Drilling Update, Rig Secured and CPR Commissioned

For Immediate Release, 7 am 8 December 2014

LGO ENERGY PLC

("LGO" or the "Company")

Drilling Update, Rig Secured and CPR Commissioned,

Goudron Field, Trinidad

LGO today announces that its eighth well, GY-671, has reached total depth at 3,598 feet measured depth ("MD") on 6 December and has been electrically logged and has been cased for completion as a C-sand producer. Production from wells GY-669, GY-670 and GY-671 is expected to be brought online over the next few weeks.

A net oil pay interval of 244 feet has been measured on the electric logs in the C-sand of GY-671 and this will be completed along with the previous two wells, GY-669 and GY-670. The first well to be completed for production will be GY-670 where 177 feet of perforations are planned.

During 2014, LGO has drilled 8 wells, GY-664 to GY-671 using Well Services Rig 20. The drilling results from these wells are being used to develop a new Competent Persons Report ("CPR") due to be published in February 2015 by Senergy (GB) Limited. The previous CPR, published by Challenge Energy Limited in July 2012, showed over 30 million barrels ("mmbbls") of proven, probable and possible (3P) reserves and over 63 mmbbls of (3C) contingent resources at Goudron.

In addition, the Company has signed a new contract with Well Services Petroleum Company Limited ("Well Services"), Trinidad's largest drilling contractor, for the supply of Rig 70 for the 2015 drilling programme and the next phase of the planned 30 well development drilling programme will commence as soon as the fourth drill pad ("Pad-4") is available, which is expected to be in early 2015. 

The Well Services' Rig 70 is a smaller, more mobile rig, and will replace the larger Rig 20. Rig 70 is equipped to drill to 4,000 feet MD with 5-inch drill pipe and deeper with 3 ½-inch drill pipe. The Company anticipates that the use of the smaller Rig 70 will reduce the overall cost per well in the 2015 drilling programme and potentially allow for new wells to be completed shortly after they have been drilled.

Neil Ritson, LGO Chief Executive, commented:

"The latest three wells at Goudron have now been drilled and cased and we expect to have these on production over the next few weeks. We will continue our highly successful drilling campaign at Goudron in early 2015 once Pad-4 has been constructed."

"Given our successful drilling campaign we are naturally hopeful that the new CPR will show a significant increase on the reserves and resources previously announced. We are not expecting recent negative movements in oil price to impact the reserves as the project economics are very robust."

A summary of the drilling program results to date is given in the Appendix below. 

Competent Person's Statement:

The information contained in this announcement has been reviewed and approved by Neil Ritson, Chief Executive Officer and Director for LGO Energy plc, who has over 35 years of relevant experience in the oil industry. Mr. Ritson is a member of the Society of Petroleum Engineers (SPE), an Active Member of the American Association of Petroleum Geologists (AAPG) and is a Fellow of the Geological Society of London.

The estimates provide in this statement are based on the Petroleum Resources Management System ("PRMS") published by the Society of Petroleum Engineers ("SPE") and are reported consistent with the SPE's 2011 guidelines. A copy of the PRMS is available at www.spe.org/industry/reserves.php.

All definitions used in this announcement have the meaning given to them in the PRMS.

Reserves Data:

Source: Challenge Energy Limited, July 2012

Contingent Resources Data:

Source: Challenge Energy Limited, July 2012

Enquiries:

LGO Energy plc

Beaumont Cornish Limited

Old Park Lane Capital Plc

Pelham Bell Pottinger

Appendix:

All depths are quoted as measured depth in feet below Kelly bushing

* Currently being reassessed

** Not logged

Glossary: