Operational Update

For Immediate Release, embargoed until 7 am

24 January 2017

LGO ENERGY PLC

("LGO" or the "Company")

Group Operational Update

and Quarterly Production

LGO today provides an operational update including plans for production drilling and enhanced oil recovery at the Goudron Field in Trinidad, its Trinidad South West Peninsula interests and Group production for the fourth quarter 2016.

Neil Ritson, LGO's Chairman and Chief Executive, commented:

"Regaining momentum in our Trinidad production and business development activities is a key objective for the Company in early 2017. Recommencing development drilling at Goudron, progressing the Goudron waterflood for which we hold over 60 million barrels of independently certified contingent resources and continuing with the high value South West Peninsula exploration programme are all key to building shareholder value from the excellent underlying assets in the Company."

Goudron Drilling

The Company's local operating subsidiary, Goudron E&P Limited ("GEPL"), has now received approval from the Petroleum Company of Trinidad and Tobago ("Petrotrin") and the Ministry of Energy and Energy Industries ("MEEI") for the first two of its planned Mayaro Sandstone infill wells, currently designated H18E G11(5) and H18E N4. These wells will be given definitive well numbers in the "GY" sequence when the wells have spudded.

All relevant rig and services contracts have been agreed and mobilisation of equipment and crews for the site preparation work will commence as soon as Petrotrin receives approval from the forestry authorities for the cutting of trees necessary to clear the drilling sites. GEPL is looking at ways to expedite this approval process for the current and future wells, and will provide a further update once final approval has been granted.

In order to ensure smooth progress with future planned Mayaro wells in 2017, GEPL is in the process of submitting applications for a further eight well locations for Petrotrin and MEEI approvals. The pace of drilling of these additional wells depends on the availability of funds. The initial two well programme is being funded from existing cash in GEPL.

Goudron Enhanced Oil Recovery ("EOR")

Work in preparation for the planned low cost initial waterflood at Goudron continues to advance with approvals expected to be sought in February 2017 for the initial phase of water flooding. This phase will use available produced water in the field and deploy two existing C-sand wells for injection and four existing C-sand wells for production. Once the initial scope of work is agreed with Petrotrin and the MEEI, a Certificate of Environmental Compliance ("CEC") will be requested from the Trinidadian Environmental Management Authority (EMA). Minimal new infrastructure is needed for the initial phase and therefore not only is limited capex required, but the implementation of the project could be undertaken shortly after all necessary approvals have been granted.

South West Peninsula, Trinidad

LGO and its local subsidiary, Leni Trinidad Limited ("LTL"), have reached agreement with Beach Oil Field Limited ("BOLT") on the terms of a final sale and purchase agreement ("SPA") for BOLT's interests in the South West Peninsula ("SWP"). The agreement will see LTL acquire the remaining 75% of the shareholding in BOLT for a final one-off payment of US$50,000 and will supersede the previously announced Deep Rights Agreement signed in 2013 on which a residual payment of US$1.4 million would have been due.

Through this transaction LTL's shareholding in BOLT will increase from 25% to 100%, and LTL will gain rights to all shallow and deep leases held by BOLT. Completion of the ownership of the leases requires the completion of an existing agreement between BOLT and Petrotrin through the payment of US$89,000, and various minor payments to leaseholders and third-parties likely to total approximately US$45,000. BOLT currently has a loan with a Caribbean bank for approximately US$1.1 million and as part of the transaction this will refinanced in the local market or repaid as appropriate.

LTL will take over operatorship of the Bonasse Oilfield with the intent of commencing a well reactivation programme later in 2017. Bonasse production was temporarily shut in in mid-2016 in the face of low oil prices, however, with LTL taking over operatorship, the improvement in oil prices and the improvements to the Trinidad tax regime anticipated for fiscal year 2017-18 LTL believes that some of the existing 16 wells at Bonasse could be profitably rejuvenated at minimal capital expense.

The SWP, where LTL already has production from the shallow Icacos Oilfield, is significant since it is largely unexplored with regard to deep potential and in close proximity to the prolific East Venezuelan Basin of which the SWP is geologically a part. The only deep onshore well, FRM-1, drilled in 2008 to a depth of 12,301 feet, found oil shows in the Lower Cruse and Lengua Formations at around 11,700 feet. The regionally significant Herrera Sandstone formation was not reached in the FRM-1 well. The en-echelon structures offshore at Soldado have yielded major oil fields, in excess of 200 million barrels, and it is LGO's view that similar structures may lie onshore beneath the SWP.

The SWP was one of LGO's principal targets in acquiring the Full Tensor Gravity ("FTG") gradiometry survey acquired by ARKeX Limited earlier in 2015. The final FTG data was transferred to LGO in early June 2015 and has been interpreted alongside a soil geochemistry survey acquired jointly with BOLT, and the existing well and seismic data which includes a 3D seismic survey over a large portion of the peninsula. The integrated interpretation work has shown the presence of a significant number of undrilled oil and gas leads and prospects within the SWP which will be further studied prior to a decision to drill.

The Bonasse Oilfield discovered in 1911 by the Greig-1 well lies some 10 kilometres from Icacos and has been producing from up to 16 wells at depths up to 1,200 feet. Production was restarted in 1997, but has been temporarily suspended since mid-2016. Oil production comes from sandstones of the Cruse Formation and the oil quality averages 23 degree API gravity. BOLT and LTL are in agreement that significantly greater potential exists for additional production through the application of proven technologies. Additional shallow drilling targets are also available within the field boundaries.

LGO, through its interests in Icacos, its wholly owned Cedros leases and the BOLT leases has close to 11,000 gross acres under lease in the SWP within which to explore, as well as the existing producing assets that can support enhanced production activities, such as well recompletions and the drilling of new production wells.

The SPA is anticipated to close prior to the termination of the present exclusivity arrangements on 31 March 2017.

Group Production

The Group's fourth quarter 2016 production was an average of 540 barrels of oil per day ("bopd"), with production from Trinidad averaging 459 bopd.

Fourth quarter production was impacted by the decision to commence temporary suspension of production activities at the Ayoluengo Field in Spain pending agreement on a new concessions at the end of January 2017. As announced on 13 January the decision to temporarily suspend production in Spain has minimal impact on Group operating finances.

LGO Group production for full year 2016 averaged 548 bopd.

Qualified Person's Statement:

The information contained in this announcement has been reviewed and approved by Neil Ritson, Chief Executive Officer and Director for LGO Energy plc, who has over 39 years of relevant experience in the oil industry. Mr. Ritson is a member of the Society of Petroleum Engineers (SPE), an Active Member of the American Association of Petroleum Geologists (AAPG) and is a Fellow of the Geological Society of London (BGS).

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