Dr. Phil Roach reports

OYSTER OIL - DJIBOUTI EXPLORATION DEVELOPMENTS

Effective March 1, 2017, Oyster Oil and Gas Ltd. has received government of Djibouti approval to commence exploration activities under phase III of the production-sharing contract. Phase III is for a duration of three years to the end of February, 2020.

Technical update

Oyster has undertaken extensive exploration activities across its four exploration blocks in Djibouti over the past five years; however, the main exploration focus in the last year has been in block 1, located in the southeast of the country. The block is substantially onshore, but also includes the adjacent offshore acreage and covers an area of 3,400 square kilometres.

Results of the 2016 airborne gravity and magnetics survey conducted by Bridgeporth indicate that the target Mesozoic sedimentary basin, which outcrops in the southwest of Djibouti, extends across most of block 1. In January, 2017, Oyster's technical team, with support from energy ministry staff, conducted scouting field trips across this large potential field area to evaluate the scope for the next phase of exploration activities, including an onshore seismic campaign.

Dr. Phil Roach, head of exploration, commented: "Oyster is delighted to proceed to the third exploration phase in Djibouti, and is grateful to both the energy ministry and CERD for their continued support. We are targeting a Mesozoic basin which is seen in outcrop in the southwest of the country, since the Mesozoic basins on the south side of the Gulf of Aden were once contiguous with the prolific hydrocarbon basins in Yemen to the north, prior to the opening of the Gulf of Aden.

"Our work programs over the last five years have been thoughtfully designed to derisk the various elements involved and have been extremely successful to that end. Geological fieldwork in southwest Djibouti has already confirmed the presence of a Jurassic oil source, reservoir and seal.

"The areal extent of the Mesozoic basin in block 1 remained a major uncertainty, but the results from the airborne survey surpassed expectations and indicates that the basin does extend throughout most of block 1. The airborne survey has also allowed us to high-grade a specific area for seismic acquisition in the near future."

About Oyster Oil and Gas Ltd.

Oyster is an international oil and gas exploration company with a focus on Eastern Africa. Oyster holds production-sharing contracts interests with the government of Djibouti and the government of Madagascar. Oyster holds a 100-per-cent working interest in block 1101 onshore Madagascar, which covers approximately 2.8 million acres. Oyster also holds 100 per cent of four blocks comprising approximately 3.5 million acres onshore and offshore Djibouti.