Audited Results for Year ended 31 December 2014

22 May 2015

Eland Oil & Gas PLC

("Eland" or the "Company" and, together with its subsidiaries, the "Group")

Final Audited Results for the Year ended 31 December 2014

Eland Oil & Gas PLC (AIM: ELA), an oil & gas development and exploration company operating in West Africa with an initial focus on Nigeria, is today pleased to announce its audited results for the year ended 31 December 2014. The highlights are:

Operational Highlights

· The results of the reserves and resources evaluation by NSAI of OML 40 demonstrate a best estimate prospective resources increase of 113%, as compared to the previous CPR.

· Total lifting of 115,722 bbls of crude oil in 2014. Elcrest completed the loading and sale of 95,290 bbls gross of crude oil in the four months to 30 April 2015.

· Successful recommissioning of existing infrastructure and re-opening of two existing wells in the Opuama field.

· So far the OML 40 Joint Venture has achieved a 90% uptime of facilities and pipeline during 2015.

· Acquisition in August 2014 of a 40% interest in the Ubima field onshore Nigeria with Eland acting as the technical and financial partner. Gross 2C resource estimates of 33.9 mmbbl of oil.*

· In May 2015, Elcrest received consent from the Ministry of Petroleum Resources for Elcrest's appointment as operator of OML 40. The DPR has advised the Nigerian National Petroleum Corporation ("NNPC") to proceed with the finalisation of the Joint Operation Agreement.

Financial Highlights

· Cash and cash equivalents balance of $15.0 million at 31 December 2014.

· In 2014 the Group sold 115,722 bbls of crude oil, generating revenue of $11.7 million for the year (2013: nil).

· The consolidated loss for the year was $16.3 million compared with $26.1 million for 2013.

· A Reserve Based Lending (RBL) facility of up to $75 million was signed with Standard Chartered Bank to fund development of OML 40. $35 million has been committed and syndication of the remaining $40 million has already commenced.

· The granting of Pioneer Tax status to Elcrest in respect of OML 40 on 1 May 2014 under which Elcrest will be exempt from paying Petroleum Profits Tax for an initial three year term which can then be extended by a further two years on successful application. This is expected to result in a significant increase in cash flows and NPV.

Outlook

· The well re-entry and workover opportunities on Opuama 5 have been evaluated and are included within the 2015 work programme. The first operations are planned for Q2 2015. The well is expected to have the potential to produce between 400-600 bopd gross and in its lifetime is expected to produce 1.1 to 1.3 mmbbls gross.

· Commence a seven well development drilling programme on the Opuama field to develop the 2P reserves. Each new well is expected to produce 4,500 - 5,500 bopd gross.

· Expected 2015 year-end gross production exit rate from OML 40 of approximately 12,000 bopd gross.

· The Company is seeking to increase its current $35 million committed debt facility to $75 million through syndication.

· Continue with cost reduction programme to reduce operating expenses and maximise capital expenditure investment for 2015.

*Source: Independent Report by AGR TRACS July 2014.

The Company's audited 2014 Annual Report & Accounts have been posted on the Company's website www.elandoilandgas.com.

For further information:

Cautionary statement regarding forward-looking statements

This Results Statement may contain forward-looking statements which are made in good faith and are based on current expectations or beliefs, as well as assumptions about future events. You can sometimes, but not always, identify these statements by the use of a date in the future or such words as 'will', 'anticipate', 'estimate', 'expect', 'project', 'forecast', 'intend', 'plan', 'should', 'may', 'assume' and other similar words. By their nature, forward-looking statements are inherently predictive and speculative and involve risk and uncertainty because they relate to events, and depend on circumstances that will occur in the future. You should not place undue reliance on these forward-looking statements, which are not a guarantee of future performance and are subject to factors that could cause actual results to differ materially from those expressed or implied by these statements. The Company undertakes no obligation to update any forward-looking statements contained in this Results Statement, whether as a result of new information, future events or otherwise.

