Final Results for the year ended 31 December 2012

29 May 2013

ELAND OIL & GAS PLC

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

Final Results for the Year ended 31 December 2012

Eland Oil & Gas PLC (AIM: ELA), an oil & gas development and exploration company operating in West Africa with a principle focus on Nigeria, is today pleased to announce its audited results for the year ended 31 December 2012. The highlights are:

A historic year in the development of Eland Oil & Gas with financing and acquisitions being the key milestones.

Operational Highlights

·; Eland, through its joint venture Company, Elcrest Exploration and Production Nigeria Ltd, on 31 August 2012 concluded the purchase of a 45% interest in Oil Mining Lease ('OML') 40, which is located in the prolific Niger Delta in Nigeria.

·; The acquisition, secured for $154 million, was purchased from Shell Petroleum Development Company Nigeria Ltd (30%), Total E & P Nigeria Ltd (10%) and Nigerian Agip Oil Company (5%).

·; The Company agreed a 2013 work programme and budget for OML 40 with the Nigerian Petroleum Development Company ('NPDC'), the operator of OML 40, which has a 55% equity interest in the lease.

·; The Company has also secured an option from Amocon to acquire a 40% interest in OPL 452, an exploration block, which is also located in the Niger Delta in Nigeria. The option is open until 31 December 2013.

Financial

·; Eland concluded a capital raise of £118 million in 2012, and listed on the AIM of the London Stock Exchange.

·; The Company negotiated a bridge debt facility for $22 million with Standard Chartered Bank PLC ('SCB') in London, available to the Company on first production from OML 40.

·; The Company negotiated two £10 million equity options with key shareholders available to the Company in 2013.

·; The Group is funded for its 2013 work programme through cash balances and debt facilities already agreed.

·; The Group has reduced its loss position from $17.7 million (2011) to $14.2 million (2012).

Outlook

·; First oil from OML 40 anticipated for Summer 2013 with initial production of 2,500 bopd expected from the re-commissioning of the Opuama production facility and crude export line.

·; The initial two well drilling programme on Opuama has been agreed with NPDC.

·; An updated Reserves and Resources report will be available mid-year 2013.

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

'2012 has been a pivotal year for Eland where the completion of our first acquisition allows the company to embark on our strategy to become a large upstream independent focused on West Africa. The last 6 months of 2012 saw intense activity for Eland with the listing on AIM, securing of the debt package with Standard Chartered Bank and the organisation build up including support infrastructure.'

The Company's audited 2012 Annual Report & Accounts have been posted on the Company's website www.elandoilandgas.com.

For further information:

Eland Oil & Gas PLC (+44 (0) 207 016 3180)

Les Blair, CEO

George Maxwell, CFO

Edward Cozens, IR

Canaccord Genuity Limited (+44 (0) 207 523 8000)

Henry Fitzgerald-O'Connor

Peter Stewart

Citigate Dewe Rogerson (+44 (0) 207 638 9571)

Martin Jackson

Jack Rich

Cautionary statement regarding forward-looking statements

This Annual Report 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", "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 our 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 Annual Report, whether as a result of new information, future events or otherwise.

Chairman's Statement

A warm welcome to all shareholders reading our first annual report since Eland listed on AIM in September last year. The listing was the culmination of two years of hard work negotiating the acquisition from Shell, Total and ENI of a 45% interest in Nigerian license OML 40 for $154 million. We are now working closely with NPDC (the Government Operator) to bring the shut-in wells back on to production as well preparing for drilling on the numerous other targets in the block. We are also looking at new opportunities which fit our ambitious strategy.

Nigeria dominates the Sub-Saharan Africa oil scene on all fronts - production, remaining reserves, and drilling success rates - with vast undrilled areas remaining to be developed. The competition is relatively light due to the perceived difficulties of doing business in Nigeria but this is changing rapidly and the last two years has seen a number of new international companies acquiring assets. The key to success is having a management team that knows both the technical/operational issues and how to do business in the country. We believe that Eland is uniquely placed to take advantage of these factors with its deeply experienced executive team having worked successfully in-country for many years and with our Chief Executive, Les Blair, based in Abuja. Our strategy is to acquire further development assets and to add reserves through the drill-bit. Our current focus is Nigeria but we expect to broaden our asset base into other parts of Africa as the Company grows.

OML 40 is an exciting asset with significant upside. Initial estimates of gross 2P reserves were certified as 71.5 million bbls but we expect this to be revised upwards as work on the asset progresses. A number of oil discoveries have been made and many more prospects remain to be drilled, but only Opuama has been partially developed. Included in the acquisition were the production facilities and export pipeline from the Opuama field together with 3D seismic data which is currently being reprocessed.

The producing Opuama field was shut-in in 2006 when Shell closed down a number of its operations in the Niger Delta. At that time, some 43 million bbls had been produced from the field and our estimate is that there are a further 42 million bbls (certified gross 2P reserves) remaining at Opuama. We see additional upside in the field through optimising new well locations using 3D seismic. The first step is to re-commission the flow station and bring back on-stream 2 wells which we believe will give us initial production in excess of 2,500 bopd. This will be followed by additional drilling through which we hope to push production over 10,000 bopd by the end of 2013. Together with NPDC, we are working to secure a swamp rig on a long-term contract which we hope to conclude shortly. This will be a key step in our programme to unlock the potential of the licence which Shell evaluated as 356 million bbls of prospective resources and we consider could be more.

