Mr. Peter-Mark Vogel reports

MNP PETROLEUM CORP. AGREES TO US$ 67,000,000 EQUITY AND DEBT INVESTMENT WITH STICHTING VB VAGOBEL

MNP Petroleum Corp. has entered into a letter agreement with Stichting VB Vagobel, a financial holding company under the laws of the Netherlands, providing for a staged private placement of equity and convertible debt for gross proceeds of up to $67-million (U.S.).

Highlights:

• Vagobel has entered into a letter agreement with MNP for a total financing of up to $67-million (U.S.).
• A definitive agreement is due no later than Oct. 15, 2014.
• A $12,059,197 (U.S.) equity financing will be completed in two tranches:
  • $7,315,670 (U.S.) for 48,771,130 MNP shares at 15 U.S. cents;
  • Non-transferable warrant to purchase additional 23,717,633 MNP shares at an exercise price of 20 U.S. cents for a total of $4,743,527 (U.S.).
• A five-year convertible loan of $50-million (U.S.) will be financed in two tranches.
• All principal debt converts at 70 U.S. cents per share.
• The debt carries simple interest of 3 per cent, with 2 per cent of that to be paid in 7,142,857 interest warrants with an exercise price of 70 U.S. cents for a total of $5-million (U.S.) and the remaining 1 per cent to be paid in cash.
• Vagobel will appoint three new members to the MNP board of directors, as well as three additional management members.

Heinz Scholz, executive chairman of MNP, stated: "We are delighted to welcome Vagobel to our team and we look forward to working with such a strong financial and strategic partner in our efforts to unlock the potential of our projects in Central Asia. The completion of this transaction will enable us to advance the development of our assets in Tajikistan. We anticipate being able to provide guidance on the specifics of our plans in this regard as soon as practicable after the closing of the transaction."

In addition to the private placement, MNP and Vagobel are discussing the integration of Vagobel's sister company, VBV International Pte. Ltd., into MNP. VBV holds in excess of $2-billion (U.S.) of assets and will open the downstream market through its investments and abilities for MNP.

Details of the agreement

In the first stage, Vagobel has agreed to purchase 48,771,130 MNP common shares at a purchase price of 15 U.S. cents per share (for an aggregate total of $7,315,670 (U.S.)) and one non-transferable share purchase warrant. The warrant will provide that Vagobel will acquire an additional 23,717,633 MNP common shares at an exercise price of 20 U.S. cents per share within five business days after exercise of the warrant is approved by the TSX Venture Exchange. Gross proceeds upon exercise of the warrant will be approximately $4,743,527 (U.S.).

The second stage consists of a five-year non-transferable convertible loan to MNP in the amount of $50-million (U.S.), to be financed in two tranches of $25-million (U.S.). The letter agreement provides that the first tranche will be financed 30 calendar days after MNP receives shareholder approval and that the second tranche shall be financed six months after shareholder approval. Outstanding principal will bear simple interest at the rate of 3 per cent per annum, with interest payable annually within 30 days after each financing anniversary. Of the interest, 2 per cent is to be paid through exercise of a share purchase warrant providing for the purchase of up to an aggregate of up to 7,142,857 MNP common shares at an exercise price of 70 U.S. cents per interest share for a period coterminous with the loan, and the residual of 1 per cent is to be paid by MNP in cash. The principal amounts outstanding under the loan will be convertible into MNP common shares at a conversion price of 70 U.S. cents. The right to purchase interest shares pursuant to the interest warrant will vest only as and when interest becomes payable under the loan, with such number vesting on each vesting date as will be sufficient to pay two-thirds of the interest due and payable on that vesting date.

MNP and Vagobel will immediately commence the effort to enter into a definitive agreement in respect of the transaction on or before Sept. 30, 2014, but in no event later than Oct. 15, 2014. The definitive agreement will provide for, among other things, customary and mutual indemnities, representations and warranties, covenants and conditions and shall be in form and substance satisfactory to both Vagobel and MNP, acting reasonably.

The obligations of both parties to complete each stage of the transaction are subject to, among other things, satisfactory due diligence investigations by both parties; the receipt of all required third party approvals, including court, regulatory, exchange and shareholder approvals; and the execution of a mutually satisfactory definitive agreement. The parties expect to close the sale of the first-stage shares and the warrant by Oct. 15, 2014, but they anticipate that the exchange will require MNP shareholder approval prior to permitting exercise of the warrant or the interest warrant, or the conversion of any amounts outstanding under the loan.

Finally, the letter agreement provides that Vagobel will be permitted to nominate directors to MNP's board. At the first-stage closing, MNP's board has agreed to create two new vacancies, increasing the number of directors from five to seven, and to appoint two Vagobel nominees to fill those vacancies. Once the transaction has been approved by the MNP shareholders and the warrant has been exercised, MNP's board has agreed to increase the number of directors to create a third new vacancy, increasing the number of directors from seven to eight, and to appoint a third Vagobel nominee to the board. Vagobel will also be given the right to nominate three qualified persons to assist MNP's management team in roles to be agreed upon.

About Vagobel

Stichting VB Vagobel is a company exploring international opportunities. It was founded in 1992 in the Netherlands as a financial holding company for real estate and other assets. Vagobel is currently investing in companies in the upstream industry and is currently involved in opportunities in the Middle East and Africa. Through MNP Petroleum, Vagobel will enlarge its visibility in Central Asia. Through its sister company, registered in Singapore, the group holds equity in a maritime shipping consortium and will start exploring the maritime bunkering industry. Vagobel will also in the near future investigate the opportunity to engage in the alternative energy and bio-energy industries.

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