Niko Resources Ltd

Niko Resources Ltd. is committed to the safety and health of our staff, contractors, and the communities affected by our operations. We strive to minimize our impacts on the environment, to demonstrate a high level of social responsibility, and to ensure regulatory compliance.

Our operations bring direct benefits to the communities in which we operate, including the creation of jobs, expansion of local infrastructure and support of community projects that create opportunities for a better future. Key benefits related to our economic activities including capital spending, remuneration to employees, corporate taxes and community contributions.

In my first message to shareholders since my appointment as interim Chief Executive Officer in July, I am pleased to report that the Niko team continues to advance the Company’s strategic plan to maintain its core assets for a period of time with the goal of enhancing value and ultimately monetizing these assets for the benefit of the Company’s stakeholders.

In order to position the Company to achieve this strategic plan, it was critical that we received concessions from our key stakeholders and following a protracted negotiation, in July, we successfully reached agreement to amend the Company’s term loan facilities agreement and note indenture governing the convertible notes.  As a result, the Company is no longer in default of the amended facilities agreement or note indenture.  In addition, the Company is no longer required to make interest payments (including interest previously owing) under the amended facilities agreement or the note indenture, other than in connection with previously disclosed waterfall distributions.

Having reached agreement on the term loan facilities agreement and note indenture, we are now focused on achieving an amicable resolution with Diamond Offshore related to the Diamond Settlement Agreement.  To that end, we remain actively engaged in discussions with Diamond Offshore and believe these discussions have been productive for both parties.  While we remain optimistic that a settlement will be reached, we also recognize that the failure to achieve a resolution on these matters may lead the Company to take steps (including pursuing an arrangement or reorganization proceeding) to ensure that it can continue to give effect to its strategic plan.  In such circumstances, the interests of the holders of the convertible notes and the lenders under the amended facilities agreement may be prejudiced and the value of the Company’s common shares may be significantly impaired or entirely eroded.

Our ongoing dispute with the Government of Bangladesh continues to adversely impact our operations in the region and overall financial condition.  Despite these conditions, we remain vigilant in vigorously pursuing our legal rights related to previously disclosed disputes with the Government of Bangladesh and its subsidiary entities, Petrobangla and Bapex, including non-payments by Petrobangla of amounts due to subsidiaries of the Company.  No assurance can be made that resolution of these matters can be accomplished at all or on a timely basis

While the Company continues to confront near-term challenges, I am pleased with the progress that has been made to date in positioning the Company to achieve its strategic objectives and look forward topartnering with the Company’s management team and Board of Directors to advance these objectives in the months ahead.