The financial performance for 2012 (a loss of $14.2 million) primarily reflects the costs of acquiring OML 40, securing the listing on AIM and raising the equity and debt facilities for the Company. At the end of 2012 our cash and cash equivalents were $24.5 million with undrawn bank debt facilities of $22 million.

I would like to thank all the stakeholders in Eland for their support since 2010, particularly our shareholders and advisors who have shared the journey with us. We have an experienced Board who have been diligent in implementing appropriate corporate governance procedures for our area of activities. We now have offices in Abuja, Aberdeen and London and we are building up the staff levels in line with operational requirements. Our aspiration is that through our people we become the leading international independent oil company working in Nigeria - we have made a good start.

The future for Eland is inextricably linked to the Niger Delta for which the signs are good. The reserves story is compelling and with the price of Brent averaging over $100 per bbl for the last two years the investment case is sound. Our experienced management are in a strong position to enable Eland to benefit from this opportunity.

Harry Wilson

Chairman

29 May 2013

Chief Executive Officer's Report

In this, my first report to shareholders since we listed the Company in 2012, I am delighted to report on a highly successful year for Eland Oil & Gas.

We have fulfilled all of our initial objectives, which were to secure the acquisition of OML 40 in Nigeria which we have pursued since 2010, to list the Company on the AIM in London and to secure long-term debt financing for future development. During 2012 Eland has been transformed from a start-up private company, to a fully funded publicly listed entity.

The journey began in 2010 when George Maxwell, Harry Wilson and I set up Eland with seed funding of £4.5 million and we were ultimately rewarded through the completion of the OML 40 acquisition and the successful admission to AIM on 3 september 2012.

This success has been achieved through resilience and stamina on the part of the founders and management and the unwavering support received from our investors, most of who have been with us on the journey since 2010.

Pre-Listing Period

During the first half of 2012 we focussed on the funding and completion of the OML 40 transaction, including the commissioning of an environmental impact assessment on OML 40, conducted by RPS, and an updated OML 40 Competent Person's Report (CPR) on reserves completed by McDaniel in June 2012.

During this period the operations staff based in Nigeria completed a development plan for the Opuama field re-commissioning which involves the opening of the existing 2 wells which were closed during a controlled shut down in 2006 by Shell and the rehabilitation of the existing production facilities, including the repair of the crude oil export pipeline to Otumara. Otumara is the custody transfer point, where the oil produced from OML 40 is injected into the Trans Escravos pipeline network for ultimate delivery into the Forcados terminal operated by the Shell group.

We have also negotiated a five year off-take agreement with Shell for the oil production providing cash flow security in the initial re-start production period.

Staffing and Infrastructure

Following completion of the OML 40 transaction last year there has been a very significant increase in operational activity and in staffing for the Group where we have added both to our UK and Nigeria based staff. We now have offices fully operational in Abuja, London and Aberdeen.

The London office staff will focus on investor relations and project evaluation whilst in Nigeria, we are building a technical and operations team to work alongside NPDC on OML 40 and to pursue further opportunities in Nigeria and in West Africa.

Technical Data - Post-Completion

Post-deal completion on OML 40, Shell transferred all historic technical data dating back almost 50 years. This information has provided an invaluable insight into the performance of the existing Opuama wells to be re-opened and also into overall reservoir performance.

The Opuama re-entry budget was agreed with NPDC in December 2012 where the initial plan was for completion of the re-entry project by April 2013. This has been delayed primarily due to contracting issues, but work continues to progress toward this significant milestone for both Eland and NPDC.

Additionally we have, in partnership with NPDC, reprocessed the 3D seismic data set with excellent results and prepared a Field Development Plan for the full Opuama development.

The full development of Opuama is premised on drilling a number of new production wells starting with two wells in 2013, Opuama OP 8 and 9, which will be directional wells located close to the existing production facilities. The technical well designs have been largely completed in coordination with NPDC and we remain confident of the significant benefits that the development drilling programme will deliver in 2013.

Outlook 2013

As we look back on the activities already completed to date in preparation for first production on OML 40 in 2013 and the subsequent full development of the Opuama Field, i am delighted to be able to tell you that we have established an excellent working relationship with our partner NPDC and we are confident that we will achieve our mutual goals and objectives in 2013.

OML 40 is the cornerstone asset for Eland and to provide a platform for success we have worked closely with NPDC on the forward planning for the full OML 40 development, which will result in rapidly increasing production, which is a key target for both companies. Working closely with NPDC in mobilising a swamp drilling unit will be a key component to success in 2013.

