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ENEGI OIL PLC

AIM ticker: 'ENEG'

OTC ticker: 'EOLPF'

8 December 2014

Enegi Oil Plc

("Enegi" or "the Company")

Update on Western Newfoundland Activities

Enegi today provides the following update on its Western Newfoundland activities.

Key Points:

· Enegi has mutually agreed with BSE to terminate the Farm-In. This will enable the Company to implement plans that will have faster results and are more appropriate for a regional development play such as western Newfoundland;

· Enegi believes that an incremental work programme, where the Company aims to be carried, provides the most appropriate route to further prove and develop the area and, in line with its stated strategy of focusing on marginal field development, to partially divest its interest in Newfoundland given the challenges of working in this remote location. The major benefit is that no capital will need to be raised by Enegi;

· The incremental investment plan centres on an Early Field Development ("EFD") that invites E&P companies and oilfield service companies to share a portion of phased development costs and risk in exchange for information, license equity and guaranteed services ;

· Enegi is in discussions with number of parties and possible partners to fund and deliver the EFD plan;

· Updated subsurface evaluation indicates the Garden Hill Field Trend could contain 406mmbbl STOIIP with 85mmbbl recoverable in the P50 case.

· The Company believes that the EFD plan, once executed, will accelerate not only the development of its own licences with no additional capital outlay, but western Newfoundland generally, to create the infrastructure and activity proportionate to the oil and gas potential.

Alan Minty, CEO and Chairman of Enegi Oil commented:

"Whilst disappointed that it has not been possible to complete the objectives of the farm out with BSE we recognise the problems of concluding investment for large scale plans in the current climate. We have known for a long time that more careful management of investment risks, expectations, delivery timeframes and costs are required in the current economic environment in the oil and gas sector. Most importantly, though, our plans are based on utilising information and existing licences to attract future staged investment to achieve realistic and relatively short-term goals. The plan, which we refer to as Early Field Development Plan, is based on similar principles as underpin the marginal field initiative, which is to assess the value of prior investment not just as a sunken cost, but as a means to develop confidence in future outcomes. It is the continuing subsurface assessments that create and re-affirm our confidence in the region. We look forward to providing further updates as we progress the EFD plan."

Mutual Termination of Farm-In

As announced on 24 July 2013, the Company entered into a definitive Farm-In Agreement ("the Farm-In") with Black Spruce Exploration ("BSE") in relation to its Newfoundland assets, PL2002-01(A), EL1116 and EL1070 (together "the Assets"). Enegi confirms that, on 4 December 2014, it mutually agreed with BSE to terminate the Farm-In.

Throughout the period of the Farm-In, the Company has continued to invest in subsurface evaluation of the Assets and, as stated in its news release dated 29 August 2014, received a conditional offer to partially divest itself of its interests in the Assets. Having considered the terms of the offer, the Company does not believe it to be in the best interests of shareholders presently and that the Early Field Development ("EDF") plan outlined below provides the most appropriate route to further prove and develop the area in a manner consistent with its stated strategy to focus on marginal field development through the full or partial divestment of its other assets, as appropriate. Further details of the subsurface evaluation are provided in subsequent sections.

The Company believes it is best positioned to implement appropriate plans to develop the opportunity presented by the Assets, having regard to its expertise of developing solutions for marginal assets and its operational experience of running drilling campaigns in western Newfoundland.

Delivering an "Early Field Development" Plan

Western Newfoundland contains a wide range and variety of plays and prospects, but suffers from a lack of significant activity owing to its remote location and relative lack of infrastructure and services. This has stunted its potential for growth and has created an unnecessarily challenging environment in which to operate.

To address this, Enegi has formulated an Early Field Development ("EFD") plan after discussions with a number of parties and possible partners. The EFD plan is based upon principles incorporated in the Company's marginal field initiative, where existing data is re‑assessed to determine both its current value and the investment necessary to advance a project to another phase. This incremental investment reduces the huge uncertainty that permeates exploration projects, which creates delays in activity and in approval of decisions and which contributes hugely to the cost escalation which is such a feature of the oil and gas sector. The simple principle that underpins the EFD concept is to utilise the licence and existing knowledge to create the value on which further investment is sought. The incremental investment is determined by the success, or otherwise, of the preceding phase and is targeted at improving the underlying knowledge base and value rather than being focused on a long term objective where the risks cannot be accurately calculated at the outset. Consequently, each phase of investment is carefully formulated to understand the risks associated with the funds being directly applied to that project phase.

