UK Oil & Gas Investments PLC

("UKOG" or the "Company")

Operational Update,

Further Oil Recovered to Surface, Extended Flow Testing Phase Commences

Broadford Bridge-1 and 1z Exploration Well, Weald Basin, UK

Highlights

· Broadford Bridge-1z ("BB-1z") sidetrack completed as a potential oil producer with an aggregate total of 1,064 ft of perforations over eight naturally fractured Kimmeridge zones, including a new uppermost reservoir zone, Kimmeridge Limestone 5 ("KL5"), where mobile light oil was recovered to surface in BB-1 cores.

· Following each of four extensive perforation runs, a pressure increase was observed in the well annulus together with live, mobile oil shows at surface.

· Drilling and completion phases now successfully completed. Drilling rig departed safely from the well site without incident.

· Rig-less extended flow testing phase now underway. Flow testing over multiple Kimmeridge reservoir zones to commence following rig-up of well test equipment. All necessary regulatory permissions for flow testing in place.

UK Oil & Gas Investments PLC (London AIM and ISDX: UKOG) is pleased to announce that, following today's departure of the drilling rig, it has now commenced the flow testing phase at its 100% owned BB-1 and 1z exploration well, located in licence PEDL234. All necessary permissions are in place to commence flow testing of multiple Kimmeridge Limestone reservoir zones following the rig-up of well test equipment.

Prior to rig departure, the well was successfully perforated and completed as a potential oil producer over a gross Kimmeridge reservoir interval spanning 3,920-5,657 ft MD. The perforated section spans eight naturally fractured Kimmeridge Limestone and interbedded shale reservoir units, with a total aggregate perforated section of 1,064 ft. Further to previous announcements, the perforated section was increased to include a further naturally fractured reservoir zone, designated KL5, where mobile, light oil was recovered to surface from core.

Following each of four tubing conveyed perforating (TCP) runs, a pressure increase was observed in the well's annulus, indicating likely flow of reservoir fluids into the wellbore. Additionally, reverse circulation, immediately following perforating, saw significant mobile, light oil shows returned to surface, further confirming the presence of light oil within the full completed Kimmeridge section.

In order to minimise HGV impact during peak traffic time and to ensure a safe exit operation, it was agreed with both West Sussex County Council and Sussex Police to move the rig from the site as early today as possible. The rig move was accomplished without incident followed by the delivery of flow testing equipment to the site.

The comprehensive extended flow test programme is specifically designed to gather further supportive evidence that the Kimmeridge contains mobile light oil within an extensive continuous oil deposit, which can flow to surface at commercial rates and in commercial volumes. Flow test results will be reported in due course.

About BB-1

BB-1 and BB-1z, an exploration step-out, is located south of Billingshurst, West Sussex, within the 300 km² PEDL234 licence, in which the Company has a 100% interest via its ownership of the licence's operator, Kimmeridge Oil & Gas Limited ("KOGL").

As previously reported, in the Company's opinion, the multiple positive indications of mobile light oil observed throughout the entire naturally fractured KL0 to KL5 target reservoir sections are supportive that a significant continuous oil deposit, with a vertical extent of around 1,400 ft has been demonstrated by BB-1 and 1z. In 2016, two units of this zone, KL4 and KL3, flowed oil at a stable aggregate rate of 1,365 barrels per day in 2016 in the Horse Hill-1 discovery near Gatwick Airport.

This continuous oil deposit therefore likely underlies the entire PEDL234 licence and a significant area of the wider Weald Basin, including the Horse Hill-1 Kimmeridge oil discovery some 27 km to the north east. The Company has the largest licence holding in the Weald Basin and within the prospective area of the Kimmeridge play.

Stephen Sanderson, UKOG's Executive Chairman, commented:

"I am delighted to report the safe and successful completion of the drilling and completion phase of the well at our flagship Broadford Bridge oil discovery.

The well continues to deliver significant technical insights, this time via the extensive perforation programme, the results of which provides further encouraging confirmation of mobile, light oil within the target Kimmeridge reservoir zones.

I thank all the many staff and contractors involved for their professionalism and dedication in delivering the well in optimal condition for the extensive flow testing programme, which is now underway."

Qualified Person's Statement

Stephen Sanderson, UKOG's Executive Chairman, who has over 35 years of relevant experience in the oil industry, has approved the information contained in this announcement. Mr Sanderson is a Fellow of the Geological Society of London and is an active member of the American Association of Petroleum Geologists.

For further information, please contact:

UK Oil & Gas Investments PLC

Stephen Sanderson / Kiran Morzaria Tel: 01483 243450

WH Ireland (Nominated Adviser and Broker)

James Joyce / James Bavister Tel: 020 7220 1666

Cenkos Securities PLC (Joint Broker)

Nick Tulloch / Neil McDonald Tel: 0131 220 6939

BPA Media/Square 1 Consulting (Public Relations)

