OML 40 Operational Update

8 March 2013

ELAND OIL & GAS PLC

("Eland" or the "Company")

Operational Update

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 the following update on OML 40.

The planning for the rehabilitation and restart of existing production facilities on OML 40 and for the further field development drilling campaign to commence in 2013 is proceeding.

OML 40 is an asset with existing production facilities and significant low risk exploration potential

Since acquisition of the asset in September 2012 the focus has been on restoring production from the wells that were shut-in, in March 2006.

The work required to restore production from the two existing wells involves the laying of 3 km of replacement 4-inch flowlines, a 30 metre sectional repair of the export pipeline and recertification of the existing production flowstation facilities. Good initial progress has been made, however it would seem likely that completion of the necessary work will extend beyond the original Q1 target.

After production is restored, the development drilling programme, which includes two development wells in 2013 and a continuous drilling programme through 2014, will commence. Negotiations to secure a swamp-drilling rig to begin drilling operations in 2013 have been completed, and the rig has recently arrived in Nigeria after extensive refurbishment and upgrade in Asia.

A review of all production wells drilled to date by Shell, the previous operator, has been completed. The new wells will be both directional and horizontal. With this modern technology it is expected to achieve significantly higher well flow rates than the initial vertical wells which were drilled in the 1970's and the target reservoirs are all normally pressured and with a maximum depth of 10,000 feet.

Anticipated flow rates per new development well are 3,000 bopd on average while the existing production facilities have capacity for 30,000 bopd.

The recently reprocessed 3D seismic data set over the eastern part of the block including Gbetiokun has been interpreted resulting in the identification of multiple reservoir prospects across the lease. Significant near field potential exists near Gbetiokun and Abiala. At present a 3D reservoir model is built to best assess the multiple reservoir potential.

The reprocessing of the western data set including the Opuama field and the existing Polobo-1 discovery is nearing completion. Resolution is much improved. The Polobo-1 well was considered a dry well by Shell, however on further review by Eland of the data provided by Shell, this proved to be an oil discovery on the flank of a large 4-way dip-closure and consequently the potential for additional resources.

The Company will announce an updated OML 40 reserves report in the near future. The new information on the oil discovery and the increased prospectivity will be included in the contingent and prospective resources review of OML 40, which is currently ongoing and due later in 2013.

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

"Our strategy remains focused on developing OML 40 with its world class reserves and resources, and to continue in our efforts to build a portfolio of exploration and development assets in Nigeria and West Africa. This will deliver a growing production cash flow and we are very excited by what lies ahead."

Background

Eland was established with the intent to acquire and develop upstream assets in West Africa and with a principal focus on Nigeria.

On 31 August 2012, Elcrest Exploration and Production Nigeria Limited, a Joint Venture ("JV") Company in which Eland presently holds a 45% interest, acquired a 45% equity stake in OML 40, situated in the Niger delta for $154 million. NPDC holds the remaining 55% equity interest and is operator. Eland, its JV partner, and the NPDC, are proceeding with the development of this license.

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