UK Oil & Gas Regulatory News (UKOG)

For immediate release

24 July 2014

UK Oil & Gas Investments PLC

("UKOG" or the "Company")

UKOG to acquire Northern Petroleum's UK oil and gas assets in the Weald Basin

Summary

The Board of UKOG (AIM: UKOG) is pleased to announce that the Company has today conditionally agreed to acquire Northern Petroleum Plc's ("NOP") UK production and exploration oil and gas licence interests, for a total consideration of £1.5 million (the "Investment"). Further amounts up to a maximum of £50,000 may be payable in respect of net working capital of the Investment calculated as at today's date. All revenue as from today will accrue to UKOG.

NOP's UK oil and gas licence interests comprise: A 10% and 5% working interest in the producing Horndean and Avington Oilfields, respectively, in the Weald Basin, both of which are operated by IGas Energy Plc ("IGas"); a 50% interest in two further exploration licences in the Weald Basin; and a 65% interest in the offshore licence P1916 which flanks the western part of the Isle of Wight. In the year ended 31 December 2013, the Investment's average daily share of production amounted to approximately 20 barrels of oil and turnover and gross profit amounted to €591,000 and €345,000 respectively.

David Lenigas, the Company's Chairman, commented:

 "This is a significant new investment for UKOG, as we continue to grow our presence in the UK and provides UKOG with a direct interest in oil production. We look forward to working with IGas, the operator of the Horndean and Avington licences. These new assets complement UKOG's existing Weald Basin investments in the producing Lidsey and Brockham Oil Fields and the prospective Horse Hill-1 well."

Terms of the Investments

UKOG has today conditionally agreed to purchase from NOP the entire issued share capital of NOP's wholly-owned subsidiaries, Northern Petroleum (GB) Limited ("NPGBL"), NP Solent Limited ("NPSL") and NP Weald Limited ("NPWL"). NPGBL, NPSL and NPWL hold the following licence interests:

The acquisition agreements in respect of NPGBL, NPSL and NPWL (together, the "Licence Holders") are each inter-conditional on each other and on receipt of written confirmation from the Secretary of State for Energy and Climate Change ("Confirmation") on or before 31 October 2014 that he does not intend as a consequence of the acquisition by the Company of the respective Licence Holder to exercise his power to revoke the licences or require further change of control of Licence Holder under the terms of the licences.

In aggregate the base consideration payable by the Company to NOP amounts to £1.5 million to be funded from the Company's existing resources.

The base consideration in respect of NPGBL amounts to £1,311,999 comprising a cash deposit of £250,000, repayable only in the event that Confirmation is not forthcoming, together with a further payment on completion of the investment of £1,061,999 (the "Completion Payment") payable in cash, save that UKOG may elect to satisfy up to £500,000 through the issue to NOP of up to a maximum of 45,708,853 new UKOG ordinary shares ("Consideration Shares"), based on the average volume-weighted mid-market price of a UKOG ordinary share for the ten (10) business days prior today's date, equivalent to 1.09388p per Consideration Share. In the event that the Company elects to issue the Consideration Shares on completion an application will be made at that time for the Consideration Shares, which will rank pari passu with the existing UKOG ordinary shares, to be admitted to trading on AIM. In addition, the Company will pay a further amount in cash equal to the value of NPGBL's net current assets (being current assets less current liabilities) as at today's date, which is estimated to amount to approximately £30,000, up to a maximum of £50,000.

The base consideration payable by the Company for each of NPSL and NPWL, is £1 and £188,000 respectively.

Further AIM disclosures

NPGBL

NPGBL's UK oil and gas licence interests currently comprise a 5% working interest in each of the producing Horndean and Avington Oilfields in the Weald Basin, both of which are operated by IGas. Prior to completion, NOP will complete the transfer to NPGBL of its additional 5% working interest in Horndean, which NOP holds through another wholly-owned subsidiary. In addition, NPGBL has a 50% interest in a further exploration licence (PEDL 126) in the Weald Basin.

In the year ended 31 December 2013 NPGBL's unaudited turnover amounted to £281,000 (2012: £269,000). Gross profit and loss before tax for the same period amounted to £125,000 (2012:£119,000) and £7.815 million (2012:Profit of £38,000) after an impairment charge of £7.876 million in respect of the Sandhills and Bouldnor Copse wells drilled in 2005, past exploration licence costs and re-classification of Markwells Wood 2P reserves to 2C resources. Total assets and net liabilities amounted to £162,000 and £(199,000) as at 31 December 2013.

NPWL

NPWL's has a 50% interest in exploration licence (PEDL 233) in the Weald Basin. IGas is the Operator. To date there has been limited exploration activity.

In the year ended 31 December 2013 NPWL's unaudited turnover and loss before tax amounted to £nil (2012: £nil) and £843,412 (2012:£29,537) respectively after an impairment charge of £784,088 in respect of the Havant Prospect and re-classification of Baxter's Copse reserves to 2C resources. Total assets and net assets amounted to £279,978 and £137,385 as at 31 December 2013.

NPSL

NPSL has a 65% interest in the offshore licence P1916 which flanks the western part of the Isle of Wight. NPSL is the Operator. To date there has been limited exploration activity.

In the year ended 31 December 2013 NPSL's unaudited turnover and loss before tax amounted to £nil (2012: £nil) and £146,877 (2012:£1,690 profit) respectively after an impairment charge of £133,678. Total assets and net assets amounted to £26,238 and £23,753 as at 31 December 2013.

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