1. INTRODUCTION
The Board of Directors of Reach Energy Berhad (“REB” or “the Company”) wishes to announce that an administrative case was initiated against Emir Oil LLP ("EO”or "the Defendant”) in connection with the inspection of the Ministry of Energy of the Republic of Kazakhstan. The administrative materials were heard at the Munaily District Court and these claims are detailed in item 2 of this announcement.

(hereinafter collectively referred to as “the Suit”)

2. PARTICULARS OF THE CLAIMS
Pursuant to the Statement of Claim, the Plaintiff claimed the following from the Defendant:
(a) Violation of the gas dispersion in Emir Oil facilities - during oil operations.
(b) Total claim for damage amounting to RM27,780 (KZT 2,917,000)
(c) Suspension of operations of EO

3. CIRCUMSTANCES LEADING TO THE SUIT
During an audit conducted from 16 November 2020 to 27 November 2020, the Ministry of Energy of the Republic of Kazakhstan discovered some violations of gas dispersion at Emir Oil facilities during oil operations. In general, gas dispersion is not permitted pursuant to the Subsoil Use Codes in Kazakhstan.

4. FINANCIAL AND OPERATIONAL IMPACT ON THE COMPANY
In the event that the Suit is not in favour of the Company, the financial and operation impact to the Company shall be limited to the revenue derived from the production volume due to suspension of the operations of EO for a period of two (2) months imposed by the Court.

5. STEPS TAKEN AND/OR PROPOSED TO BE TAKEN IN RESPECT OF THE SUIT
The Court in Kazakhstan (“the Court”) had on 18 January 2021 ruled that EO had lost the case and shall pay for the penalty amounting to RM27,780 (KZT 2,917,000) and Emir-Oil LLP is ordered to suspend its operations for two months.
The Court further indicated that EO could file its appeal by 28 January 2021, failing which, the Court will then suspend operations in EO for a period of two (2) months. The Company will file an appeal within the stipulated deadline.

This announcement is dated 21 January 2021.