Admission to trading on AIM

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION.

THIS ANNOUNCEMENT IS NOT AN ADMISSION DOCUMENT AND DOES NOT CONSTITUTE AN OFFER TO SUBSCRIBE FOR OR PURCHASE ANY SECURITIES. THIS ANNOUNCEMENT DOES NOT CONSTITUTE A RECOMMENDATION REGARDING ANY SECURITIES

03 September 2012

ELAND OIL & GAS PLC

("Eland" or the "Company")

Placing of new ordinary shares valued at £118 million

Completion of acquisition of OML 40, Nigeria

Admission to trading on AIM

Eland Oil & Gas PLC, an oil & gas exploration company operating in West Africa, with an initial focus on Nigeria, today announces the completion by its Nigerian joint venture company Elcrest, of the purchase of licence OML 40 and the placing of new ordinary shares ("Placing Shares") in the capital of the Company with investors (the "Placing") to raise gross proceeds of £118 million. Eland is also pleased to announce the admission of all of its ordinary share capital (including the Placing Shares) to trading on the AIM market of the London Stock Exchange PLC ("Admission") at 08.00 today, symbol ELA.

Key point summary

·; Placing price 100 pence per Placing Share.

·; Gross proceeds of the Placing are approximately £118 million and the net proceeds are approximately £106.8 million.

·; The expected market capitalisation upon Admission based on the Placing Price is approximately £134.9 million.

·; The Placing Shares represent approximately 87.5 per cent of the total issued ordinary share capital of the Company at Admission.

·; Eland has also secured a facility of $22 million with Standard Chartered Bank (the "Facility Agreement") and equity option agreements with two key investors of £10 million each.

·; The net proceeds of the Placing together with other available financing will be applied to pay the outstanding balance for the acquisition of OML 40, increase Eland's economic interest in OML 40, re-commission existing infrastructure and restart production and provide working capital for the current 2P development of OML 40.

·; Given Eland's focus on Nigeria and the importance of alignment with the Nigerian Government's indigenisation programme, Eland established with a Nigerian partner, a joint venture company, Elcrest, in which Eland currently has a 45% equity interest and has agreed to acquire a further 4% within 30 days of completion.

·; On 31st August 2012, Elcrest completed the purchase of a 45 per cent interest in OML 40 jointly from Shell Petroleum Development Company of Nigeria Ltd ("SPDC"), Total E&P Nigeria Ltd and Nigerian Agip Oil Company Ltd, for a total consideration of US$154 million, of which US$15.4 million had been previously paid on signing the acquisition agreement as a deposit with US$138.6 million now being paid as the balance. The remaining 55 per cent interest is held by the Nigerian Petroleum Development Company ("NPDC").

·; OML 40, located onshore Nigeria within the prolific Niger Delta, represents an asset with production and exploration potential and with independently certified gross recoverable 2P Reserves of 71.5 million barrels, 3P Reserves of 117 million barrels in the Opuama and Gbetiokun Fields and Mean Contingent Resources of a further 16.7 million barrels in the Abiala and Ugbo Fields. All fields contain light "sweet" oil.

·; In addition, there is an exciting identified exploration portfolio of Gross Prospective Resources of 356 million barrels of oil based on 3D seismic within the 498 sq km. of OML 40.

·; Production from existing wells will be restarted at an expected initial gross rate of at least 2,500 bopd within six months of Admission.

·; It is planned to drill two exploration wells targeting 113 million barrels of oil in 2013.

·; Production will increase through development, appraisal and exploration drilling to reach a target gross production of 50,000 bopd within four years.

·; Eland will seek to acquire and develop underexploited upstream assets in Nigeria.

·; Admission of the ordinary shares to AIM and commencement of dealings under the symbol "ELA", are to take place on 03 September 2012.

·; Canaccord Genuity Limited acts as nominated adviser and broker to Eland.

Les Blair, CEO of Eland Oil & Gas, commented today,

"I am extremely grateful to the shareholders of the Company who have supported us to complete this milestone transaction. The fundraising of £118 million is the largest on an AIM IPO for over three years and highlights the exciting prospects for OML 40 and Nigeria as a whole.

"Together with our partner Starcrest, we will now work in close coordination with Nigerian Petroleum Development Company ("NPDC"), the oil and gas exploration and production subsidiary of the Nigerian National Petroleum Corporation ("NNPC"), which holds a 55% interest in OML 40, towards the full redevelopment of OML 40 including recommissioning of the existing facilities infrastructure to restart production and then the full development of the licence.

"I look forward to updating shareholders and the market as we progress our work programme which is designed to rapidly monetise this asset for the benefit of both our shareholders, the communities within the licence area and all other stakeholders".

For further information:

Eland Oil & Gas PLC (+44 (0) 1224 737 300)

www.elandoilandgas.com

Les Blair, CEO

George Maxwell, CFO

Canaccord Genuity Limited (+44 (0) 20 7523 8000)

Henry Fitzgerald-O'Connor

Peter Stewart

Rob Collins

Citigate Dewe Rogerson (+44 (0) 20 7638 9571)

Martin Jackson

Jack Rich

Note to Editors

OML 40 Overview

OML 40 is an asset lease with production and exploration potential, located onshore Nigeria within the Niger Delta and covers an area of 498 square kilometres. Since it was awarded in 1964, 18 wells have been drilled based on 2D seismic with 15 wells intersecting hydrocarbon reservoirs including one developed oil field (Opuama) and four undeveloped fields of which three are predominantly oil bearing (Abiala, Gbetiokun, Ugbo) and the fourth is a gas discovery (Adagbassa Creek).

The Opuama field was in production from 1975 to 2006 when SPDC JV undertook a controlled shut down of the facility. The field was producing 2,500 bopd at the time of the shut-in. The field facilities consist of a flow station with a nominal capacity of 30,000 bopd and access to the Trans Escravos Pipeline and Forcados Terminal.

OML 40 represents an asset with 71.5 million barrels of gross lease 2P Reserves, 117 million barrels of gross lease 3P Reserves and 16.7 million barrels of gross lease Mean Contingent Resources. In addition, there is a significant identified exploration portfolio of 15 prospects and leads based on 3D seismic with a total unrisked mean crude oil Prospective Resources of 356 million barrels.

Introduction

Eland Oil & Gas PLC was incorporated in Scotland in August 2009 and has established offices in Scotland (Aberdeen), Nigeria (Abuja) and UAE (Sharjah).

Eland commenced operational activities in May 2010 with the principal objective of identifying and acquiring interests in oil & gas assets in West Africa, focused initially on Nigeria including the prolific Niger Delta, and to develop and bring acquired oil & gas assets into production.

Nigeria holds the largest oil and gas reserves in Sub-Saharan Africa and is the region's largest producer of oil. Since 1956, substantial activity has been undertaken in the upstream oil sector by a number of international oil companies and, as a consequence, there is a long history of discovering and producing oil from the Niger Delta and an extensive pipeline network infrastructure and a number of export terminals are already in place.

Management

The Company has assembled an experienced board and management team with established and successful track records in acquiring and developing oil & gas interests in Nigeria. In particular, the Company's founders, Les Blair (CEO) and George Maxwell (CFO), previously held senior management positions with Addax Petroleum Corp. and played a significant role in developing Addax into a highly successful independent oil company focused on upstream operations in Nigeria.

Company structure

Given Eland's focus on Nigeria and the importance of alignment with the Nigerian Government's indigenisation programme, there are significant benefits in working closely with a Nigerian partner. Eland therefore established a joint venture company, Elcrest, in which the Company currently holds a 45 per cent equity interest, the balance is held by Starcrest Nigeria Energy Ltd ("Starcrest"), a subsidiary of The Chrome Group, a major Nigerian indigenous group. Eland has agreed to acquire from Starcrest an additional 4 per cent interest in Elcrest, raising its interest to 49 per cent, for a consideration of US$5 million within 30 days of completion.

Company strategy

The immediate objective is to re-commission OML 40's production facilities, restart production from existing wells and to increase production through further development, appraisal and exploration drilling to reach a target gross production of 50,000 bopd within four years.

It is expected that production from Opuama will re-commence at an initial gross rate of at least 2,500 bopd within six months of Admission.

The Company plans to drill two exploration wells on Abiala in Q4 2013 targeting identified gross Prospective Resources of 113 million barrels.

Eland will also focus on capitalising management's Nigerian expertise and relationships to secure further opportunities in conjunction with indigenous partners in the prolific and underexploited Niger Delta.

Option Agreements with Principal Shareholders

Upon Admission, the principal shareholders in Eland include Helios Natural Resources Ltd (29.4 per cent) and Solstice International Investments Inc ("Solstice")(10.1 per cent) (together the "Option Agreements") .

Under the terms of an option agreement, Helios may subscribe at par value for up to 10,000,000 non-voting right ordinary shares of £1.00 each which are convertible on a one-for-one basis into Ordinary Shares subject to the restrictions contained in the Articles. The Company can require Helios to subscribe for the 10,000,000 non-voting right ordinary shares at par value to the extent Helios has not already done so.

Under the terms of an option agreement, Solstice may subscribe for 10,000,000 Ordinary Shares in the Company at par value and the Company has an option to require Solstice to subscribe for the 10,000,000 ordinary shares at par value to the extent Solstice has not already done so.

Financing, Proceeds of the Placing

The Board intends to use the gross proceeds from the Placing (being £118 million) together with the additional financing to which it has access pursuant to the Solstice option agreement and the Standard Chartered Facility Agreement as follows:

·; £89.4 million (US$138.6 million) as to the balance of the acquisition of OML 40

·; £9.7 million (US$15.0 million) as to re-commissioning of existing infrastructure to restart production

·; £3.2 million (US$5.0 million) as to the acquisition of a further four per cent. of Elcrest

·; £30.9 million (US$47.9 million) as to working capital and administrative costs

·; US$14.4 (£9.3) million, being the amount applied to fees relating to the acquisition and Admission

Admission timetable

Admission of the ordinary shares to AIM and commencement of dealings under the symbol "ELA", are to take place on 03 September 2012.

Admission Document

The admission document will be available to the public free of charge during normal business hours on any day (Saturdays, Sundays and public holidays excepted) at the registered office of Eland Oil & Gas PLC at 17 Abercrombie Court, Prospect Road, Westhill, Aberdeen, AB32 6FE, at the offices of Stephenson Harwood LLP, 1 Finsbury Circus, London EC2M 7SH and on the Company's website www.elandoilandgas.com. The announcement has been issued by Eland Oil & Gas PLC and is the sole responsibility of Eland Oil & Gas PLC.

Glossary Of Technical Terms

THIS DOCUMENT (AND THE INFORMATION CONTAINED HEREIN) IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, WITHIN, IN OR INTO THE UNITED STATES (INCLUDING ITS TERRITORIES AND POSSESSIONS, ANY STATE OF THE UNITED STATES AND THE DISTRICT OF COLUMBIA), AUSTRALIA, CANADA, THE REPUBLIC OF SOUTH AFRICA, SWITZERLAND OR JAPAN.

This press release does not constitute or form part of any offer or solicitation to purchase or subscribe for securities in the United States. Securities may not be offered or sold in the United States absent registration under the US Securities Act of 1933, as amended (the "Securities Act"), or an exemption from, or in a transaction not subject to, registration. The Company has not and does not intend to register any securities under the Securities Act and does not intend to offer any securities to the public in the United States. Subject to certain exceptions, the securities referred to herein may not be offered or sold, directly or indirectly, into, within or in the United States, Australia, Canada, the Republic of South Africa, Switzerland or Japan or to, or for the account or benefit of, any national, resident or citizen of the United States, Australia, Canada, the Republic of South Africa, Switzerland or Japan. The offer and sale of the securities referred to herein has not been and will not be registered nor will a prospectus be filed under the applicable securities laws of the United States, Australia, Canada, Ireland, the Republic of South Africa, Switzerland or Japan.

Information in this press release has not been prepared with regard to matters that may be of particular concern to Canadian readers and, accordingly, should be read with this in mind. The Company intends to rely on an exemption from the prospectus requirement of applicable Canadian securities laws in distributing the securities. The re-sale of any securities issued pursuant to such exemptions are restricted except in limited circumstances. The Company is not, and does not intend to become, a reporting issuer in any jurisdiction of Canada. If the Company does not become a reporting issuer in a jurisdiction of Canada, any securities issued pursuant to an exemption from the prospectus requirement of applicable Canadian securities laws may be subject to re-sale restrictions in Canada for an indefinite period.