CHAIRMAN'S STATEMENT

I am pleased to present Eland's financial results for 2014 after what has been a volatile year for the sector but one in which we have made significant headway.

Following a near halving of the oil price our industry is facing major challenges, but I remain confident that we have the assets and a management team that can deliver value to our shareholders. We have continued to make good progress on OML 40 and we look forward to development drilling later this year.

The focus over the last year has been to stabilise production and this has been successfully achieved. In December 2014 production 'uptime' was over 90% which compares to 6.2% for the first six months of production. In 2015 to the end of April, we have recorded 100% 'uptime' apart from short periods when our off-taker Shell carried out maintenance work on their connected facilities which has taken the average to 91%. This accomplishment has been achieved by working more effectively with the indigenous operator (NPDC) and the local communities. We have also secured Pioneer Tax Status for OML 40 giving us a 100% Petroleum Profits tax concession for an initial three years with a further two years on successful application. This concession gives Eland a great incentive to accelerate the production revenue from OML 40 which is expected to be achieved through drilling later this year. We have commenced a workover of the shut-in well Opuama 5 which we expect to add between 400-600 bopd (gross) to the field's production. During the year we also farmed in to the Ubima field (OML 17) which adds a minimum of 13.6 mmbbls of net 2C resources to our assets which we expect to increase as we add finance to the operations. We are presently undertaking the technical work on the field with the intention of drilling in 2016.

At the end of 2014 Eland completed a 'Reserve Based Lending' (RBL) facility of up to $75 million - a significant achievement given the oil price environment and a vote of confidence from Standard Chartered Bank in the Company and its assets. $35 million of the facility was committed immediately and the balance is expected to be syndicated in the coming months. The financial performance for 2014 (a loss of $16.3 million) reflects operating costs associated with the start-up of production but also includes oil sales of 115,722 bbls which generated $11.7 million of revenue. With production stabilised, and hopefully growing as new wells are drilled, we can expect increased sales revenues and lower unit operating costs for 2015. At the end of 2014 our cash and cash equivalents were $15.0 million with undrawn bank facilities comprising a $22 million Bridge loan facility, which was subsequently replaced by the RBL.

During 2014 the management team was strengthened by the appointment of George Maxwell as Chief Executive Officer and Louis Castro as Chief Financial Officer. I agreed to assume the role of Executive Chairman for a temporary period while the new team settled in. We have also added to the technical team with the appointment of John Downey as Chief Technical Officer and the recruitment of new technical staff all based in Aberdeen. I would like to thank our former CEO Les Blair for his contribution to the development of Eland over the last four years. He remains an adviser to the Group in a role where his knowledge of Nigeria and energy can add most value. I would also like to thank all of our stakeholders for their support, particularly the management and staff for their hard work over the last year.

Nigeria has the largest oil reserves of all countries in Sub-Saharan Africa but is significantly under-represented by junior oil companies like Eland as the entry hurdles are perceived to be too large. We have seen an increasing number of indigenous companies participating in recent years and I believe this trend will continue. Nigeria has also just elected a new President and we expect this to be positive for the upstream sector. Eland is well placed to grow in this environment with its experienced management and a relatively strong financial position. Very recently we have had confirmation from the Department of Petroleum Resources that Elcrest has met all of the obligations required in order to be appointed as operator of OML 40. We see this as a significant step forward which will enable us to accelerate the unlocking of value in OML 40. Our plan is to drill at least two new wells this year and complete two workovers all of which should push 2015 year-end production up to 12,000 bopd (gross). We look forward to being able to deliver further positive news on the development of OML 40 that shareholders are awaiting.

Harry Wilson

Chairman

CHIEF EXECUTIVE OFFICER'S REPORT

Eland, from its formation in 2010, has been focused on building a portfolio of upstream oil and gas assets in West Africa, particularly in Nigeria. In September 2012, we completed the acquisition of the initial part of that portfolio when the Group acquired a 45% equity interest in OML 40, through a special purpose vehicle, and listed the Company on AIM.

