Eland Oil & Gas PLC announced update on activities for the OML 40 Licence, located in on shore Nigeria (OML 40). OML 40 was originally licensed by Shell in 1964 and production commenced in 1975 at an initial rate of circa 12,000 bopd and produced continuously until the production facility was shut-in in March 2006. Elcrest Exploration and Production Nigeria Limited ("Elcrest"), a Joint Venture Company established by Eland in partnership with indigenous Nigerian company Starcrest Nigeria Energy Limited ("Starcrest"), in which Eland presently holds a 45% interest, acquired a 45% equity stake in OML 40 on August 31 2012.

Elcrest, supported by Eland, Starcrest and together with the State Oil Company, NPDC (together the "Partners"), are planning on the full development of OML 40 after restoring production through the existing production facilities and to export the oil via the Shell operated export terminal at Forcados. The immediate objective is to re-commission OML 40 production facilities with a target gross production of 2,500 bopd before the end of the 1st quarter 2013, and then to increase production through further development, appraisal and exploration to reach a target gross production of 50,000 bopd within four years. The Partners have approved the budget and work programme for 2013 totaling $126 million which anticipates the restart of production by the end of the 1st quarter 2013 and the commencement of development drilling of new production wells at the start of the 3rd quarter 2013.

The Company is fully funded through expected cash flow, current cash reserves and the debt facility from the Standard Chartered Bank. Interpretation of the data set acquired from Shell has been underway since completion of the acquisition of OML 40, and an updated CPR will be issued and published by end February 2013. To date, the interpretation of the data set, which includes 3D seismic covering 75% of the license area, is proving very exciting both in terms of the potential for reserve increases and in the prospective resources that will be drilled in 2013/2014.