Eland Oil & Gas Regulatory News (ELA)

27 February 2014

Eland Oil & Gas PLC

 ("Eland" or the "Company")

Extension of Loan Facility & Exercise of Options to raise £6m

Eland Oil & Gas PLC (AIM: ELA), an oil & gas development and exploration company operating in West Africa with an initial focus on Nigeria, is pleased to announce that it has extended its US$22 million loan facility with Standard Chartered Bank and has exercised a part of both the Solstice Option Agreement and the Helios Option Agreement, raising £6.0 million in total, at 100 pence per share.

Extension of Standard Chartered Loan Facility

The US$22 million loan facility (the "Facility") with Standard Chartered Bank, which Eland initially entered into on 24 August 2012 for an 18 month period, has been extended for a further 12 months to 24 February 2015. The Facility is available to the Company to allow Elcrest (the Joint Venture Company which holds a 45% interest in OML 40) to meet its general working capital requirements, including in relation to OML 40.

Interest is payable on amounts outstanding from time to time at a rate of 9 per cent. It is condition precedent to the availability of the facility that First Oil has been achieved. First Oil means the production of crude oil at an average rate of 2,000 bopd for a cumulative 30-day period in a 90-day period following the restart of production, being the date on which 2,000 bopd is first measured to have been achieved.

Exercise of Options

Eland has exercised a part of the options under the Solstice Option Agreement and the Helios Option Agreement, raising £6.0 million in total, at 100 pence per share. The proceeds of the exercised options will be used by the Company for general working capital and corporate purposes.

Pursuant to the Solstice Option Agreement, Solstice International Investments Inc. ("Solstice") is required to subscribe for 3,000,000 ordinary shares in the Company ("Ordinary Shares") at a subscription price of 100 pence per option as per the terms of the Solstice Option Agreement (together the "New Ordinary Shares"). The New Ordinary Shares will rank pari passu in all respects with the existing ordinary shares.

Pursuant to the Helios Option Agreement, Helios Natural Resources Limited ("Helios") is required to subscribe for 3,000,000 Non-Voting Right Ordinary Shares ("Non-Voting Shares") at a subscription price of 100 pence per option share as per the terms of Helios Option Agreement. The Non-Voting Shares rank pari passu in all respects with the existing Ordinary Shares save that they do not have the right to vote at any general meeting or annual general meeting of the Company. The Non-Voting Shares are convertible in to Ordinary Shares, on a one-for-one basis, subject to the restrictions contained in the articles of association. Under the articles of association Helios may not convert its holding of Non-Voting Shares into Ordinary Shares if doing so were to increase its holding in Ordinary Shares, when taken together with any of its affiliates or persons acting in concert, to equal or exceeding 30% of the current voting share capital in the Company.

It is expected that admission of the 3,000,000 New Ordinary Shares will take place on or about the 12 March 2014 with the issue of the Non-Voting Shares expected to take place on that same date.

Following the admission of the New Ordinary Shares and the issue of Non-Voting Shares on or about the 12 March 2014, the Company's issued share capital will consist of 138,263,214 Ordinary Shares and 3,000,000 Non-Voting Shares. Eland does not hold any Ordinary Shares in treasury.

The aforementioned figure of 138,263,214 ordinary shares may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, Eland under the Financial Conduct Authority's Disclosure and Transparency Rules.

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

"We are very pleased to secure both an extension to our existing loan facility and receive the further funding from two of our major shareholders.

The combination of the option proceeds and the ongoing availability of the debt facility ensure that the Company is well positioned to build on its recent successful restart of production on OML 40 and to develop the enormous potential of the licence."

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