The directors believe that the benefit for Enegi through the EFD plan is significant as, through the sale of data and equity in existing licences, the Company can effectively deliver an incremental and faster farm-in model, which it believes will carry the Company for future investment and reduce the risks to the farmee. The Company expects both oilfield service companies and E&P companies to participate in the EFD plan, which will initially focus on delineating and developing the discovered "Garden Hill Field Trend" before expanding operations to look at wider prospects. Activity generated by implementing the EFD plan is expected to act as a catalyst for increased oil and gas activity in Western Newfoundland. Subscribers to the EFD plan will each be invited to share a portion of phased development costs and risk in exchange for information, equity, guaranteed services and other returns.

The most recent internal subsurface model revision estimates that 406mmbbl STOIIP may be contained within the field trend, of which 85mmbbl could be recoverable in the P50 case. The table below shows the portion contained in acreage currently held by Enegi.

EFD Plan Implementation and Work Programme

Taking into account, and with reference to, the subsurface evaluation outlined in this announcement, the EFD plan envisages a work programme comprising four distinct value accretive phases:

· Phase 1: Drill a production well from the existing Garden Hill Site ("GHS") targeting the reservoir in a down-dip location from the existing PaP#1-ST#3 well (the "Well"), into a central position within the mapped field trend, which is linked with enhanced productivity in analogous field trends. The well will gather new reservoir data, which can be used to de-risk and prove up a significant volume of reserves and contingent resources.

· Phase 2: Drill a production well up-dip from the Well, targeting the reservoir within established proximity of the thrust, whilst deviating along the length of the field trend. The well will aim to establish lateral connectivity and communication within the reservoir (between wells), demonstrating continuation of the field trend.

· Phase 3: Acquire new seismic data to allow high-resolution enhanced mapping of the Garden Hill Field Trend and other prospective trends identified in the surrounding area.

· Phase 4: Based on the captured data and revised models, a multi-well drilling campaign will be designed to boost sustainable production from the field, thereby maximizing oil recovery and unlocking the potential of surrounding prospects and trends.

Western Newfoundland Subsurface Evaluation

The west coast of Newfoundland is on the margin of the Anticosti Basin and the Company believes it to be one of the remaining frontier areas containing significant hydrocarbon potential. Enegi, through its involvement in the region for the past eight years, has identified a number of significant exploration plays and prospects, both conventional and unconventional, alongside the discovered "Garden Hill Field Trend" that extends on-to-off shore, using the results gathered from its own investment and utilising data from previous operators.

Employing modern techniques and incorporating production data from the Well, Enegi has developed a revised model that not only accounts for previous results, but also indicates a large discovered trend that has considerable surrounding upside - the Garden Hill Field Trend. To reach this stage, the Company has integrated and interpreted approximately 2,500 line km of 2D seismic data around and over the Port au Port Peninsula, and has completed a refined structural depth model that extends across PL2002‑01(A), into EL1116 to the southwest, and also into the disputed acreage to the northeast (formerly held by Enegi under PL2002-01 and subject to judicial review following the DNR's decision in 2012 to limit the extent of the renewal).

The analysis suggests that the reservoir around the Well is continually recharged due to its location on the margin of the Garden Hill Field Trend, where greater productivity wells can be placed in future. This is consistent with field trends such as Albion-Scipio and Lima-Indiana, which share similarly aged and altered reservoirs and lie along the Appalachian structural front, in the United States. Combined, these two proliferous field trends have recovered over 600mmbbls.

As well as defining the presence and extent of the Garden Hill Field Trend, a number of similar prospective trends have been identified along parallel and adjacent structural features. This too is consistent with what was experienced by the analogous Albion-Scipio Field Trend, following more recent activity. Such observations, once established, have the potential to build significantly upon the upside around the Port au Port region, and similarly along the west coast of Newfoundland where this play concept is present.

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Qualified Persons

The information in this release has been reviewed by Barath Rajgopaul MSc (Mech. Eng.) C. Eng, a member of the Advisory Panel of Enegi. Mr. Rajgopaul has over 30 years' experience in the petroleum industry.

Notes to Editors

Enegi Oil Plc is an independent oil and gas company whose strategy is to build a diverse portfolio of assets with a strong emphasis on acquiring interests in marginal fields. These marginal fields are low risk highly-appraised projects and consequently the Company's entry cost will be low. Enegi will look to develop these assets utilising ABTechnology's buoyant solutions, which are appropriate and change the development economics of a project. This is also expected to enable the early booking of reserves. The Company's current portfolio is made up of operations focused on opportunities around the Port au Port Peninsula in Newfoundland, Canada, the UK North Sea and Jordan. The Port au Port Peninsula is located in western Newfoundland, which, although lightly explored, is in an active petroleum system with light oil having been discovered on a number of occasions. The Company's licences in the UK North Sea have discovered hydrocarbons on them and have been selected based on buoy technology operating criteria. The Company has also entered into the highly prospective Dead Sea and Wadi Araba Block in Jordan with its partner Korea Global Energy Corporation.