture will not occur prior to the date of the Proposed Transfer. Under the terms of the Term Loan Facility an event of default would occur were the Company to be delisted or to be suspended for a period in excess of five consecutive trading days. Such an event of default could result in the requirement for the immediate repayment of the Term Loan Facility. In this event, were the Company to be unable to agree a waiver of the event of default or to otherwise refinance the Term Loan Facility, the Company may not be able to meet its working capital requirements. This statement does not qualify the working capital statement in paragraph 7 of Part 10 of the Circular, which states that assuming the Proposed Transaction has taken place, the Continuing Group has sufficient working capital for its present requirements, that is, for at least the next 12 months from the date of publication of the Circular. The Board is nevertheless confident that it would be able either to agree a waiver with the lenders of the Term Loan Facility or otherwise refinance the Term Loan Facility.

Recommendation

The Board considers that the Resolutions are in the best interests of the Company and Shareholders as a whole and unanimously recommends that Shareholders vote in favour of the Resolutions. The Directors intend to vote in favour of the Resolutions in respect of their own beneficial shareholdings amounting, in aggregate, to 752,297,637 Ordinary Shares, representing circa 37.85 per cent. of the issued share capital of the Company.