UK Oil & Gas Investments PLC

("UKOG" or the "Company")

£10 Million Financing and Commencement of BB-1z Optimised Flow Testing

Highlights:

· Further £10 million cash funding secured, giving a total of £16.5 MM raised to-date in 2017

· Company now fully funded to deliver planned drilling and testing programme through 2018

· Optimised sequential flow testing of up to 9 zones underway at Broadford Bridge-1z ("BB-1z")

· Further gas flared from two short tests in Kimmeridge Limestone 1 ("KL1"), KL2 limestone and primary objective limestone horizons KL3, KL4 and KL5 to be tested shortly.

Financing:

UK Oil & Gas Investments PLC (London AIM: UKOG) is pleased to announce that it has today entered into a £10 million loan agreement ("Loan") with Cuart Investments PCC Ltd and YA II PN Ltd ("Investors"), an investment consortium arranged by Riverfort Global Capital Ltd. A first tranche of £7.5 million has been drawn down by the Company, with a second tranche of £2.5 million due to be drawn down on 31 December 2017. The first and second tranches are repayable on 13 November 2019 and 31 December 2019, respectively.

The Loan attracts 0% interest and may, at the sole discretion of the Investors, be converted into new ordinary shares in the Company. The conversion price is the lower of either a share price of 8 pence, or 90% of the Company's lowest daily volume weighted average price ("VWAP") during the five days prior to the conversion date. The Loan is convertible in tranches of not less than £250,000, with a limit of £3 million per quarter, unless otherwise agreed by the Company.

The Loan includes a provision that, for as long as any portion of the Loan is outstanding, neither the Investors nor any of their affiliates shall hold any net short position with respect to the equity of UKOG.

UKOG can repay the principal amount of the Loan at any time for cash, provided that the 5-day VWAP of the Company's equity is less than 8 pence and a prepayment fee equal to 10 per cent of the principal amount of the Loan then outstanding is paid by the Company to the Investors.

Use of Funds:

The Loan, as a source of general working capital, will enable the company to carry out its stated forward drilling and testing programme over the coming 12 months. This programme includes the completion of the BB-1z flow tests, the forthcoming production testing and appraisal drilling programme at Horse Hill and the drilling and testing of the Holmwood exploration prospect, a Horse Hill-1 and BB-1 geological look-alike.

BB-1z Operational Update:

Following the successful removal of the original well completion assembly, optimised sequential flow testing has commenced at the Company's 100% owned BB-1 and 1z exploration discovery, located in licence PEDL234. The new testing programme, formulated in conjunction with the Company's well-test consultants in Houston, Texas and in the UK, encompasses up to nine individual test zones throughout the Kimmeridge Limestone KL1-KL5 reservoir section, each of around 50-100 ft vertical extent. It should be noted with Horse Hill only testing KL3 and KL4, BB-1z will be the first Weald Basin well planned to test discrete KL1, KL2, and KL5 reservoir zones. As previously announced, the first phase of optimised testing utilises much of the well's existing 1047 feet of perforations.

Two short initial tests over secondary shale-dominated fractured reservoir objectives within the KL1 were performed. The interbedded shale and limestone stringers returned gas to the flare. In the second test, completion fluids were returned to the well at an initial natural flow rate of over 370 barrels per day, accompanied by a wet gas blow. Although these two KL1 zones are hydrocarbon bearing, the Company concludes that sustained commercial flow rates from the shale dominated KL1 could likely only be obtained via reservoir stimulation beyond the scope of its existing regulatory permissions.

Testing will now move directly upwards into the overlying KL2 limestone, and then to the primary KL3, KL4 and KL5 limestone-dominated reservoir objectives, where hydrocarbons were recovered to surface from recent BB-1z testing and BB-1 coring operations.

Flow testing is expected to continue until the end of 2017 to establish whether the extensive connected natural fracturing seen in the oil-bearing KL2-KL5 primary objectives can deliver flow at commercial rates and volumes.

