CERP.L Regulatory News (CERP)

For Immediate Release

6 January 2015

LGO Energy plc

("LGO" or the "Company" or "Group")

Group Production and Goudron Field Update

LGO today provides an update in the Group's production and development activities in the Goudron Field in eastern Trinidad.

Since the Company's announcement on the 15 December 2014 well GY-670 has continued to produce at a consistently high rate and at a high well-head flowing pressure. The well has averaged 1,045 barrels oil per day ("bopd") of 37 degree API oil since being placed on production on a highly restricted basis at an average wellhead flowing pressure of 1,225 psi. The well is on a restricted flow rate using a 10/32-inch choke to ensure that its long term production potential is optimized; the well has a calculated open-hole flow rate in excess of 6,000 bopd.

The LGO Group 10-day average production rate has exceeded 2,000 bopd, since the 23 December 2014. Average Group production for the month of December 2014 was 1,685 bopd.

Well GY-671, the Company's seventh newly drilled well, was perforated over a 171-foot interval of oil bearing C-sands on 17 December 2014 and has flowed at restricted rates up to 216 bopd and well-head flowing pressures of up to 900 psi with a 12/32-inch choke. The well has intermittently produced quantities of gas and has also produced up to 0.3-percent of sand. In view of the short length of the sump between the lowest perforations and the current total depth of the well, and the risk of the well sanding up, it has been decided to retrieve the tubing-conveyed guns used to complete the well and to recomplete the well with a conventional production string. That work is ongoing and is expected to be completed in the next few days.

Well GY-669, the eighth and last well drilled at Goudron in 2014, is currently being prepared for completion in the C-sands and is expected to be on production over the next week. A skid mounted gas separation plant has been mobilised to the field, and has been successfully tested. This will be connected to GY-669, which has log characteristics indicating a higher gas-oil-ratio oil, in order to provide more accurate well test rates and production monitoring data.

Applications for the clearing of the next two drill sites, Pad-4 and Pad-5, have been formally lodged with the Trinidadian authorities and site preparation work is expected to commence shortly. Once Pad-4 is ready to receive a drilling rig, Well Services Rig-70, which is under contract to LGO for this work, will be mobilised to the field.

The rate of oil sales has been substantially increased with the active cooperation of the Petroleum Company of Trinidad and Tobago ("Petrotrin") and there are no anticipated bottlenecks in oil sales throughout 2015 as we increase production with the addition of new wells. An order for a lease area custody transfer meter ("LACT meter") has been placed with the local Trinidadian agent of a vendor in the USA and is expected to be delivered and installed in March 2015. The LACT meter will allow oil to be sold on a continuous basis thereby reducing the need for manual measurement and additional storage capacity.

Neil Ritson, LGO Chief Executive, commented:

"The 2014 work program, and especially the GY-670 well, has been truly transformational for LGO with a 5-fold increase in sustainable daily Group production. As we move into the 2015 drilling program we have high hopes of continuing the success we have seen in the past year. The low cost of our operations ensures they are sustainable at low oil prices and we have no plans to decrease the extent of our work program at Goudron.

We have received excellent cooperation and support from both Petrotrin and the Ministry of Energy and Energy Affairs in the last two years. The recent success of GY-670, which the Ministry have cited as the most significant new onshore production well for two-decades, is a demonstration of how our investment and their support is paying dividends."

Competent 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 35 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.

Enquiries:

Glossary:

API: American Petroleum Institute

C-sand: Sandstone reservoirs below the pre-Mayaro unconformity and above the pre-Lower Cruse unconformity encompassing sandstones of equivalent age to both the Gros Morne and the Lower Cruse formations.

calculated

open-hole flow

rate: A mathematically derived theoretical maximum flow rate that a well could deliver with zero back-pressure at the middle of the perforated interval

psi: pounds per square inch