Interim Results

28 February 2014

Victoria Oil & Gas Plc

("VOG" or the "Company")

INTERIM FINANCIAL REPORT FOR THE SIX MONTHS ENDED 30 NOVEMBER 2013

Victoria Oil and Gas Plc (AIM: VOG), the emerging African energy utility company, is pleased to announce its unaudited interim results for the six months ended 30 November 2013.

Financial Highlights

· Operating profit for the period of $3.7 million (2012: Loss $3.7 million)

· Revenue for the period of $6.0 million (6 months to 30 November 2012: $1.7 million, 12 months to 31 May 2013: $6.9 million)

· Revenue during the period comprised:

o gas sales totalling $5.4 million at $16 per million British thermal units (6 months to 30 November 2012: $1.5 million, 12 months to 31 May 2013: $6.3 million)

o condensate sales totalling $0.6 million at an average price of $107.22 per barrel (6 months to 30 November 2012: $0.2 million, 12 months to 31 May 2013: $0.6 million)

· Improvement in liquidity of the Group with Net Current Assets of $12.3 million (6 months to 30 November 2012: Net Current Liabilities $27.6 million, 12 months to 31 May 2013: Net Current Liabilities $1.7 million)

Operational Highlights

· Inauguration of gas plant and pipeline by President Biya in November 2013

· Production levels rose from 2.0mmscf/d in July 2013 to 3.2mmscf/d in February 2014 and

Gaz du Cameroun operational break-even at these levels

· Collaboration agreement with AES-Sonel to evaluate supply of gas for 45MW of power generation

· All 1.5MW gensets cleared customs and at customer plants

· BGFIBank loan for XAF 4,000,000,000 ($8.3 million) drawn down

· Resolution of RDL- RSM arbitration

· Permits for drilling under Wouri River to access Bonaberi market received

For further information, please visit www.victoriaoilandgas.com or contact:

CHAIRMAN'S STATEMENT

Dear Shareholder,

I am pleased to present the Group's unaudited interim results for the six months to 30 November 2013 and to update you on recent corporate and operational developments.

This reporting period was one of the most significant in the Group's history. We faced serious challenges to operational delivery in Cameroon and the Board took comprehensive steps to address these issues.

Following the departure of John Scott, as announced at the end of September 2013, I assumed the role of interim Chief Executive. Since then we have provided comprehensive updates to the market on the Group's strategy, operations and the changes that we were implementing. The business principles guiding these changes were to:

· Quickly turn revenue into profits

· Aggressively build our market share

· Preserve the highest standards of safety, environmental compliance and corporate governance

These changes were undertaken at all levels of the Group, primarily at an expatriate level, with the senior management team in Douala being strengthened by way of new appointments in the operations, project management and sales & marketing departments. Internal systems were also overhauled with regard to the assessment of production forecasting and expansion of operations. Real production growth has been achieved.

Importantly, all changes have been successfully implemented with no further dilution to shareholders during this financial period.

We have recognised for some time that the Board of Directors needs to be substantially strengthened and with this in mind we are currently finalising the selection process for Non-Executive Directors. Announcements regarding such appointments will be made in due course.

Logbaba, Cameroon

A key event was the visit by the President of the Republic of Cameroon, His Excellency Paul Biya, to inaugurate our gas plant and pipeline on 15 November 2013. Not only did the President endorse our efforts and achievements, but he also emphasised the importance of gas as a cleaner and more efficient strategic energy source for the country. The visit attracted a lot of national press coverage and we have now earned recognition as an energy provider and growing utility company in Cameroon. This compliments our rebranding of Rodeo Development Ltd ("RDL") to Gaz du Cameroun S.A. ("GDC").

Our project teams are now focussed on:

· Pursuing and delivering against realistic targets set for pipeline laying, connection of new customers to the pipeline network and installation and commissioning of gas fired generators ("gensets")

· Building robust project management skills, tools and procedures that will form a sustainable base for future growth

· Re-emphasising the quality and health & safety elements of our business and the importance of community engagement and support

Key Developments at Logbaba

· Production levels have risen from an average of 2.0mmscf/d in July 2013 to 3.2mmscf/d in February 2014. At these current production levels we are now achieving operational break-even at Logbaba

· Total Production for the project for 6 months to 31 December 2013 was 364.3mmscf (6 months to 30 November 2012: 89.8mmscf, 12 months to 31 May 2013: 367.7mmscf). To date we have shipped 14,453 bbls of condensate

· At the period end we had made 19 gas thermal customer connections (currently 20, 31 May 2013: 19, 30 November 2012: 4) and one condensate customer.