Eland has had a strong 2014, from first oil in February, the award of Pioneer Tax status on OML 40 in May, acquiring a second Nigerian asset, the Ubima field, in August and ending the year with over 90% production uptime in December. This level of production consistency has continued into 2015 with near-continuous production from December through to the end of April, with only planned maintenance of seven days on the Shell Trans Escravos Pipeline (TEP) resulting in any downtime during this period.

Management Change

During this year we also saw a change in management as I moved into the Chief Executive role and Les Blair moved aside to focus on in-country strategy and key interfaces. This was a natural progression as the Company moved from an acquisition and building phase towards asset development. The changing landscape in the Nigerian oil & gas sector has seen a rise in the number of independents, and more recently further divestments by Shell and Chevron and we anticipate this process of divestitures by the IOC's to continue in 2015 and beyond.

Eland remains well placed to take advantage of opportunities as they arise and during this time we will continue to expand our production in country.

Completion of Rehabilitation Work and Commencement of First Oil

In February 2014 we commenced production from the Opuama field following the completion of flowstation and pipeline repairs. Initial production rates of 3,500 bopd were achieved from two wells (Opuama 1 and 3), with crude oil delivered to the Forcados terminal and sold through an off-take agreement with Shell Western Supply and Trading Limited.

We encountered a number of challenges relating to the flow station and pipeline integrity. These issues caused numerous production interruptions from February through August and in addition there was a significant delay due to the shut down of the Forcados terminal in March and April of last year.

During 2014 we significantly improved the integrity of the pipeline. This contributed to the improved level of uptime we have experienced over the past 5 months.

Pioneer Tax Status

In May 2014 our local company Elcrest Exploration and Production Nigeria Ltd ("Elcrest") was awarded Pioneer Tax status for OML 40. This will run for an initial three year term until May 2017 with an opportunity to extend for an additional two years on successful application. This provides an excellent incentive for investment in our asset. OML 40 is an underdeveloped asset of 498 km2, with the Opuama field in production and the Gbetiokun field awaiting development. In addition from our most recent analysis we determine over 75 drilling targets within the licence, which we plan to exploit over the coming five years. The tax incentive allows the re-investment into OML 40 to accelerate the growth.

Ubima

In August 2014 we acquired a 40% interest in the Ubima field, located onshore in the Niger Delta, just north of Port Harcourt. The agreement allows Eland the opportunity to operate the field as technical and finance partner to All Grace Energy Ltd ("All Grace") which holds and retains a 60% equity interest. The addition of this asset to our portfolio was a key development and highlighted the benefit of having a strong presence in-country. The field currently has an estimated 33.9 mmbbls gross contingent resources and we have already commenced detailed sub-surface work, an environmental impact assessment on the development plan and land surveys. Further work is planned in Q4 of 2015.

Funding our Operations

During 2014 we met all of the conditions precedent required to access our $22 million bridge loan facility with Standard Chartered Bank. The debt remained undrawn until expiry in February 2015, and at the end of 2014 we completed and signed a four and a half year Reserve Based Lending facility of up to $75 million, again with Standard Chartered Bank. $35 million of the facility has initially been committed by Standard Chartered and a further $40 million is expected to be syndicated by the end of Q2 2015.

Work Programme and Budget

The Work Programme and Budget for 2014 had originally focused on re-commencing production followed by an initial drilling campaign in Opuama. The inconsistency of production delayed access to our debt facility, resulting in a delay to the programme. During this time we re-evaluated workover opportunities. In Q4 of 2014 we reviewed three potential workover possibilities, Opuama 4, 5 and 7. The conclusion of this evaluation resulted in a change to our 2015 work programme, where we included both Opuama 5 and 7 into the programme. These two workovers are in addition to the planned two new wells (Opuama 8 and 9) due to commence in Q3 2015. We are currently working on Opuama 5 and expect to have the well in production during Q2 of 2015.

