UK Oil & Gas PLC

("UKOG" or the "Company")

Acquisition of Further Interest in Horse Hill Oil Discovery and Licences, Weald Basin, UK

UK Oil & Gas PLC (London AIM: UKOG) is pleased to announce that it has entered into sale and purchase agreements with Gunsynd PLC ("Gunsynd") and Primorus Investments PLC ("Primorus") to acquire their combined 7% shareholding in Horse Hill Developments Ltd ("HHDL"), the operator and 65% interest holder in the Horse Hill-1 ("HH-1") Portland and Kimmeridge Limestone oil discovery and 55 square mile (143 km²) PEDL137 and PEDL246 licences ("the Licences"). Upon completion, the Company will hold a majority 56.9% HHDL shareholding, equating to a 36.985% beneficial Licence interest, the largest single beneficial interest holding in both Licences.

As previously reported in July and August, a comprehensive 150-day Extended Well Test programme, designed to confirm the HH-1 well's commerciality is in progress. Results to date from the Portland oil pool have been very positive, with short-term high rate tests achieving stable implied daily pumped rates of 401 and 414 barrels of oil per day of dry 36 API oil over two periods of 6 and 2 hours, respectively. Testing of the two Kimmeridge Limestone oil pools will commence following completion of the Portland test.

Transaction Summary

For a total consideration of £1,925,000, the Company will receive Gunsynd's 2% and Primorus' 5% shareholding in HHDL, equating to a further 4.55% beneficial interest in the Licences. The total consideration, with an effective date of 17 August 2018, comprises £425,000 payable in cash and £1,500,000 through the issue of 85,714,286 new ordinary shares in UKOG ("Consideration Shares"). The Consideration Shares are calculated based on the closing UKOG share price on 16 August 2018 of 1.75 pence. Completion of both acquisitions, which will be announced in due course, is conditional on HHDL consent. In the year ended December 2016, HHDL made a loss of £146,208.

Stephen Sanderson, UKOG's Chief Executive, commented:

"Although modest in overall size, these acquisitions, the first under the Company's new AIM operating company status, are highly strategic in that they deliver to UKOG, the driving force behind the HH-1 Portland and Kimmeridge oil discovery, a majority 56.9% shareholding in HHDL. Importantly, the resultant 36.985% beneficial Licence interest also makes UKOG the largest single party in the HH-1 discovery and Licences. In cooperation with the remaining co-venturers, the Company can now effectively steer the project directly towards planned permanent production and potentially significant cash flow in 2019.

These acquisitions are also fully in line with UKOG's strategy of increasing its working interests in key assets to gain effective control and operatorship."

Qualified Person's Statement

Rob Wallace,  UKOG's principal technical advisor, who has over 40 years of relevant experience in the oil industry, has approved the information contained in this announcement. Mr Wallace is a Chartered Scientist, Chartered Geologist and Fellow of the Geological Society of London, an active member of the American Association of Petroleum Geologists, a member of the Petroleum Exploration Society of Great Britain and a member of the South African Geophysical Society .

For further information, please contact:

UK Oil & Gas 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 / Neil McDonald                                                                           Tel: 0207 397 8919

Public Relations

Brian Alexander / David Bick                                                                      Tel: 01483 243450

UKOG Licence Interests

The Company has interests in the following UK licences:

                Notes:

1. Oil field currently in production.

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

3. Exploration asset with drillable prospects and leads. PEDL234 contains the Broadford Bridge-1 and 1z
  discovery well, the extension of the Godley Bridge Portland gas discovery plus further exploration
  prospects.

4. UKOG has a 100% interest in UKOG (234) Ltd, which has a 100% interest in PEDL234.

5. Oil discovery with successful flow test in 3 zones, further long-term testing scheduled in 2018

6. UKOG has a direct 56.9% 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.