Partnership in Spain

For Immediate Release, 7 am 18 March 2014

LENI GAS AND OIL PLC

("LGO" or the "Company")

Partnership in Spain

LGO today announces that it has signed a heads of terms ("Term Sheet") with an Italian group, Pansoinco s.r.l. ("Pansoinco"), a Company with over 30 years operational experience in the energy sector and projects in ten countries worldwide. The intention of the parties is that Pansoinco will become a long term strategic partner for LGO's oil and gas assets in Northern Spain, including the producing Ayoluengo Field. 

The negotiated arrangements, which are the subject to contract and completion of final due diligence, contemplate an initial payment of US$2.8 million to LGO at Closing for the transfer of 65% of the shares in Leni Investments CPS Limited, the holding company of Compañía Petrolífera de Sedano, S.L.U.("CPS"), to Pansoinco and for Pansoinco to assume operatorship and all operating and development costs from closing until 31 January 2017, after which the partners will proceed on the basis of their respective 65% and 35% stake in CPS.

LGO have been in detailed discussions with Pansoinco for the last few months and the Term Sheet marks a milestone in a long term partnership that is anticipated to see substantial investment in to Ayoluengo and Hontomin beyond 2020. Exclusivity to complete the transaction has been granted until 30 April 2014. Closing is anticipated to occur on or soon after that date.

Neil Ritson, LGO Chief Executive, commented:

"A partnership with Pansoinco will bring the necessary experience and resources required to fully optimise the value of Spain for both parties. As a result of this agreement LGO's anticipated next 3 years' Spanish cash flow will immediately be brought forward and will allow the Company to put these funds to work increasing our Trinidad oil production."

For the year ended 31 December 2012, the Spanish asset's turnover was £2.76 million, with a profit before tax of £454,000. Although 100% of these assets were held in the Group's books at £8.36 million as at 31 December 2012, this transaction allows the Group to be fully carried for the development and expansion of its Spanish assets for the next 3 years.

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