The experience gained repairing the infrastructure during 2014 has provided sufficient detail on the pipeline condition enabling us to delay the line replacement. This was originally planned for 2015, however, given the current infrastructure performance we plan only sectional replacements of the line, if required. This has allowed the Company to direct the majority of its capex programme towards revenue generating capex, being the two workover wells and two new producing wells.

We are currently completing an evaluation of available drilling rigs with a view to completing this selection in Q2 2015 with a contract award for drilling to commence in Q3 2015.

The re-entry of Ubima 1 well is planned for late Q4 2015/early Q1 2016, subject to securing the rig contract and completion of the subsurface studies.

Health, Safety, Environment and Social Responsibility

We, in conjunction with our partners, NPDC and All Grace, work closely with our host communities and consult with them on all major aspects of work we undertake. This includes carrying out full risk assessments and environmental impact surveys and also providing the host communities employment opportunities through local contracting.

This has been successful in Opuama, where a number of community contracts have been awarded which have contributed to the successful production from this field in 2014.

We have a number of community programmes planned in 2015 and 2016, including two water wells, a civic centre and hospital all within OML 40. We currently support some communities with power through the use of diesel generators. In 2016 we plan to convert these to gas-fired generators utilising the gas produced at Opuama and further reducing the volume of gas flared. These key areas of medical care, drinking water and power for communities remain our key focus areas in addition to creating employment opportunities.

Outlook

In recent times the oil and gas industry has faced some significant challenges. In Eland we are not immune to these. We have focused on our cost base, targeting over $8 million of opex and G&A savings within 2015 alone. We have prepared our work programme and budget on the basis of a $50/bbl Brent oil price, with a sensitivity at $40/bbl. We can maintain our full capex work programme at the $50/bbl price deck, and to date the majority of our crude oil sales in 2015 have been well above this price. Our industry is well experienced in dealing with oil price fluctuations and this experience is key to maintaining a plan to ensure a positive contribution from every barrel produced. We have excellent assets in OML 40 and Ubima which provide an incredible growth opportunity, even at current oil price levels.

Following the recent approval of transfer of operatorship to Elcrest by the DPR, we are in discussions with our partner NPDC to assume the operatorship of OML 40. This process is well underway and we fully expect to announce the formal transfer of operatorship, through the execution of a new operating agreement on OML 40, in the near future.

Eland has come a long way since its inception in 2010. I am very excited at the opportunity to continue this development progress in the coming years.

George Maxwell

Chief Executive Officer

CHIEF FINANCIAL OFFICER'S REVIEW

Key Strengths

· Cash generative asset producing over 3,000 bopd gross (1,350 bopd net) and selling at a premium to Brent.

· Strong banking and off-take relationships.

· Extensive reserves and resources which will produce further capacity to fund the future development of the Group's assets.

· Supportive shareholder base.

Key Financial Highlights

The consolidated loss for the year was $16.3 million compared with $26.1 million for 2013, with consolidated revenue of $11.7 million (2013: nil) from the sale of 115,722 barrels of crude oil.

The signing of a Reserve Based Lending ('RBL') facility with Standard Chartered Bank ('SCB') with $35 million committed initially, to be syndicated to $75 million.

The exercise of options by Eland during the year which raised $33.3 million in total from two of its major shareholders, Helios Natural Resources Limited ('Helios') and Solstice International Investments Inc. ('Solstice').

The granting of pioneer tax status to Elcrest in respect of OML 40 on 1 May 2014 under which Elcrest will be exempt from paying Petroleum Profits Tax for an initial three year term which can then be extended by a further two years on successful application.

Review of 2014

The consolidated loss for the year was $16.3 million, with consolidated revenue of $11.7 million, consolidated operating expenses of $18.2 million and consolidated administrative expenses of $8.8 million. First oil was achieved in early February 2014 through the re-opening of two existing wells at Opuama, which stabilised at an initial production rate of some 3,500 bopd gross (1,575 bopd net) and has since declined to 3,000 bopd gross (1,350 bopd net), a lower than anticipated decline rate. Continued prolonged interruptions to production were experienced right through until September 2014 which had the effect of reducing potential revenue and increasing operating expenses per barrel.

