Kunlun Energy : Inside Information Application with the National Association of Financial Market Institutional Investors for the Registration and Proposed Issuance of Medium-term Notes

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(Stock Code: 00135.HK) INSIDE INFORMATION APPLICATION WITH THE NATIONAL ASSOCIATION OF FINANCIAL MARKET INSTITUTIONAL INVESTORS FOR THE REGISTRATION AND PROPOSED ISSUANCE OF MEDIUM-TERM NOTES

This announcement is made by Kunlun Energy Company Limited (the "Company", together with its subsidiaries, the "Group") pursuant to Rule 13.09(2) of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Listing Rules") and the Inside Information Provisions (as defined under the Listing Rules) under Part XIVA of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) (the "SFO").

The board of directors of the Company (the "Board") is pleased to announce that the Company has made an application (the "Application") with the National Association of Financial Market Institutional Investors of the People's Republic of China (the "PRC") (中國銀行間市場交易商協會) (the "NAFMII") for the registration of medium-term notes in the principal amount of not more than RMB10 billion (the "Mid-Term Notes") and the first tranche of the Mid-term Notes in the principal amount of not more than

RMB6.5 billion (the "First Tranche of the Mid-Term Notes") in the PRC. The Company proposes to issue the Mid-Term Notes to the institutional investors in the inter-bank bond market in the PRC in several tranches at appropriate timing. As at the date of this announcement, the Application has not been approved by the NAFMII.

Upon the approval of the Application by the NAFMII and depending on the capital requirements of the Group, the Company proposes to issue the First Tranche of the Mid- Term Notes at the coupon rate to be determined through a centralized book-building process, subject to the prevailing market conditions and responses from the institutional investors. The Company proposes to use the proceeds raised from the First Tranche of the Mid-Term Notes for purposes of, including, debt repayment and replenishment of working capital. The principal amount, maturity, coupon rate, use of proceeds and other material information in relation to the First Tranche of the Mid-Term Notes as set out in the offering circular of the First Tranche of the Mid-Term Notes, which will be

published at the time of issuance, shall prevail.

The registration document in relation to the Application and the relevant documents in relation to the proposed issuance of the First Tranche of the Mid-Term Notes have been published on the website of the NAFMII (http://zhuce.nafmii.org.cn/).

The Company will make further announcement(s) in relation to the proposed issuance of the Mid-Term Notes and/or the First Tranche of the Mid-Term Notes in compliance with the Listing Rules and/or Part XIVA of the SFO as and when required.

As at the date of this announcement, it is uncertain as to whether and when the Application will be approved by the NAFMII. As the proposed issuance of the Mid- Term Notes may or may not proceed, the aforementioned information published on the website of the NAFMII may be subject to changes. Accordingly, shareholders and potential investors of the Company are advised to exercise caution when dealing in the securities of the Company.

By Order of the Board

Kunlun Energy Company Limited Huang Weihe

Chairman

Hong Kong, 26 January 2017

As at the date of this announcement, the Board comprises Mr. Huang Weihe as the Chairman and Executive Director, Mr. Wu Enlai as the Executive Director, Mr. Zhao Yongqi as the Chief Executive Officer and Executive Director, Mr. Zhao Zhongxun as Executive Director, Mr. Ding Shilu as Executive Director, Mr. Zhang Yaoming as Executive Director, and Mr. Li Kwok Sing Aubrey, Dr. Liu Xiao Feng and Mr. Sun Patrick as Independent Non-Executive Directors.