Yanchang Petroleum International’s Two Ordinary Resolutions Were Passed by Shareholders

Receives US$22 Million Loan from Controlling Shareholder to Support Capacity Expansion Plan for Canadian Novus

HONG KONG SAR – Media
OutReach – 2 September 2021 – Yanchang Petroleum International Limited (“Yanchang Petroleum
International” or the “Company”; Stock Code: 00346) announced that two ordinary
resolutions as proposed by the Company were duly passed at the Special General
Meeting. Pursuant to which, Yanchang Petroleum Group (Hong Kong) Co., Limited (“Yanchang
Petroleum HK”) conditionally agreed to provide the loan of US$22,000,000
(equivalent to approximately
HK$170,675,000) to the Company for a term commencing from the Utilisation Date and expiring on the third anniversary of
the Utilisation Date, at the interest rate of 4.8% per annum.

In order to seize the favourable opportunity of
rising international crude oil prices and of significantly improving market demand for petroleum in the
North American market, the Company is making an effort to optimise production
and operation arrangements, as well
as increase in the production capacity and sales of crude oil. The loan will enable the Company to obtain adequate
funds to meet Novus’ financial needs for expanding
its production capacity, with approximately 92.6% of the loan amount
(representing approximately HK$158.0 million) to be used for the drilling of
the 26 new oil wells and approximately 7.4% of the loan amount (representing approximately HK$12.7 million)
to be used as general working capital of
Novus.

Mr. Feng
Yinguo, Chairman of Yanchang Petroleum International, said, “The loan
demonstrates the continuous financial support provided by our controlling
shareholder to the Group. The Group will seize the favourable environment of
the structural recovery of international oil and gas industry and propel
production and operation, business expansion, quality and efficiency
improvement, introduce strategic investors and other works to lay a solid
foundation for the long-term development of the Company in future, maximising
returns for our shareholders.”

Yanchang Petroleum HK is wholly owned by
Shaanxi Yanchang Petroleum (Group) Co., Limited (“Yanchang Petroleum Group”),
holding 69.19% of the issued share capital of the Company. The principal activities of Yanchang Petroleum HK are
investment holding and trading of crude
oil. Novus is a wholly-owned subsidiary of the Company in Canada, engaging in
the business of exploration,
exploitation and production of oil and natural gas in Western Canada.