KUALA LUMPUR, 4 May 2017 - UMW Oil & Gas Corporation Berhad (“UMW-OG” or “Company”) announced today that the Company has agreed with Ekuiti Nasional Berhad (“Ekuinas”), through its investment vehicles, that it will not proceed with the proposed consolidation exercise involving UMW- OG, Icon Offshore Berhad (“ICON”) and Orkim Sdn. Bhd. (“Orkim”). Earlier, on January 19, 2017, both parties had entered into two separate Share Purchase Agreements to facilitate the consolidation exercise, which parties have mutually agreed to terminate. The Board arrived at this decision after considering the significant capital requirements of UMW-OG and taking into account the need to have greater clarity on the industry consolidation framework and certainty of the industry environment before any such consolidation can be pursued. President of UMW-OG, Rohaizad Darus, said “While the creation of a major integrated O&G service provider is the right strategic approach for the longer term, after a detailed review, we believe UMW-OG need to fully focus on strengthening its balance sheet and reducing its debt position to meet its lenders’ requirements. As such, we have decided not to pursue with the consolidation at this time but may continue to explore opportunities to collaborate in the future once there is more certainty in the industry environment and consolidation framework.” In this context, UMW-OG also announced a recapitalisation exercise of RM1.8 billion, the details of which are available in UMW-OG’s announcement made via Bursa Securities. Upon the completion of the previously announced proposed demerger of UMW-OG from UMW Holdings Berhad (“UMWH”) which shall proceed as planned, Permodalan Nasional Berhad (“PNB”) together with the unit trust funds under its management (“Funds”), will emerge as a 45.5% direct shareholder in UMW-OG. PNB has informed UMW-OG that it will underwrite the entire recapitalisation exercise subject to terms agreeable to PNB and exemption be granted from having to undertake mandatory general offer. Proceeds from the recapitalisation exercise will be utilised to reduce substantially the debt of UMW-OG with some amount being applied towards working capital requirements. In conjunction with the recapitalisation exercise, UMW-OG is also embarking on a refinancing exercise for its remaining debts so that the maturity profile of these debts will better reflect the long term nature of its assets. Such refinancing exercise will result in the release of a sum of cash currently pledged against certain banking facility. UMW-OG may utilise the released pledged cash to reduce further borrowings of the UMW-OG Group which may include the intercompany loan provided by UMWH amounting to RM308 million. Accordingly, following the recapitalisation and refinancing exercise, UMW-OG expects to reduce its total borrowings by RM1.8 billion, from RM4.1 billion to RM2.3 billion, which will improve its gross gearing position significantly from 1.81 times to 0.56 times.