About BB-1:

As previously reported, BB-1 was purposely drilled in a location where no conventional hydrocarbon trapping mechanism within the Kimmeridge reservoir section is evident. Therefore, in the Company's opinion, the presence of flowing, light Kimmeridge oil and associated solution gas at BB-1z provides proof that the Kimmeridge at Broadford Bridge contains a significant continuous oil deposit of around 1400 ft gross vertical thickness.

The near identical Kimmeridge reservoir parameters and geology seen at BB-1 and 1z and the Horse Hill-1 Kimmeridge oil discovery, in which the Company holds a 32.435% interest, some 27 km to the northeast, demonstrates that the Kimmeridge oil accumulation is also laterally extensive across the Central Weald Basin and, consequently, a nationally significant oil resource.

UKOG, as the largest licence holder in the Kimmeridge oil accumulation's prospective area is well positioned to exploit this extensive oil resource.

Stephen Sanderson, UKOG's Executive Chairman, commented:

"This £10 MM funding, the largest in the Company's short history, ensures that our stated drilling and testing programme, spanning four wells over the next 12 months, is fully funded.

The programme has key regulatory permits in place, is designed to further appraise the wider Kimmeridge continuous oil deposit plus the Horse Hill Portland oil discovery. Its overall aim is to provide stable commercial production and cash flow by early 2019. A positive programme outcome will give the company a solid base for further drilling and development of the significant untapped Kimmeridge resource-base underlying its extensive licence interests.

The flow testing at BB-1z continues to be a key element of the Company's wider programme and we remain highly encouraged by the natural flow of further hydrocarbons to surface."

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 Sinclair-Ford Tel: 020 7220 1666

Cenkos Securities PLC (Joint Broker)

Joe Nally / Leif Powis Tel: 0207 397 8919

Public Relations

Brian Alexander / David Bick Tel: 01483 243450

Glossary

completion (assembly)	a generic term used to describe the assembly of downhole steel production tubing and equipment within a well that allows safe and efficient production from an oil or gas well
continuous oil 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
flow test	a test period where hydrocarbons are flowed to surface through a test separator. Key measured parameters are oil and gas flow rates, downhole pressure and surface pressure. The overall objective is to identify the well's capacity to produce oil at a commercial flow rate and to recover oil in commercial quantities or volumes
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, being made of the remains of calcareous planktonic algae called coccoliths. The Kimmeridge Limestones are comprised of fine grained coccoliths, fine grained calcium carbonate mud, clay minerals, together with dark grey organic matter
(limestone) stringers	a series of discrete, individual, thin (limestone) beds or rock units, each bed, or unit, being typically up to a few feet in vertical thickness
natural flow	or 'free flow', a well flowing to the surface without the use of a downhole pump
perforation(s)	holes made through the well's steel casing and cement via small shaped explosive charges which connect the reservoir fluids to the well's annulus and permit the flow of fluids into the wellbore
solution gas	or associated gas, is natural hydrocarbon gas generated by the process of transforming organic matter into oil that remains in solution within an oil reservoir under reservoir conditions
wet gas	associated gas derived during the generation of oil in the subsurface that contains methane, ethane, butane, propane and pentane. Wet gas shows were encountered whilst drilling the Kimmeridge at BB-1z, HH-1 and most of the legacy wells drilled in the central Weald area

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 & 1z drilling completed, testing of multiple zones underway
Holmwood ³	PEDL143	40%	UKOG	Europa Oil & Gas (Holdings) plc	91.8	Holmwood-1 exploration well planned in 2018
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	Planning Permission & EA permit granted for production tests and 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	Reviewing M prospect viability and well plan
Isle of Wight (Onshore) ^{2, 3}	PEDL331	65%	UKOG	UKOG	200.0	Preparing Arreton-3 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 Broadford Bridge-1 and 1z discovery well and the extension of the Godley Bridge Portland gas discovery.

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.