Since September 2014, downtime has reduced considerably with a subsequent enhancement in performance. In total, the Group sold 115,722 barrels of crude oil during 2014, and of these, 98,942 barrels were produced between September and December 2014. Uptime has continued to improve post year-end, and in the first four months of 2015, the Group has produced 114,084 barrels in spite of the natural decline in bopd noted above.

Operating expenses of $18.2 million were recorded after a net adjustment amounting to $6.0 million representing the revision by management of estimated amounts due to a service provider for logistical and general support services for which no invoices have been received by the Group since 2011.

During 2014, based on consolidated operating expenses of $24.2 million (before the net adjustment noted above) and production of 113,502 barrels, the consolidated opex per barrel amounted to $213. However, this was heavily influenced by the long interruptions to production, such that by the final month of 2014 as production uptime improved, consolidated opex per barrel was running at $63.

During 2015, as we deliver on our planned well programme and increase production, consolidated opex per barrel costs are expected to fall sharply to $21 by the final quarter and $16 during the final month in 2015, with further subsequent reductions forecast during 2016.

Administrative expenses of $8.8 million during 2014 were broadly in line with the $8.4 million incurred in 2013. We have targeted over $8 million of opex and G&A savings within 2015 alone.

Finance costs amounted to $1.5 million during 2014 and related principally to the costs of the Bridge loan which was extended to the Company by SCB until replacement by the RBL.

The Group's consolidated balance sheet, with an overall increase in net assets of $18.5 million as at 31 December 2014, reflects the commencement of initial production and both the investment in the forthcoming development of OML 40 and the acquisition of a 40% share in Ubima.

Consolidated current assets rose to $19.8 million from $8.0 million, principally as a result of higher cash and cash equivalents of $15 million at the year end.

Consolidated current liabilities increased by $18.1 million, which comprise principally the amounts due on capital and other expenditure on OML 40, including expenditure on the rehabilitation of the Opuama flow station, the costs of dredging required ahead of the forthcoming drilling programme and fabrication costs of a metering system for Opuama crude export.

At the turn of the year the Company executed an RBL facility of up to $75 million with SCB in spite of difficult market conditions and a falling oil price. The RBL has a maturity of four and a half years, is repayable semi-annually from September 2016 and has a margin of 7.75% over US$ Libor. SCB has committed $35 million of the facility and will act as lead arranger for the syndication of the remaining $40 million.

Also during 2014, the Company exercised the full balance of options with Helios and Solstice which yielded $33.3 million. The combination of the cash from these options, the cash being generated by the Group's existing producing wells and the availability of the RBL facility is expected to enable the Group to execute the planned work programme on its assets.

The Group began the year with consolidated cash and cash equivalents of $3.8 million and finished the year with $15.0 million having raised $33.3 million from the exercise of the options mentioned above. The cash was invested as to a net $6.0 million in operations and $15.9 million on enhancing the Group's assets, including $7.0 million on the acquisition of a 40% interest in Ubima, a participating interest in a marginal field acquired in August 2014, and, $3.9 million for the award of pioneer tax status on OML 40 in May 2014.

2015 Financial Outlook

The Company has recently drawn down its first $10 million from the RBL and will be applying it to the commencement of its planned work programme for 2015. The immediate focus on the finance side will be to extend the facility to the full $75 million syndicated amount which will, along with cash flows from operations, be applied to accelerate development of the Opuama field and grow the Company's net production to our desired 2015 exit rate and beyond.

Louis Castro

Chief Financial Officer

Consolidated Income Statement

For the year ended 31 December 2014

All activities relate to continuing operations.

Consolidated Statement of Comprehensive Income

For the year ended 31 December 2014

Consolidated Balance Sheet

As at 31 December 2014

Consolidated Cash Flow Statement

Year ended 31 December 2014

For further definitions and detailed accounts, please see our full audited 2014 Annual Report & Accounts on the Company website: www.elandoilandgas.com.