This press release constitutes neither an offer to sell nor a solicitation to buy any securities and it does not constitute a prospectus pursuant to art. 652a and/or 1156 of the Swiss Code of Obligations or art. 27 et seqq. of the SIX Swiss Exchange Listing Rules.Diese Mitteilung stellt weder ein Angebot zum Verkauf noch eine Aufforderung zum Kauf von Wertpapieren dar. Sie ist kein Prospekt im Sinne des Artikels 652a und/oder 1156 des Schweizerischen Obligationenrechts oder Artikel 27 ff. des Kotierungsreglements der SIX Swiss Exchange AG.

NOTICE TO INVESTORS IN IRELAND

This press release does not comprise a prospectus for the purposes of Article 5.4 of Directive 2003/71/EC, the Investment Funds, Companies and Miscellaneous Provisions Act 2005 of Ireland, the Prospectus (Directive 2003\71\EC) Regulations 2005 of Ireland (the "Prospectus Regulations") or the Prospectus Rules issued by the Central Bank of Ireland in August 2008 (in each case as amended, supplemented, varied and/or replaced from time to time). Neither this press release nor any other offering or marketing material relating to the offering of the Placing Shares have been prepared in accordance with Directive 2003/71/EC on prospectuses or any measures made under that directive or the laws of Ireland implementing that directive or of any EU Member State or EEA treaty adherent state that implements that directive or those measures.

This press release is only being made available to certain prospective investors in Ireland ("Prospective Irish Investors") on the understanding that any written or oral information contained herein or otherwise made available to them will be kept strictly confidential. The opportunity described in this press release is personal to the addressees in Ireland. This press release must not be copied, reproduced, redistributed or passed by any Prospective Irish Investor to any other person or published in whole or in part for any purpose without the consent of the Company and Canaccord. By accepting this press release, Prospective Irish Investors are deemed to undertake and warrant to the Company and Canaccord that they will keep this press release confidential.

Prospective Irish Investors are recommended to seek their own independent financial advice in relation to the opportunity described in this press release from their own suitably qualified stockbroker, bank manager, solicitor, accountant or other independent financial adviser who is duly authorised or exempted under the Investments Intermediaries Act 1995 of Ireland (as amended) and/or the European Communities (Markets in Financial Instruments) Regulations 2007 of Ireland as appropriate. This press release does not constitute or form part of, and should not be construed as, an offer to sell or issue or the solicitation of an offer to buy or acquire securities in Ireland nor is it an inducement to enter into investment activity in Ireland and no part of such press release, nor the fact of its distribution, shall form the basis of, or be relied upon in connection with, any contract or commitment or investment decision whatsoever.

Nothing herein shall constitute, or is intended to constitute, or shall be treated as constituting or shall be deemed to constitute, any offer or sale of the Placing Shares or other securities to the public in Ireland or the marketing of a collective investment scheme or any other form of offer, sale, marketing, advertising or provision of facilities for the participation by the public, as beneficiaries, in profits or income arising from the acquisition, holding, management or disposal of securities or any other property whatsoever, otherwise than in accordance with Irish Prospectus Law (as defined in the Investment Funds, Companies and Miscellaneous Provisions Act, 2005 of Ireland), the Central Bank Acts, 1942-2010, the Companies Acts 1963-2009, the Unit Trusts Act, 1990 (as amended), the European Communities (Markets in Financial Instruments) Regulations, 2007 (S.I. No. 60 of 2007)(as amended), the Investment Intermediaries Act, 1995 (as amended) and any regulations made thereunder and any codes of conduct, guidance and any other requirements issued in connection therewith (as each of the foregoing may be amended, supplemented, varied and/or replaced from time to time) ("Irish Securities Laws").

Neither this press release nor any other offering or marketing material relating to the offering of the Placing Shares has been approved by the Central Bank of Ireland or any other authority or exchange in Ireland and therefore may not contain all the information required where a document is prepared pursuant to Irish Securities Laws. An investment in the Placing Shares may not provide a level of investor protection equivalent to schemes authorised under Irish Securities Laws and subject to Irish regulations and conditions.

An investment in the Placing Shares does not have the status of a bank deposit and is not within the scope of the Deposit Protection Scheme operated by the Central Bank of Ireland nor any other Irish government guarantee scheme and Eland Oil & Gas PLC would not be regulated by the Central Bank of Ireland arising from the issue of any of the Placing Shares.