In February 2013 we contracted Netherland, Sewell & Associates Inc. (NSAI) to prepare a detailed update of the Reserves and Resources on OML 40 where NSAI are very experienced in West Africa and represent a number of the leading independents operating in this region. This will provide the most comprehensive update on reserves since the McDaniel report in 2012 and will include a more detailed technical review on historic performance and the future development of OML 40 reserves utilising the information received from Shell post-completion. We are also conducting detailed studies of both contingent and prospective resources using the 3D seismic and the existing well databases and we are all excited at the anticipated results that such a detailed review will deliver. The report is expected to be available towards mid-year 2013.

Our focus has been and will remain on West Africa, with Nigeria as our heartland of operations. We continue to evaluate and pursue opportunities and in March this year we announced that we had secured an option to acquire 40% equity in an exploration licence, OPL 452. This option provides an exciting opportunity to expand further our technical capabilities in a very attractive and prolific oil and gas basin.

I am looking forward to an exciting 2013 where we will have production re-established on OML 40 and we expect further acquisitions. We believe we are ideally placed to expand our portfolio significantly not least because the operational management and I are based in Nigeria.

Les Blair

Chief Executive Officer

29 May 2013

Chief Financial Officer's Review

Key Financial Highlights

·; Completed £118 million fund raise and listed Company on AIM

·; Finalised $22 million debt facility with Standard Chartered Bank

·; Secured $14 million trade finance line with Standard Chartered Bank

·; The Group has reduced the loss position from $17.7 million (2011) to $14.2 million (2012)

·; Ended 2012 with $24.5 million of cash and cash equivalents enabling 2013 budget to be fully funded

Review of 2012

The completion of the fund raise of £118 million, in difficult market conditions, was the key highlight for 2012. The successful raise during August facilitated the completion of the listing process and purchase of the interest in OML 40. The Company also secured an excellent shareholder register reflective of the long-term support of many of the existing shareholders.

This shareholder support continued to be evidenced with the inclusion of two £10 million options issued by the Company at time of listing to two key shareholders.

Helios Investment Partners, through a subsidiary company, agreed to support Eland with a 2 year £10 million option where Eland can call these additional equity funds at any time after the initial 12 months from issue. This was priced at listing and the option for the holder allows a put at any time during the period, under certain restrictions.

Solstice International Investment Inc has an identical option providing the Company with up to £20 million of funding available from the 3rd quarter of 2013 if required. This adds an additional level of security in our planning cycle for OML 40 development.

In August 2012 the Company agreed an 18 month debt facility with Standard Chartered Bank in London for bridge financing of $22 million which is accessible from first production. The Company has initiated discussions for refinancing options for the bridge facility, and anticipate completion of this in 2013. The commercial structure within the Group enabled Eland to support our joint venture company, Elcrest, in the procurement of the OML 40 interest and the continued support for the development of the asset. In the 4th quarter the Company also negotiated a $14 million trade finance line with Standard Chartered Bank and utilised this line to provide a standby letter of credit in support of our obligations on OML 40.

Eland had previously secured funding through a combination of Loan Notes and equity. The completion of the listing allowed the Company to settle outstanding Loan Note interest liabilities through cash or conversion to new shares. The majority of this was settled through the issue of additional equity, maximising the retained cash deposits for investing activities.

The combination of these actions, preserving cash, securing debt and trade finance lines, the provision of the £20 million options and the cash retained post completion of OML 40 ensure that the Group is fully funded for the full 2P development activities planned for OML 40. Ensuring a fully funded position for our development plans will continue to be key actions for the Group going forward in 2013.

The Group loss of $14.2 million for 2012 was an improvement of $3.5 million on 2011 ($17.7 million loss). The major key factors contributing to the loss in 2012 were the $3.2 million of costs relating to admission to AIM, an increase in G & A costs as staffing numbers increased in Nigeria and the UK, additional legal and

consulting expenses related to the debt agreement with Standard Chartered Bank and technical costs relating to our Competent Person's Report. this was partly offset by a significant reduction in financing costs as a result of redeeming the principal amount of the 2nd round loan notes in 2011, and freezing the interest due on the 1st and 2nd round notes. All of the 1st and 3rd round loan notes have been converted during 2012 including a portion of the interest amounts due to note holders amounting to $2.5 million (this figure includes interest amounts due to 2nd round loan note holders).

2013 Financial Outlook

The outlook in 2013 remains focussed on first oil from OML 40. The planned first oil date has been delayed as mentioned earlier, and therefore the importance of having the cash contingencies to accommodate these delays is critical in oil & gas developments. In 2013 the Company will look to re-financing opportunities to expand the existing agreed facilities. The completion of a detailed Reserves and Resources report mid-year will be the basis to initiate this review.

George Maxwell

Chief Financial Officer

28 May 2013

Consolidated Income Statement

For the year ended 31 December 2012

All activities relate to continuing operations.

Consolidated Statement of Comprehensive Income

For the year ended 31 December 2012

Consolidated Balance Sheet

As at 31 December 2012

Consolidated Cash Flow Statement

Year ended 31 December 2012

For further definitions and detailed accounts, please see our full audited 2012 Annual Report & Accounts on the Company website: www.elandoilandgas.com.