King Stone Energy : FURTHER EXTENSION OF EXCLUSIVITY PERIOD OF THE PROPOSED ACQUISITION

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

KING STONE ENERGY GROUP LIMITED

金 山 能 源 集 團 有 限 公 司

(Incorporated in Hong Kong with limited liability)

(Stock Code: 00663)

FURTHER EXTENSION OF EXCLUSIVITY PERIOD OF

THE PROPOSED ACQUISITION

Reference is made to the announcements (the "Announcements") of King Stone Energy Group Limited dated 4 December 2017, 29 June 2018, 27 December 2018 and 28 June 2019 in respect of, among others, the Proposed Acquisition. Unless otherwise defined, capitalised terms used in this announcement shall have the same meanings as those defined in the Announcements.

As additional time is required for the Group to evaluate the business and prospects of the Target Group, the Vendor, the Company and the Guarantor entered into a further supplemental memorandum of understanding dated 27 December 2019 to extend the exclusivity period for the Proposed Acquisition to 30 June 2020. Such extended date shall also apply to the terms on the refund of the Earnest Money under the MOU, i.e. the MOU shall be terminated in the event that the Formal Agreement cannot be entered into on or before 30 June 2020, and the Earnest Money shall be fully refunded together with interest calculated at 3% per annum by the Vendor to the Company.

Save for the above, all other material terms and conditions of the MOU shall remain unchanged and continue in full force and effect.

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The Company will make further announcement(s) in relation to the development of the Proposed Acquisition as and when appropriate.

The Board wishes to emphasise that the Proposed Acquisition may or may not proceed. If the Proposed Acquisition materialises, it will constitute a notifiable transaction on the part of the Company pursuant to the Listing Rules. Shareholders and potential investors of the Company are reminded to exercise caution when dealing in the securities of the Company.

By Order of the Board

King Stone Energy Group Limited

Zong Hao

Executive Director

Hong Kong, 27 December 2019

As at the date of this announcement, the executive Directors are Ms. Gloria Chang Wong, Mr. Zong Hao, Mr. Xu Zhuliang, Mr. Benjamin Clark Danielson and Ms. He Qing, and the independent non-executive Directors are Mr. Chiu Sui Keung, Mr. Lu Binghui, Mr. Lee Ping, Mr. Liu Shengming and Mr. Lee Kwok Wan.

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