Kern River PLC
30 March 2000
Kern River plc
Transaction with related party
The Group has agreed with Ultrasis plc, a major shareholder in the Company, an
extension of loan repayments totalling $2.5 million and £240,000 due to
Ultrasis group, and has negotiated a further advance of up to £230,000. This
further advance is repayable in October 2001, along with the £240,000 working
capital loan and half of the dollar loan ($1.25 million).The balance of $1.25
million is repayable in April 2002. The $2.5m loan will carry a variable
return dependent on oil prices. The working capital loan and the further
advance are unsecured and carry interest at 2 per cent. over Lloyds Bank base
rate. In the opinion of the Directors, who have consulted with Marshall
Securities Limited, the Company's nominated adviser, the terms of the
transactions referred to above are fair and reasonable so far as the
shareholders of Kern River plc are concerned.