Interim Results

NU-OIL AND GAS PLC

AIM symbol: 'NUOG'

31 March 2016

NU-Oil and Gas plc

("NU-Oil" or "the Company")

Interim Results for the six months ended 31 December 2015

NU-Oil, the independent Oil and Gas Company, today announces its interim results for the six months ended 31 December 2015.

Key points:

· Strategy focused on utilising redeployable engineering solutions that reduce Opex and Capex to build a portfolio of low risk highly appraised marginal assets

· Continuing focus on the development of portfolio through Marginal Field Development Company (formerly ABT Oil and Gas Ltd)

· During the period the Company raised £435,000 before expenses, primarily to implement its stranded and marginal field strategy and to facilitate the acquisition of projects

· Currently in discussions with regards to acquiring further projects which are expected to  become increasingly valuable as the market improves 

· Executed a mandate with Fearnley Securities which has particular expertise in maritime industries and will work with the Company to develop the appropriate models, structures and financing arrangements necessary to implement the business model

· The Company reports a loss of £472,000 for the period, a decrease of £611,000 in the loss reported over the corresponding period in 2014

· Implementation of the business plan will require an injection of new capital into the business - the Directors' believe that the additional capital should generate value in excess of any potential shareholder dilution

Nigel Burton CEO of NU-Oil commented:

"NU-Oil has a clear focused strategy for commercialising stranded and marginal fields based on solutions delivered by MFDevCo and the MFD Consortium which significantly improve the economics of developments. Despite some unforeseen delays, discussions are well advanced with a number of operators to secure projects that would positively impact upon the future of the Company both in the short and long term. The aim is to build a portfolio of projects and opportunities that do not expose NU-Oil to exploration and appraisal risk."

For further information please visit the NU Oil and Gas website www.nu-oilandgas.com or contact:

Note to Editors:

NU-Oil and Gas plc (NUOG) is an independent oil and gas company whose strategy is to build a diverse portfolio of assets with a strong emphasis on acquiring interests in stranded and marginal fields. These fields are producing or highly-appraised. NUOG will look to develop these assets utilising solutions delivered by Marginal Field Development Company ("MFDevCo" formerly ABT Oil and Gas Ltd) and the MFD Consortium, which can significantly improve the development economics of a project. This is also expected to enable the early booking of reserves. 

Marginal Field Development Company (formerly ABT Oil and Gas Ltd) (www.mfdevco.com)

Marginal Field Development Company ('MFDevCo') is a joint venture between RMRI (www.rmri.co.uk) and NU-Oil and Gas plc. It focuses on maximising recovery from the vast, undeveloped hydrocarbon resources contained within marginal fields worldwide, utilising appropriate re-deployable solutions to transform these undervalued assets. MFDevCo manages the entire lifecycle of marginal field projects from opportunity screening, suitability assessment and financing through engineering to production and decommissioning. The solutions developed can be used to:

· Realise the potential from marginal or stranded fields

· Extend the life of mature fields

· Rejuvenate fields with a previous or existing development solution that is currently sub-economic

· Defer decommissioning liabilities

· Provide early production systems

The Marginal Field Delivery Consortium www.mfdconsortium.com

The Marginal Field Delivery Consortium (the Consortium) is a collaborative partnership, established and led by MFDevCo, between upstream oil and gas industry specialists committed to developing hydrocarbon resources around the world which cannot be economically recovered using conventional methods. Through its members, the Consortium offers the technology and services required to deliver marginal oil and gas projects from project identification and concept selection through to operation and decommissioning, using cost-effective and re-deployable production solutions which transform the economics of marginal fields by reducing the development costs by up to 60% compared to using conventional solutions.

The Consortium is led by MFDevCo and also includes:

Arup - ACE platform and project management

Kongsberg - Control and automation systems for 'normally unattended' operations

Frames - Process and utility design for 'normally unattended' solutions

RMRI - Managing regulatory aspects of 'normally unattended' operations

Braemar ACM - Facility financing, yard broker and assistance with project acquisition

AGR - Drilling management and well design services

Apollo - NU-SIFT structural engineering

Aibel - Project management and EPC contractor

Chairman's Statement and Operational Review

The oil price environment, attitude towards the sector, cancellation of investment, and retrenching of companies might seem to represent a perfect storm of negativity but in our view it creates a tremendous opportunity to acquire projects that will become extremely valuable as the market improves. The signs that the market is improving are slowly starting to become evident and they will be strongly correlated to the oil price. Although confidence appears to be rising on claims that the oil price has 'bottomed out', this has not yet filtered through to increased activity.

