MediterraneanOil&as - Update on Italian offshore drilling law

13^th August 2012

Mediterranean Oil (Stuttgart: A0HL75 - news) ∓ Gas Plc

("the Company", or "MOG")

Further update on the Italian ban on offshore exploration and production

Further to previous updates released on the 27^th June 2012 and the 7^th August 2012 regarding the current drilling ban offshore Italy, the Board of Mediterranean Oil ∓ Gas Plc (AIM: MOG) is pleased to announce that following the recent ratification of Decree 83/2012 (the "Decree") by both houses of the Italian Parliament, the new law number 134 dated the 7th August 2012 has been published in the Italian Official Journal number 187 on the 11th August 2012 and is now in force.

Article 35 of the new law, which relates to exploration and production activities, confirms that restrictions under decree DLGS 128/2010will now apply to activities up to 12 miles offshore the Italian coast, but it will no longer apply to:

(i) applications for production concessions that were under review at the time DLGS 128/2010 came into force, and any connected or subsequent proceedings;

(ii) any titles, including exploration licenses, that had already been issued prior to DLGS 128/2010 coming into force; and

(iii) any proceedings connected with or subsequent to such titles, including possible extensions of the same.

The key benefits of the new law for the Company are that the Company's subsidiary, Medoilgas Italia SpA, can now:

(i) seek award of a production concession covering the Ombrina Mare oil and gas field in the Central Adriatic based upon the application previously submitted by the Company in December 2008, which received technical approval in June 2009 and was completing the final stages of environmental approval when DLGS 128/2010 came into force; and

(ii) focus on increasing the priority of development for the discoveries in the Company's existing production concession AC19.PI in the Northern Adriatic, which is also excluded from the restrictions of DLGS 128/2010.

The new law also confirmed a provision for an increase of 3% in royalties payable by offshore hydrocarbon producers. The proceeds are to be allocated to the state budgets of the Ministry for the Environment, and the Ministry for Economic Development, to support the monitoring and enforcement of marine environmental protection and supervision of environmental safety for exploration and production activities offshore Italy.

The increased royalty of 3% will affect the economics of the Guendalina field, and Ombrina Mare following future development, but the profitability of both these assets remain attractive and the Company is supportive of the proposed use of these funds for increased environmental protection offshore Italy.

Dr. Bill Higgs, Chief Executive of Mediterranean Oil and Gas, commented:

"The publication of this new Italian law allows the Company tolook forward to continuing with the development of the Ombrina Mare field, which is a project that is of considerable strategic importance to the Company. We are already working closely with the regulatory authorities to progress the award of the production concession. Our development of Ombrina Mare field in a safe and environmentally responsible manner will yield a very positive contribution to the Italian and local economies. We believe that this news, together with the progress announced separately today on our Malta Area 4 Licence, position the company to maximise the value of two key assets for the Company. "

QUALIFIED PERSON

In accordance with the guidelines of the AIM Market of the London Stock Exchange (LSE: LSE.L - news) , Dr Bill Higgs, Chief Executive of Mediterranean Oil ∓ Gas Plc, a geologist, explorationist and reservoir manager with over 23 years oil and gas industry experience, is the qualified person as defined in the London Stock Exchange's Guidance Note for Mining (Euronext: SMI.NX - news) and Oil and Gas companies, who has reviewed and approved the technical information contained in this announcement.

NOTES TO EDITORS:

Background on Ombrina Mare:

Ombrina Mare is an oil and gas field discovered in 2008 in the Central Adriatic and located in 20 metres of water depth four miles offshore. Recoverable reserves (2P) are currently estimated to be 40 million barrels of oil and 6.5 Bcf of gas. Medoilgas Italia SpA owns 100% of the License. Exploration Permit BR269 GC, which was awarded in 2005. The Production Concession Application was submitted in December 2008 and pre-approved by the Ministry for Economic Development in June 2009. An Environmental Impact Assessment was submitted to the Ministry for the Environment for approval in December 2009. Development activities were put on hold by the Company to comply with DLGS 128/2010. On the 5^th May, 2012, the Ministry for the Environment granted a three year extension to the exploration permit to May 2015.

Background on Northern Adriatic:

The Guendalina gas field is located inside the AC35.AG production concession approximately 30 miles offshore of the northeast coast of Italy, in 42 metres of water, where MOG has 20% WI (ENI (EUREX: E1NT.EX - news) 80% Operator). The field has 2P gas reserves, independently certified by RPS Energy Limited (RPS), of 31.2 Bcf (6.2 Bcf net MOG). RPS also estimates 3P reserves of 40.3 Bcf (8.1 Bcf net to MOG).

The Aida, Attila and Dorotea gas fields were discovered in the 1990s within production concession AC19.PI where MOG has a 15% WI (ENI 85% Operator). The two discoveries are approximately 12 miles offshore. Aida discovered an estimated 10 to 28 Bcf and Attila and Dorotea discovered an estimated 7 to 17 Bcf of contingent resources, net to MOG. The license also contains the Dorella exploration prospect (13 to 74 Bcf prospective resources, net to MOG).

ENQUIRIES:

Mediterranean Oil ∓ Gas Plc

www.medoilgas.com

Bill Higgs, Chief Executive Tel: +44 (0)7531 731 857

Chris Kelsall, Finance Director Tel: +44 (0)7891 040 658

Liberum Capital Limited (Nominated Adviser and Joint Broker)

Tim Graham/Ryan de Franck Tel: +44 (0)20 3100 2222

GMP Securities Europe LLP (Joint Broker)

James Pope/Chris Beltgens Tel: +44 (0)207 647 2800

Pelham Bell Pottinger (Public Relations)

Archie Berens Tel: +44 (0)207 861 3112 / (0)7802 442 486

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