· We currently have 15 additional thermal gas and 8 power agreements signed

· Glass manufacturer SOCAVER, part of the SABC group, was brought online in February 2014, consuming an average of 0.3mmscf/d with a peak demand estimated at 0.7mmscf/d

· GDC has also reached an agreement with Dangote, a major cement manufacturing company, to supply gas for its thermal energy requirements. GDC anticipates that the Dangote connection will be completed during Q2 2014 and it is anticipated that gas consumption will be in the order of 0.4mmscf/d

· All six 1.5MW gensets have cleared customs and are being installed at customer plants

· A collaboration agreement with AES-Sonel, the sole electric utility company in Cameroon, has been successfully negotiated. GDC and AES-Sonel will work on a technical and operational plan to progressively replace Heavy Fuel Oil and Light Fuel Oil power generation stations with gas-fired generation. It is currently intended that GDC will initially supply gas to temporary units with a combined generating capacity of 45MW. This first stage is targeted to be online by July 2014

· Now that Phase I and Phase II trunk lines have been commissioned with gas, our teams are focussed on building spur connections to customers along the line

· We have also received permits to enable us to drill under the Wouri River and lay pipe to access the gas market in Bonaberi

· Draw down on the XAF 4,000,000,000 ($8.3 million) BGFIBank loan facility

Other News

Details of the Award of the ICC International Court of Arbitration were published on 11 December 2013. The Tribunal found that RSM Production Corporation ("RSM") had not forfeited its interest in the Logbaba project but had a continuing obligation to pay the outstanding cash call to RDL (now GDC). As a result, from 30 November 2013 to date, the Group has received over $20 million from RSM and has reached an agreement to constructively work together to realise the full potential of the Logbaba Project.

The Group's participating interest in Logbaba now stands at 60% through VOG's wholly owned subsidiary, GDC, with 40% held by RSM. The Government owned Société Nationale des Hydrocarbures ("SNH") is entitled to a 5% interest and we are working with them on a participation agreement.

At West Medvezhye, Russia, the Company is looking at a number of ways to derive value from West Medvezhye through farm-outs, joint ventures or mergers.

It is very pleasing to announce a profit for this period. However we acknowledge that this is essentially a reflection of the accounting adjustments made following the aforementioned ICC judgement. The full detail of the accounting treatment in this regard is set out in Note 3 of the unaudited interim condensed consolidated financial statements below.

In conclusion, 2013 was a very challenging one where hard decisions were needed and a strong refocus of the company on its core business which was to deliver a reliable gas energy source to customers. We now have the financial resources and the management team to achieve this.

Kevin Foo

Chairman

28th February 2014

FINANCIAL REVIEW

Income Statement

Revenue from the Logbaba project was $6.0 million in the six months to 30 November 2013, compared to $1.7 million in the comparative six month period, reflecting the expansion of our customer network. All gas sales were at $16/mmbtu and condensate sales averaged $107.22 per barrel.

Production royalties were $1.9 million or approximately 32% of revenue, $1.4 million of which is payable to a company in which the Group holds a 35% interest. That royalty stream will decline based on achieving certain revenue milestones such that the long term cash cost of all royalties is expected to average 17% of revenue. The $2.9 million of 'Other cost of sales' relates to operation of the wells, processing facility and pipeline network and includes $2.0 million of depreciation. Gross profit was $1.2 million compared to $0.1 million in the comparative six month period.

An income statement adjustment of $5.2 million at 1 June 2013 was necessary to reflect the outcome of the ICC Arbitration between RSM and the Group (refer to Note 3 in the unaudited interim condensed consolidated financial statements for further details). Excluding this non-recurring item, EBITDA was $0.7 million.

The profit before and after taxation for the half year was $2.5 million. Excluding the aforementioned non-recurring income statement adjustment, the Group recorded a loss of $2.6 million for the period compared to a loss in the comparative period of $5.3 million, reflecting the increase in production and the reduction in administrative expenses.

Balance Sheet and Cash Flow

The Group continued its expansion of the pipeline in Cameroon, investing $9.0 million (six months to 30 November 2012: $5.2 million). In Russia, an investment of $0.4 million (six months to 30 November 2012: $0.6 million) was made to define drilling targets.

Excluding the impact of the ICC Arbitration adjustment, working capital increased by $1.8 million, reflecting an increase of $5.4 million in trade and other receivables and an increase of $3.6 million in trade and other payables.

Net cash decreased by $11.7 million in the six months to $1.4 million. Following the year end, the Group raised $8.3 million of debt financing and has received a total of $20.4 million to date from RSM, being a payment on account for its share of downstream development costs for the Logbaba project. The total of these costs is subject to an audit to be conducted within 90 days of 1 April 2014.

Going Concern

The Directors are satisfied that the Group has sufficient resources to continue operations for the foreseeable future, being a period of not less than twelve months from the date of this report. Accordingly, they continue to adopt the going concern basis in preparing the condensed financial information.

Outlook

Our financial strategy continues to be to develop the Logbaba asset, financed by a mixture of debt and equity, into a significant cash-generating asset in order to support future growth of the Group.

