Commencement of Production on OML 40

5 February 2014

Eland Oil & Gas PLC

 ("Eland" or the "Company")

Commencement of Production on OML 40

Eland Oil & Gas PLC (AIM: ELA) is delighted to announce the commencement of oil production from the Opuama oil field located on the OML 40 license, onshore Nigeria.

Following successful testing and commissioning of the field facilities, oil production from the Opuama field ("Opuama") started on 4 February 2014. Production has recommenced through the successful re-commissioning of existing infrastructure and the re-opening of two existing wells. Gross output from these two wells is expected to stabilise in aggregate at around 2,500 barrels of oil per day. The crude oil produced will be delivered to the Shell Forcados export terminal via our recently re-commissioned flowstation and export pipeline, with a capacity to export up to 30,000 barrels a day.

Opuama is operated by the Nigerian Petroleum Development Corporation ("NPDC"). The field, which has gross recoverable 2P reserves of 54.2 MMbbl, was in production between 1975 and 2006 before SPDC undertook a controlled shut down of the facilities.

NPDC holds a 55% interest in OML 40. The remaining 45% interest is owned by Eland's joint venture company, Elcrest Exploration and Production Nigeria Ltd.

Eland, on behalf of all the Opuama field stakeholders, would like to thank all the individuals and companies that have contributed to the achievement of this very significant milestone in the development of the field.

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

"The commencement of production on OML 40 has been much anticipated by management and investors alike, and indeed by all stakeholders. It is a testament to the dedication and hard work of all stakeholders in OML 40 and is a hugely significant milestone for Eland.

We look forward enthusiastically to the prospect of building on this pivotal turning point by materially increasing the daily production through the planned development drilling during 2014."

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