1.             INTRODUCTION

The Board of Directors of the Sapura Energy Berhad ("SEB" or "Company" or "Group") wishes to announce that the Company (“Seller”) have today entered into a Heads of Agreement (“HOA”) for the proposed sale of a fifty per cent stake in its wholly-owned subsidiary, Sapura Upstream to OMV AG (“Purchaser”) (SEB and OMV AG collectively known as “the Parties”). The parties have agreed to continue ongoing negotiations on an exclusive basis.

The HOA expresses the intentions of the Parties to form a strategic partnership premised on creating sustainable long-term growth, expanding portfolios and future business activities while realising synergies in the value chain.

The HOA will suspend any ongoing listing process for Sapura Upstream pending the completion of the negotiations and definitive agreements.

2.             INFORMATION ON OMV AG

OMV AG is one of Austria’s largest listed industrial companies with group sales of EUR 20 bn and a workforce of more than 20,000 employees. In Upstream, OMV AG has a strong base in Romania and Austria and a balanced international portfolio, with the North Sea, the Middle East & Africa and Russia as further core regions. 2017 daily production stood at approximately 348,000 barrels of oil equivalent per day (“boe/d”).

3.             SALIENT TERMS OF THE HOA

The HOA confirms the Parties intention to establish a strategic partnership.

SEB and OMV AG intend to hold 50% of the issued share capital of Sapura Upstream respectively.

The proposed transaction is based on an enterprise value of USD1.6 billion.

The Parties hereafter agree to conduct good faith negotiations in respect of definitive agreements.

The final proposal is subject to the relevant regulatory and shareholders’ approvals.

4.             RATIONALE

The proposed strategic partnership will comprise SEB’s portfolio of commercially viable gas assets offshore Sarawak, its acreage in new markets in New Zealand, the Gulf of Mexico and Australia, and it will benefit from SEB’s in-house capabilities.

OMV AG’s existing global core regions offer new market opportunities for upstream and for SEB’s services segment.

5.             EFFECTS OF THE HOA

Upon consummation of the transaction, SEB expects a positive impact on the earnings and net assets of the Group.

6.             INTERESTS OF DIRECTORS, MAJOR SHAREHOLDERS AND/OR PERSONS CONNECTED WITH THEM

None of the directors, major shareholders and/or persons connected with them have any interest, whether direct or indirect, in the proposal.

The Company will make the necessary announcement to Bursa Securities upon entry into definitive agreements.

This announcement is dated 12th, September 2018.