Robert Palmer

Finance Director

UNAUDITED CONDENSED CONSOLIDATED INCOME STATEMENT

FOR THE SIX MONTHS ENDED 30 NOVEMBER 2013

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE SIX MONTHS ENDED 30 NOVEMBER 2013

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET

AS AT 30 NOVEMBER 2013

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE SIX MONTHS ENDED 30 NOVEMBER 2013

UNAUDITED CONDENSED CONSOLIDATED CASH FLOW STATEMENT

FOR THE HALF YEAR ENDED 30 NOVEMBER 2013

NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 NOVEMBER 2013

1. GENERAL INFORMATION AND BASIS OF PREPARATION

The unaudited interim condensed consolidated financial statements of Victoria Oil & Gas Plc and its subsidiaries ("the Group") are prepared in accordance with International Financial Reporting Standards ("IFRS") and in accordance with International Accounting Standard 34 'Interim Financial Reporting'.

The interim condensed consolidated financial statements do not include all the information and disclosures required in the annual financial statements and should be read in conjunction with the Group's annual consolidated financial statements as at 31 May 2013.

2. ACCOUNTING POLICIES

The accounting policies adopted in the preparation of the interim condensed consolidated financial statements are consistent with those followed in the preparation of the Group's annual consolidated financial statements for the year ended 31 May 2013, with the exception of the following:

Adoption of new and revised Standards

The following new and revised Standards have been mandatorily adopted by the Group during the period. Their adoption has not had a material impact on the financial statements of the Group.

3. ADJUSTMENT RESULTING FROM ARBITRATION DECISION

On 11 December 2013, the International Chamber of Commerce ("ICC") published its decision on the Arbitration brought by RSM Production Corporation ("RSM") against the Group. A number of claims were withdrawn or rejected but the ICC found that RSM had not forfeited its interest in the Logbaba project due to its failure to pay its cash calls on time.

The Tribunal found that RSM was in default for non-payment of the cash calls. It also found that whilst the parties had conflicting but equally plausible interpretations of the First Arbitration Award in May 2011, there was sufficient uncertainty in the resulting application of the findings in that Award to the contractual forfeiture provisions under Texas law to avoid upholding the forfeiture of RSM's interest.

In the six months to 30 November 2012 and twelve months to 31 May 2013 (the comparative periods for the purposes of this report), the financial statements were prepared on the basis that RSM had forfeited its interest in the Logbaba Concession as that was the legal contractual position pending clarifications in the Arbitration, which the Directors expected to be resolved in the Group's favour.

These interim financial statements for the six months to 30 November 2013 include an adjustment as at 1 June 2013 necessary to reflect the ICC Arbitration decision on the participating interests in the Logbaba gas and condensate project. The adjustment has resulted in:

· a credit of $5.2 million to the income statement in relation to RSM's share of prior period operating expenses. An analysis of these costs which were expensed through the income statements in prior periods, is as follows:

· the following Balance Sheet reclassifications to record the transfer to RSM of its participating share of assets and liabilities incurred on the project. Previously these assets and liabilities had been accounted for as if they were held 100% by the Group:

Please refer to Note 12 for further information regarding the RSM Arbitration.

Société Nationale des Hydrocarbures ("SNH"), the state-owned national oil and gas company of Cameroon, is entitled to acquire a 5% interest in the Logbaba Concession but has not yet signed a participation agreement. Accordingly, these interim financial statements have been prepared on the basis that the Group and RSM have 60% and 40% interests respectively in the Concession. In the event that SNH signs the participation agreement for its 5% interest, the interests of the Group and RSM will be reduced to 57% and 38% respectively, and SNH will be required to reimburse 5% of costs relating to the project to date.

4. SEGMENTAL ANALYSIS

The Group operates in one class of business being oil and gas exploration, development and production, and the sale of hydrocarbons and related activities. This is analysed on a location basis. Only the Cameroon segment is generating revenue, which is from the sale of hydrocarbons. The accounting policies of the reportable segments are the same as the Group's accounting policies.

The following tables present revenue, profit/(loss) and certain asset and liability information regarding the Group's business segments:

5. EARNINGS/(LOSS) PER SHARE

Basic earnings or loss per share is computed by dividing the profit or loss after tax for the year available to ordinary shareholders by the weighted average number of ordinary shares in issue and ranking for dividend during the year, excluding those held by the ESOP Trust. Diluted earnings or loss per share is computed by dividing the profit or loss after taxation for the period by the weighted average number of ordinary shares in issue, each adjusted for the effect of all dilutive potential ordinary shares that were outstanding during the period.

Basic and diluted loss per share are the same, as the effect of any potential shares is anti-dilutive and is therefore excluded.

The following table sets forth the computation for basic and diluted loss per share.

6. INTANGIBLE ASSETS

Segmental Analysis

During the period, $0.2 million previously recognised as intangible assets in the Cameroon segment was transferred to other receivables following the outcome of the ICC arbitration with RSM. Refer to Note 3 and Note 12 for more details.

7. PROPERTY PLANT AND EQUIPMENT