Spain Enhanced Oil Recovery Agreement with Praxair

LENI GAS & OIL PLC

("LGO" or "The Company")

1 October, 2010

Spain Enhanced Oil Recovery Agreement with Praxair

Leni Gas & Oil plc (LGO), the AIM listed international Oil and Gas Production, Development and Exploration Company, today announces that the Company with its wholly owned Spain subsidiary has entered into a Heads of Agreement with Praxair España, S.L. ("Praxair ES"), a Spanish subsidiary of Praxair, Inc. (NYSE: PX) for a nitrogen enhanced oil recovery ("EOR") pilot project in Spain.

Highlights

·; Heads of Agreement signed with Praxair ES for a nitrogen injection enhanced oil recovery pilot project in the west flank of the Ayoluengo upper Jurassic reservoirs in Spain

·; Period of exclusivity to negotiate and complete a definitive agreement, including an execution plan for the requirements of both companies to the project

·; Nitrogen injection enhanced oil recovery methods can substantially increase overall recoverable reserves by 33%

·; Ayoluengo upper Jurassic west flank reservoirs have OIIP of 27.31 mmbo with only 1.4 mmbo produced historically and currently not producing

·; Construction of facilities expected to start at the end of 2010 and injection planned to commence at end Q1 2011 with EOR performance evaluated during 2011

Nitrogen Injection Enhanced Oil Recovery

LGO has identified from the recently completed geotechnical review of its Spain acreage that complementary artificial stimulation methods to mobilise the oil within the various producing Ayoluengo Upper Jurassic reservoirs should be used to maximise total recoverable reserves.

Nitrogen enhanced oil recovery projects have the dual advantage of minimum environmental impact and maximum reservoir mobilisation efficiency. Liquefied nitrogen is easier to produce and transport than carbon dioxide and does not incur large drainage of water aquifers for reservoir pressurisation or flood projects. Nitrogen, being inert, does not have a corrosive effect on well integrity and can be used for both reservoir repressurisation and to support water or polymer flood projects.

The Heads of Agreement with Praxair sets out the proposed terms of a Definitive Agreement and Project Execution Plan between the companies for Praxair to provide nitrogen and equipment for the pilot EOR project, and LGO to conduct the design and operation of the injection facilities into the west flank of the Ayoluengo upper Jurassic sands. The west flank currently has no existing production with OIIP of 27.31 mmbo and a low historical recovery factor below 5%.

The existing Ayoluengo production is from the east flank upper Jurassic reservoirs with OIIP of 79.39 mmbo and historical recovery of 21%. The Company is currently undertaking complementary exploitation projects to increase the productivity and drainage radius of all wells in the east flank.

Typically nitrogen EOR projects can increase overall reservoir recovery by 33% depending on the method of injection and reservoir characteristics.

Agreement Terms

The Heads of Agreement outlines the anticipated terms of a Definitive Agreement that the parties will seek to complete within a defined exclusivity period. If the Definitive Agreement is not completed within the exclusivity period, neither party would have any liability or on-going obligation to the other with respect to the proposed project.

The proposed Definitive Agreement would extend for a minimum duration of nine months while the viability of nitrogen EOR in the west Ayoluengo upper Jurassic reservoirs is evaluated. The cooperation of the parties could be expanded to the other reservoirs in Ayoluengo (both east upper Jurassic and lower Jurassic) upon the successful completion of the pilot. The Definitive Agreement would also include the option for Praxair to participate on all other assets within the Company's petroleum production and exploration acreage in northern Spain which covers an area of over 550 sqkm.

Under the proposed terms for the Definitive Agreement, LGO would manage the project supported by Praxair and the Company's key engineering service providers. The Company shall be responsible for the reservoir engineering, preparing the injection and production wells, operation and monitoring of the pilot and evaluation of the overall performance of the pilot. Praxair would be responsible for supporting the design activities, the supply of nitrogen, the provision of nitrogen storage tanks and the equipment for delivery of nitrogen.

Engineering design and permitting of the project by the Company has started with facilities construction planned to commence at end 2010 with and nitrogen injection at end Q1 2011. LGO's expenditures for the project shall be funded from internally generated cash flow from Spain. All production earnings from the project are to LGO's account.

About Praxair

Praxair España, S.L. is a subsidiary of Praxair, Inc., a global, Fortune 300 company listed on the NYSE. Praxair, Inc. and its affiliates supply atmospheric, process and specialty gases, high-performance coatings, and related services and technologies to a wide diversity of customers.

The Praxair group's primary products are atmospheric gases (oxygen, nitrogen, argon and rare gases which are produced when air is purified, compressed, cooled, distilled and condensed), and process & specialty gases (carbon dioxide, helium, hydrogen, semiconductor process gases, and acetylene which are produced as by-products of chemical production or recovered from natural gas).

Praxair, Inc. and its affiliates have participated in 16 pilot nitrogen EOR projects worldwide.

David Lenigas, Executive Chairman, commented:

"We are extremely pleased to have signed a heads of agreement with Praxair that may lead to a definitive agreement for the Company's enhanced oil recovery project within our Spain operations."

"Praxair are an international leading industrial gases company with significant experience of providing nitrogen and carbon dioxide for enhanced oil recovery projects worldwide. This Heads of Agreement is continuing evidence of LGO's progress with expanding our Spain operations to recover the substantial identified resources."

 "The potential scope of this agreement provides LGO with access to considerable skills and resources to obtain the nitrogen needed to maximise the recovery potential of our existing producing reserves and optimise recovery for all of the Company's development projects in Spain."

Competent Person's Statement:

The information contained in this announcement has been reviewed and approved by Fraser S Pritchard, Executive Director for Leni Gas & Oil Plc (member of the SPE) who has over 20 years relevant experience in the oil industry.

Enquiries:

Leni Gas & Oil plc

David Lenigas, Executive Chairman

Fraser Pritchard, Executive Director

Tel +44 (0) 20 7016 5103

Beaumont Cornish Limited

Roland Cornish / Rosalind Hill Abrahams

Tel +44 (0) 20 7628 3396

Mirabaud Securities Limited

Rory Scott

Tel +44 (0) 20 7878 3360

Pelham Bell Pottinger

Mark Antelme / Henry Lerwill

Tel + 44 (0)20 7861 3232

NOTES TO EDITORS

Leni Gas & Oil Plc is an international oil and gas exploration, development and production company headquartered in London, trading on the London Stock Exchange's AIM index. LGO's strategy is to acquire projects and businesses within the oil and gas sector that contain a development premium which can be unlocked through a combination of financial, commercial, and technical expertise.

LGO operates a low risk portfolio of production expansion assets in the US Gulf of Mexico, Spain, Trinidad and Malta with significant play upside using similar strategies to leverage technologies and proven production enhancement techniques. LGO specifically targets near term production with upside exploitation potential and manages its portfolio to ensure all assets have accelerated incremental reserves and production enhancement programs.

GLOSSARY

mmbo = million barrels of oil

EOR = enhanced oil recovery

N2 = nitrogen

sqkm = square kilometre

OIIP = oil originally in place