Brian Alexander / David Bick Tel: 01483 243450

Glossary:

core or coring	a drilling technique that involves using a doughnut-shaped drilling bit to capture or "cut" a continuous cylinder-shaped core of undamaged in-situ rock. The core is captured in a steel pipe or "core barrel" above the bit. Core is normally cut in 30 feet lengths, or multiples of 30 feet, and normally with a diameter of 3.5 or 4 inches. Core is taken in petroleum reservoir rocks for detailed laboratory analyses of petrophysical and geomechanical parameters
completion or well completion	the process of making a well ready for production. This principally involves preparing the bottom of the hole to the required specifications, running in the production tubing and its associated downhole tools as well as perforating as required, together with the appropriate completion fluid contained in the well. The process of running in and cementing the casing can also be included in this category
continuous oil deposit or resource deposit	a petroleum accumulation that is pervasive throughout a large area, which is not significantly affected by hydrodynamic influences (i.e. the buoyancy of oil in water) and is not trapped by structural or stratigraphic geological conditions. The deposit, in contrast to conventional accumulations, has therefore not accumulated by the migration of petroleum over medium to long distances. The petroleum in such deposits is found within, or immediately adjacent or close to, the pore spaces where the petroleum is generated, i.e. those pore spaces lying within petroleum source rocks containing organic rich compounds (kerogen) that, when heated over geological time, transform into petroleum. These accumulations are generally associated with organic-rich shales such as the Kimmeridge Clay Formation. Such accumulations do not generally contain significant volumes of free, mobile formation water and therefore have no observable hydrocarbon-water contacts. The extent of the accumulation is generally defined by the limit of where burial depths have been sufficient to transform organic matter within the petroleum source rock unit into petroleum
discovery	a discovery is a petroleum accumulation for which one or several exploratory wells have established through testing, sampling and/or logging the existence of a significant quantity of potentially moveable hydrocarbons
limestone	a sedimentary rock predominantly composed of calcite (a crystalline mineral form of calcium carbonate) of organic, chemical or detrital origin. Minor amounts of dolomite, chert and clay are common in limestones. Chalk is a form of fine-grained limestone
naturally fractured reservoir	a fractured reservoir contains open and usually connected cracks or fissures within the rock matrix; fractures can enhance permeability of rocks greatly by connecting pore-spaces together; naturally fractured reservoirs have been created over geological time by nature, not man-made via hydraulic fracturing
live oil shows	traces of mobile oil, and indications via odour and yellow fluorescence under UV light, observed while drilling or completing a well.
perforating, perforation	The use of tubing (typically) to convey perforating "guns" to the required well depth. Perforating guns are devices used to prepare wells for production, containing shaped explosive charges in a range of sizes and configurations to optimise the depth of penetration through the well casing and into the adjacent reservoir rock
shale	a fissile rock that is formed by the consolidation of clay, mud, or silt particles, and that has a finely stratified or laminated structure. Certain shales, such as those of the Kimmeridge Clay, often contain a significant proportion of organic material, which when subject to increasing temperature and pressure over geological time transform into petroleum (known as petroleum "source rocks")
sidetrack	re-entry of a well from the well's surface location with drilling equipment for the purpose of deviating from the existing well bore to achieve production or well data from an alternative zone or bottom hole location, or to remedy an engineering problem encountered in the existing well bore
step-out well	a well specifically designed to determine the lateral extent of a discovered hydrocarbon accumulation or play.
well annulus	The space between two concentric objects, such as between the wellbore and casing or between casing and tubing, where fluid can flow.

UKOG Licence Interests

The Company has interests in the following ten UK licences:

Asset	Licence	UKOG's Interest	Licence Holder	Operator	Area (km²)	Status
Avington ¹	PEDL070	5%	UKOG (GB) Limited	IGas Energy Plc	18.3	Field in stable production
Baxters Copse ²	PEDL233	50%	UKOG Weald Limited	IGas Energy Plc	89.6	Appraisal/development well planned; licence extended to 2018
Broadford Bridge ³	PEDL234	100%	Kimmeridge Oil & Gas Limited ⁴	Kimmeridge Oil & Gas Limited ⁴	300.0	BB-1 flow testing underway
Holmwood ³	PEDL143	30%	UKOG	Europa Oil & Gas (Holdings) plc	91.8	Holmwood-1 exploration well planned in 2017/18
Horndean ¹	PL211	10%	UKOG (GB) Limited	IGas Energy Plc	27.3	Field in stable production
Horse Hill ⁵	PEDL137	32.435%	Horse Hill Developments Ltd ^⁶	Horse Hill Developments Ltd ^⁶	99.3	Submitted planning application for long term production tests and drilling of two wells
Horse Hill ⁵	PEDL246	32.435%	Horse Hill Developments Ltd^⁶	Horse Hill Developments Ltd ^⁶	43.6	As above
Isle of Wight (Offshore) ³	P1916	100%	UKOG Solent Limited	UKOG Solent Limited	46.7	Preparing drilling planning submission
Isle of Wight (Onshore) ^{2, 3}	PEDL331	65%	UKOG	TBA	200.0	Preparing drilling planning submission
Markwells Wood ²	PEDL126	100%	UKOG (GB) Limited	UKOG (GB) Limited	11.2	Submitted planning application for appraisal and field development

Notes:

1. Oil field currently in production.

2. Oil discovery pending development and/or appraisal drilling.

3. Exploration asset with drillable prospects and leads. Contains the extension of the Godley Bridge Portland gas discovery and the site of the Broadford Bridge-1 and 1z well.

4. UKOG has a 100% interest in Kimmeridge Oil & Gas Limited, which has a 100% interest in PEDL234.

5. Oil discovery with recently completed flow testing.

6. UKOG has a direct 49.9% interest in HHDL, which has a 65% interest in PEDL137 and PEDL246.

The information contained within this announcement is deemed by the Company to constitute inside information under the Market Abuse Regulation (EU) No. 596/2014.