Jersey Oil&gas Regulatory News (JOG)

Trap Oil Group plc

("Trapoil" or the "Company")

Acquisition of a 15 per cent. working interest in the Athena Oil Field

Trapoil (AIM: TRAP), the independent oil and gas exploration and appraisal company focused on the UK Continental Shelf ("UKCS") region of the North Sea, is pleased to announce that on 16 March 2012 it agreed to acquire a 15 per cent. working interest in the Athena Oil Field ("Athena") from Dyas UK Limited ("Dyas"), subject to Department of Energy and Climate Change ("DECC") and Dyas' partners' approvals, for a total cash consideration of approximately £34.5 million. Trapoil's management currently estimate the net acquisition cost to the Company to be approximately £26.9 million, as described below, payable in three stages.

Highlights:

·; Management estimate gross unaudited recoverable reserves from the core Athena development area to be c.14.3mmbbls, with upside in the core area and further to the north. The Company recognises that this unaudited management estimate is significantly lower than estimates published by third parties for this asset.

·; The effective acquisition cost for Trapoil is approximately US$21/bb (for fully developed producing reserves (based on the estimated effective acquisition cost of £26.9 million, the Company's 15 per cent. share of unaudited gross recoverable reserves as at 31 October 2012 of 2.0mmbbls), with a short anticipated payback. First production is currently anticipated in Q2 2012.

·; The acquisition will be transformational, cash generative and, together with tax synergies and anticipated hedging, will generate enhanced returns to Trapoil. First production from Athena is currently anticipated in early Q2 2012.

·; The acquisition yields good projected returns in excess of 50 per cent. when tax synergies and anticipated hedging activity are taken into account.

·; Trapoil management's anticipate an initial production rate of approximately 10,000bopd, rising to 18,000bopd (2,700bopd net to Trapoil) once fully commissioned.

·; Trapoil is not exposed to costs up to the current anticipated development cost. The Company's net abandonment liability is anticipated to be £5.5 million.

·; With completion of this acquisition, Trapoil will have achieved within one year its two principal IPO objectives of creating a dynamic exploration programme backed by cash flows from producing assets with high levels of tax synergy.

·; Trapoil is now well positioned for accelerated growth with results from its scheduled six well 2012 drilling programme (including three potentially high impact wells) currently anticipated during the remainder of the current year. Drilling of the first well, Orchid, has recently commenced.

Mark Groves Gidney, Chief Executive Officer of Trapoil, commented:

"Athena represents the game changing, cash generative production deal that we have been pursuing since our IPO. The Company is now well positioned to achieve its mission of becoming a significant, well rounded, independent, UKCS focused oil and gas business."

Description of the Athena Acquisition

The Company, on 16 March 2012, via its wholly owned subsidiary, Trap Oil Limited, agreed to acquire a 15 per cent. working interest in Athena from Dyas for a total staged consideration of approximately £34.5 million, with an effective date of 1 January 2012, subject to the requisite DECC and Dyas' partners' approvals.

A payment of £3 million was paid on signature of the SPA, with a further £21 million being payable on completion of the acquisition for an initial 10 per cent. interest, currently expected to occur mid 2012. The balance of £10.5 million is due by 31 October 2012 to acquire a further 5 per cent. interest. The effective balancing payment is currently estimated by Trapoil's management to be a lower figure, due to the receipt of Trapoil's anticipated share of post completion net cash flows from Athena to the end of October 2012 plus interest payable to Dyas, such that the estimated effective net acquisition cost is £26.9 million. Tax allowances of £12 million will also be transferred to the Company from Dyas, serving to reduce the overall effective acquisition cost. The total consideration payable will be satisfied from the Company's existing cash resources and projected income from Athena.

Athena is located in UKCS Block 14/18b (Licence P.1293). Ithaca Energy (UK) Limited ("Ithaca") is the operator and currently holds a 22.5 per cent. interest in the Block. Following completion of the acquisition, the remaining equity holders in Athena will comprise Dyas (retaining a 32.5 per cent. interest as the largest equity holder), EWE Energie AG (20 per cent.) and Lochard Energy Group plc's wholly owned subsidiary, Zeus Petroleum Limited (10 per cent.).

The field will be developed via four existing production wells and one water-injection well tied to a stand-alone FPSO, the BW Athena vessel, which has recently undergone a comprehensive refitand recertification in Dubai. The vessel is expected to arrive at the Athena location this month and, since the majority of the subsea elements for the field have already been installed, all of the production wells are now ready for hook up.

Paul Collins, Chief Operating Officer of the Company, has reviewed and approved the technical information contained within this announcement in his capacity as a qualified person, as required under the AIM Rules. Mr Collins holds a BSc (Hons) degree in Fuel & Energy Engineering from Leeds University and a post-graduate diploma in Offshore Mechanical Engineering from Robert Gordon's Institute of Technology and has over 28 years' experience in the oil and gas industry.

Enquiries:

**ENDS**

Notes to editors:

·; The Trapoil group was created in 2008 by a team of experienced industry executives with a broad range of oil and gas technical, operational and financial expertise and professional skills.

·; Trapoil has developed long term relationships with key oil industry partners, notably Suncor Energy Incorporated, Norwegian Energy Company ASA and Challenger Minerals (North Sea) Limited, and major suppliers and consultants including CGGVeritas Services (UK) Limited ("CGGVeritas"), Applied Drilling Technology International and Exploration Geosciences Limited.

·; The Company utilises a research-led, knowledge-based approach to identify and deliver promising exploration and appraisal opportunities, and to this end has secured extensive long term access to CGGVeritas' state of the art 3D seismic database over the majority of the Central North Sea area on negotiated terms. CGGVeritas is a leading pure-play geophysical services and equipment provider. Access to such 3D seismic data serves to strengthen the group's ability to create opportunities on both open and held acreage in the UKCS.

Glossary of key technical terms: