Farm-out of Block 3/23 (split), UK North Sea

ENEGI OIL PLC

AIM ticker: 'ENEG'

OTC ticker: 'EOLPF'

31 January 2013

Enegi Oil Plc

("Enegi" or "the Company")

Farm-out of Block 3/23 (split), UK North Sea

Enegi, the independent oil and gas company, is delighted to announce that it has reached agreement with Azimuth Limited ("Azimuth") with a view to farming-out part of Block 3/23 (split) (the "Block"), in the UK North Sea, to Azimuth.

The Block contains the Malvolio prospect (the "Malvolio Area") with the remaining acreage on the Block being made up of potential exploration opportunities (the "Exploration Area"). Under the agreement, Azimuth, given their extensive exploration expertise, will earn a 50% interest in the Exploration Area in exchange for the completion of an agreed work programme that includes certain geological, geophysical and reservoir analysis utilising existing seismic and well data in respect of both the Malvolio Area and the Exploration Area. The above transaction is subject to completion of documentation and all appropriate regulatory approvals.

Highlights:

- Enegi and ABTechnology ("ABT") will transfer a 50% interest in the Exploration Area to Azimuth, or its appointed affiliate

- In return, Azimuth agrees to undertake all the geological, geophysical and reservoir work to assess the hydrocarbon potential of the Exploration Area within the first 12 months of signing the agreement

- Enegi and ABT will retain a 100% working interest in the Malvolio Area

- The work to be undertaken also includes agreed geological, geophysical and reservoir analysis over the Malvolio Area

- Azimuth is a well-funded, rapidly growing E&P company backed by Seacrest Capital, a Bermuda based energy investment group. Azimuth has extensive technical capabilities and expertise of exploration projects and is focused on creating value rapidly through technical excellence

Alan Minty, CEO of Enegi Commented:

"We are delighted to have reached agreement with the Azimuth team. We were only offered this Block just over three months ago and the fact that we are already moving ahead with our plans for it shows our desire to deliver and prove up the value that we believe is inherent not only in this asset, but also across our portfolio.

"We know the Azimuth team well and are delighted to be working with them on this project. They are a hugely experienced team backed by leading industry specialists with access to extensive resources, both in terms of data and people. There is also a strong strategic fit between our organisations, Azimuth has extensive expertise in exploration and specialises in the application of G&G work and analytical reservoir techniques whilst Enegi and ABT's skills set is focused on developing known discoveries.

"The combination of our two companies and evaluating both the Block's exploration opportunities and its known discovery is without a doubt the optimum way forward. We look forward to working with the Azimuth team and utilising their expertise across this project."

David Sturt, SVP of Azimuth commented:

"Azimuth is delighted to be entering into this agreement with Enegi. The combination of attractive exploration potential and a partner with the reputation and motivation of the Enegi team is compelling.

"Across its portfolio Azimuth is focused on creating value rapidly through technical excellence. We look forward to working with the Enegi team on North Sea Block 3/23 (split) and exploring further cooperation together."

Details of the Transaction

Enegi has reached agreement with Azimuth whereby Azimuth will gain a 50% interest in the exploration opportunities of North Sea Block 3/23 (split) currently owned 100% by Enegi and ABT. The exploration opportunities on the Block are defined as the acreage outside the Malvolio Area which contains the Malvolio prospect.

On completion of the transaction Enegi and ABT will transfer a 50% interest in the Exploration Area to Azimuth. In return for gaining this interest, Azimuth will assess the hydrocarbon potential of the Exploration Area and fund all the associated geological, geophysical and reservoir analysis costs in the first 12 months, following the signing of the agreement. This also includes agreed geological, geophysical and reservoir analysis work over the Malvolio Area. In the event that Azimuth does not undertake the agreed geological, geophysical and reservoir work, the Azimuth interest will revert to Enegi.

The above transaction is subject to completion of documentation and all appropriate regulatory approvals.

As previously announced on 14 March 2012, ABT has an option on Enegi's working interest in the Block.

Rationale for the Transaction

This transaction is completely in line with the Company's strategy of building up a balanced portfolio and proving up potential across these assets for the minimum of capital outlay. Upon completion of this transaction, Enegi will have a significant interest in a funded exploration programme which will assess the potential of the exploration acreage on the Block as well as significant interest in the development of a discovery in a known hydrocarbon region.

If either of these programmes proves to be successful the Board believes they will have the potential to add significant value to shareholders.

In Azimuth the Company is also bringing on board a partner with expertise and knowledge of the region with access to enormous quantities of data and subsurface specialists. Azimuth are also specialists, with an extensive track record, in geological, geophysical and reservoir related analytical techniques, entirely complimentary to the Company's own focus and skills set.

Block 3/23 (split)

Block 3/23 is located in the south-west margin of the East Shetland basin and contains the Malvolio prospect. This is a Paleocene appraisal opportunity within the upper Montrose Group sand. The Malvolio prospect is in water depth of 397 ft and is some 48 km from the nearest existing infrastructure and as such is considered to be isolated; however the STOIIP, as supplied by DECC, is between 153 and 326 MMBBL with a minimum and maximum unrisked recoverable range between 44 and 97 MMBBL.

This licence was awarded to Enegi in the 27th Seaward Licensing Round for UKCS last October. Enegi applied for this licence based upon on the identification and detailed evaluation of assets which the Company viewed was suitable for buoy technology as conventional development solutions may not have been economically feasible.

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About Enegi

Enegi Oil Plc is an independent oil and gas company. Current operations are focused on opportunities around the Port au Port Peninsula in Newfoundland, Canada, the Clare Basin in County Clare, Ireland, the UK North Sea and Jordan. The Port au Port Peninsula is located in western Newfoundland, which, although lightly explored, is in an active petroleum system with light oil having been discovered on a number of occasions. The Clare Basin is located in western Ireland and initial technical studies show that it has the potential to contain shale gas. The Company's licences in the UK North Sea benefit from significant previous exploration investment, and have been selected based on buoy technology operating criteria. The Company has also entered into the highly prospective Dead Sea and Wadi Araba in Jordan with its partner Korea Global Energy Corporation.

About Azimuth:

Azimuth Limited is a specialist E&P Company based in Hamilton, Bermuda. The business is backed by majority-owner Seacrest Capital Ltd and partners, a Bermuda based energy investment group.

Azimuth leverages the strength of its shareholders to acquire interests in prospective acreage worldwide and developing 'drill-ready' targets through robust geophysical and commercial analysis. Funding from Seacrest fuels Azimuth's global activities and ensures that the company is ready to advance its properties without delay. Azimuth has an extensive exploration portfolio in the UK, Norway, Ireland, Benin and Namibia.