With this in mind, during the period the Company's activities have continued with strong focus on the identification and evaluation of opportunities which can be developed with lower Capex and Opex solutions. Many opportunities have been considered and at this time, three significant opportunities have been identified where it would appear that utilising solutions delivered by MFDevCo and the MFD Consortium would improve the economics and justify the financing of the projects, with returns enhanced in the event that the expected increase in oil price materialises. Preliminary negotiations have commenced both with licensees and investors and, at this time, good progress is being made in these discussions. Once definitive and substantive terms have been reached on a particular project they will be reported to shareholders and the wider market in keeping with the Company's responsibilities.

An outcome of the general slow-down in oil sector activity, in addition to the deferring of existing projects, is that the project development process is taking longer than when the oil price was higher; this is to be expected with the caution which currently pervades the sector. But while progress for NU-Oil is most easily measured by project commencement announcements, actual progress is represented more widely with the acquisition of opportunities in various formats.

As with downturns in any sector, a number of opportunities to generate value as the market improves can be identified and then acquired. These opportunities arise as a result of companies adjusting their operating profile to function in the new environment and are characterised by deferment or cancellation of investment due to unfavourable project economics. The solutions that we offer change the project economics albeit at a time when the appetite of operators to sanction investment is low, although we believe this will change as market conditions improve. The Company needs to have the opportunity to utilise its access to low-cost development solutions once funding becomes more readily available.

The Company intends to take advantage of this downturn by positioning itself to create value when the market improves. The opportunities that we are striving to capitalise on take the form of oil and gas assets that have, in some cases, already been producing and that require a new development solution, greenfield opportunities that require the implementation of an economic solution and ancillary opportunities that are identified as a result of identifying the first two.

Despite the reduced appetite to invest in the sector the project economics generated by the implementation of the solutions that we have access to would, we believe, generate strong returns, even at the current oil price, and warrant investment consideration. The Company has executed a mandate with Fearnley Securities, a well-respected independent full service Norwegian investment bank with a strong global presence. Fearnley's particular expertise is in maritime industries and it will work with the NU-Oil to develop the appropriate models, structures and financing arrangements necessary to implement the business model. The Company will achieve this wherever possible through specific project finance in which we dilute our stake in a particular project through raising external capital rather than diluting our own capital structure.

While we pull all this together we are conscious of controlling NU-Oil's costs during this period. Consequently, we are seeking where possible to reduce our overheads and defer costs, and structure arrangements that will allow us to do that, until such time as the sector's sentiment changes and projects are at such a stage as to make them investible. An important part of that is the cost of Directors and they too are allowing cash to be preserved through the deferral of a significant element of their remuneration.

With respect to our assets in western Newfoundland, we remain convinced that they can be productive but in this environment the capital requirements necessary to achieve that are beyond the Company's reach. Consequently, we will be actively looking at alternative means by which these assets can be taken forward.

Outlook

I still remain optimistic that the business model created is appropriate for the current industry environment and will result in developing the commercial arrangements that will provide the Company with the framework with which it can regenerate. Nevertheless, further implementation of the business plan will require an injection of new capital into the business, but the value that additional capital is able to generate should significantly exceed the effect of any potential shareholder dilution.

Once arrangements on potential projects are definitive they will be reported to shareholders and the wider market in keeping with the Company's responsibilities.

Alan Minty

Executive Chairman

31 March 2016

Financials

The accounts for the period have been prepared in accordance with the International Financial Reporting Standards as adopted by the European Union using accounting policies that are consistent with those stated in the 2015 Annual Report and Accounts.

The Company reports a loss of £472,000 for the period, a decrease of £611,000 in the loss reported over the corresponding period in 2014. This is primarily due to the Company reducing its overheads as it resolves the financial and corporate structure required to implement its strategy.

The Company did not generate any revenue during the period (2014: £27,000).

Group net liabilities as at 31 December 2015 were £3,003,000 (2014: net assets of £1,385,000). The change in the Company's financial position is mainly attributable to an exceptional charge of £4,115,000 (including the effect of foreign exchange) for an impairment against the carrying value of the Group's Canadian assets. This was necessary due to the recent movement in the oil price and management's subsequent evaluation of the availability of capital to develop the assets.

During the period the Company raised £435,000 before expenses primarily to implement the Company's stranded and marginal field strategy and to facilitate the acquisition of projects.

Future funding and capital requirements

The Directors believe that NU-Oil has developed a very attractive business model in choosing to participate in the development of the marginal fields via the investment that is has made in Marginal Field Development Company (formerly ABT Oil and Gas Ltd). Upon conclusion of the necessary foundations, we expect to see an upturn in activity by utilising the offering to increase our project portfolio. As stated above, we will require an injection of new capital in order to implement our business plan however we believe that the value generation will outstrip the effect of any potential shareholder dilution.

Damian Minty

Chief Financial Officer

31 March 2016

CONSOLIDATED INCOME STATEMENT

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

CONSOLIDATED STATEMENT OF CASH FLOW

NOTE: These statements have been prepared under International Financial Reporting Standards as adopted by the European Union using accounting policies consistent with those in the last Annual Report.