Jersey Oil&gas Regulatory News (JOG)

19 April 2011

Trap Oil Group plc

 ("Trapoil" or the "Company")

Company Update

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 it has recently entered into, subject to Department of Energy and Climate Change ("DECC") approval, a farm-in agreement with respect to Summit Petroleum Limited's ("Summit") Orchid exploration block 29/1c. In addition, the Company has also exercised, subject to DECC approval, options to increase its overall equity position in two of the assets held within its existing exploration portfolio.

Farm-in to Summit's Orchid exploration Block 29/1c

Trapoil has agreed to farm-in for a 10 per cent. working interest in Summit's Orchid exploration licence p1556 in Block 29/1c in the Central North Sea, in which an initial exploration well is currently scheduled to be drilled in Q3 2011 . The Orchid prospect is a four-way dip closure in the Tertiary and Chalk horizons with an attractive reserve/risk ratio and is located close to the producing Banff, Kyle, Bittern and Gannet group of fields. The current joint venture partners in licence P1556 are Summit as operator and Reach Exploration Limited, and Valiant Petroleum and Atlantic Petroleum have also recently announced they have reached agreement to participate in the Orchid exploration block 29/1c. Summit is the London based, wholly owned subsidiary of Sumitomo Corporation and Trapoil is delighted to be joining Summit as a partner.

Exercise of Options

The Company has exercised, subject to DECC approval its option to acquire a working interest in the 26th round licence award P1768 in respect of the three part Blocks 14/14b (Brule), 14/18c (Bordeaux), and 14/19c covering an area of approximately 260km2 at the north-west extremity of the Witch Ground Graben, a major oil bearing province in the northern North Sea. The blocks lie immediately north-west of the Claymore and Scapa fields in water depths of approximately 400ft. There are two existing historical discoveries within the licence area, namely the 14/14-1 well (Brule) and the 14/18-1 well (Bordeaux) drilled in 1977 and 1978 respectively. The option was granted by the operator and joint venture partner, Norwegian Energy Company UK Limited ("Norwegian Energy Company UK"), a subsidiary of Norwegian Energy Company ASA ("Noreco"). Accordingly, Trapoil has now increased its overall equity position from a 10 per cent. carried interest to a 6 per cent. carried and an additional 40 per cent. working interest. New 3D seismic is currently expected to be shot over blocks 14/14b and 14/18c by the appointed contractor, Petroleum Geo-Services, commencing in May 2011.

In addition, Trapoil has exercised, subject to DECC approval, a further option over the 25th round licence P1650 in respect of the Crazy Horse prospect (Block 14/13) covering an area of approximately 216km2 at the north-west extremity of the Witch Ground Graben immediately adjacent to the abovementioned blocks. The option was granted by the operator and joint venture partner, Norwegian Energy Company UK, and the consortium has recently committed to drilling an exploration well to test the Scapa and Captain sands which is anticipated to be spuded in 2012. Trapoil has increased its overall equity position from a 5 per cent. carried interest, to a 5 per cent. carried and an additional 17 per cent. working interest.

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

"We are delighted to have secured these three value enhancing opportunities and to have delivered on some of our IPO objectives so quickly. We continue to actively work on several other potential transactions involving both production and drilling, and are confident that we will be able to report further progress to our shareholders in the near future.

There has been much comment in the press regarding the UK Government's recent budget tax changes relating to the increase in the supplementary charge from 20 to 32 per cent. Whilst this may depress the value of the Company's existing asset, from our perspective the changes should be beneficial to Trapoil as we are now likely to be able to spend less money on acquiring producing assets to secure cash flow and tax synergies, and can focus on utilising the proceeds raised from our IPO in March for the numerous high impact drilling opportunities available to us. We believe that such opportunities will deliver attractive long term returns to our shareholders."

Dr Peter Smith, Technical Director, has reviewed and approved the technical information contained within this announcement in his capacity as a qualified person, as required under the AIM rules. Dr Smith is a Chartered Geologist and has been a Member of the Petroleum Exploration Society of Great Britain for more than 35 years and a Member of the European Association of Exploration Geoscientists for more than 35 years.

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, Noreco 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.

·; "Carried interest" refers to an agreement between two or more working interests whereby one party (carried party) does not share in lease revenue until a certain amount of money has been recovered by the other party (carrying party). The carrying party pays costs applicable to the carried party's interests in the property and is reimbursed out of the revenue applicable to the carried party's interest.

About Summit Petroleum Limited

Summit Petroleum Limited is a London based, wholly owned subsidiary of Sumitomo Corporation. The company is focused on exploring, developing and producing oil and gas assets in the UK North Sea and has current net production of approximately 7,000 barrels of oil equivalent from 8 fields.

Sumitomo Corporation is a Japan based integrated trading company engaged in a range of business activities worldwide which generated a gross profit of £5.6bn for its financial year ended 31 March 2010. The company's principal business operations include the trading of metal products, media and life style, transportation and construction equipment, infrastructure, chemical and electronics, resources and energy, consumer industry and real estate, as well as financial and logistics. Its shares are traded on the Tokyo Stock Exchange and it has a current market capitalisation of approximately ¥1,440.7bn (approximately £10.5bn).

About Noreco

Noreco is a rapidly growing, publicly-owned, independent E&P company focused on the exploration for, development and production of, oil and gas in NorthWest Europe with operations in Norway, Denmark and the UK. Noreco's portfolio includes 34 exploration licences, 12 discoveries, as well as 7 active production fields and a further production field under development. It anticipates achieving its first UK production by the end of 2011. Its shares are traded on the Oslo Stock Exchange and it has a current market capitalisation of approximately NOK3.8 billion (approximately £423.7 million).