Dec 31, 2012, 5:00pm

Tristan Oil Ltd. (Tristan), the issuer of 10 ½ per cent senior secured notes due January 1, 2012 in the aggregate principal amount of US$531,110,000 (the Notes) announces that on December 17, 2012, it entered into an agreement (the Sharing Agreement) with holders of Notes holding 64.25% of the aggregate principal amount of Notes (the Majority Noteholders). Subsequently, additional holders of Notes have adhered to the Sharing Agreement (together with the Majority Noteholders, the Participating Noteholders) such that, as at today’s date, Participating Noteholders holding in excess of 88.5% of the aggregate principal amount of the Notes are parties to the Sharing Agreement.

Background:

Parties associated with Tristan, including its shareholder Anatolie Stati, along with Gabriel Stati, Ascom Group S.A. and Terra Raf Trans Traiding Ltd. (the Claimant Parties), have initiated an arbitration against the Republic of Kazakhstan seeking substantial damages for the alleged expropriation of certain of the Claimant Parties’ interests in Kazpolmunay LLP and Tolkynneftegaz LLP, the Guarantors under the Notes, as well as certain other assets of the Guarantors (the Arbitration).

The Claimant Parties contend that as a result of these actions by the Republic of Kazakhstan, Tristan failed to pay interest on the Notes on July 1, 2010. That failure subsequently became an Event of Default and additional Events of Default under the Notes have occurred and are continuing as a result of the Notes having matured and the failure of Tristan or the Guarantors to make payment thereon.

Summary Description of Sharing Agreement:

Under the Sharing Agreement:

• Any proceeds collected as a result of an award or settlement of the Arbitration (an Award) will be paid into a blocked account in New York.
• The Proceeds will be shared between the Claimant Parties and the Participating Noteholders; once certain costs have been paid, the Participating Noteholders will receive 70% of any such proceeds until principal and interest on their Notes have been repaid in full.
• Interest will accrue under the Notes after January 1, 2012 at the rate of interest, if any, provided in the Award.
• The Claimant Parties have granted to the Participating Noteholders a collateral assignment over the product and proceeds of the Arbitration as security for their obligations under the Sharing Agreement.
• The Participating Noteholders have agreed to extend the maturity of their Notes until January 1, 2016, although the Participating Noteholders have retained the right to take enforcement action against the original guarantors of the Notes after January 1, 2014.
• The Participating Noteholders have agreed that, in the event that they recover any proceeds from enforcement action against the guarantors of the notes, they will, in certain circumstances, share these with the Claimant Parties applying the same formula that will apply in relation to the proceeds of an Award.
• If the Participating Noteholders recover a “Minimum Payment” (being approximately 70% of what they are owed in respect of the Notes) and certain conditions have been satisfied, Tristan will be entitled to redeem their Notes for US$1.00. In the event that the Participating Noteholders recover less than this amount they will retain their rights to take enforcement action under the Notes in respect of the amounts they are still owed.

The Consent Solicitation and the Pre-Packaged Bankruptcy:

The benefits of the Sharing Agreement are to be made available to all holders of Notes by way of a consent solicitation (the Consent Solicitation) which will amend the terms of the Notes, including those changes as set out above. Following the Consent Solicitation, the Notes held by Participating Noteholders will cease to be in default and the Participating Noteholders will forbear from seeking any remedies with respect to the Notes until January 1, 2014 unless other material defaults under the Sharing Agreement or the Notes occur prior thereto. The Consent Solicitation is expected to be launched during the month of January 2013.

The Participating Noteholders have agreed to vote in favour of the Consent Solicitation and have agreed that they will only sell their Notes to parties which adhere to the terms of the Sharing Agreement and vote in favour of the Consent Solicitation.

In the event that Noteholders holding 85% in aggregate principal amount of the Notes do not vote in favour of the Consent Solicitation, Tristan will seek to implement the restructuring by way of a pre-packaged Chapter 11 bankruptcy filing in the United States Bankruptcy Court for the Southern District of New York (the Bankruptcy). The Participating Noteholders have also agreed to vote in favour of any such bankruptcy plan to give effect to the Sharing Agreement.

For further information contact Mr. Artur Lungu, CFO, at alungu@tristanoil.com or tel.: +37369602130