Leni Gas & Oil plc (LGO), the AIM listed international oil and gas exploration, development and production company, today gives its corporate update for the six week period commencing 1 August 2009 and production update for August:

Corporate • During August the Company's direct and indirect monthly production totalled 16,103 boe (average 534 boepd) which was similar to July (16,392 boe) • Due to ongoing production development programs in Spain and production restrictions in the Gulf of Mexico 32% of company production was deferred (15% planned developments and 17% production restrictions) against a base monthly production schedule of 23,800 boe (793 boped) as of 2009 start. • The Company appointed Eclipse Petroleum Technology Ltd and Equipoise Solutions Ltd, the international oil & gas consultancy companies, as production engineering and geosciences services suppliers to support LGO worldwide operations.

Spain • The Ayoluengo Oilfield (100% LGO) in northern Spain, through LGO's 100% ownership of Compañia Petrolifera de Sedano, S.L. produced net to LGO 5,477 bbls of oil and 1.144 mmscf of gas during August. Net LGO production in barrels of oil equivalent totalled 5,668 (189 boepd).
• Oil volumes were over 10% higher than July with continuation of the production system modification program, subsequent to well clean-out, to implement sand and water handling controls and stabilise production above 400 bopd. • The results of the well clean-out and production system modification program has identified the need to modify all current well completions and re-configure both surface and downhole production facilities to maximise incremental production from the planned development programs. Through these re-completion and re-confguration programs, the Company is aiming to free flow production from the highest producing wells for the first time in over 20 years. These programs are currently being finalised by Eclipse for execution in Q4 2009 with details to be announced in the next corporate update. • Re-processing of the original 3D seismic survey conducted by Chevron in 1990 was completed with update of the Ayoluengo geological model in progress by Equipoise to revise recoverable reserves estimates and optimise future depletion and infill drilling plans. The revision of reserves and resources shall also include the potential for unconventional gas prospectivity within the Spanish acreage. • Negotiations for new oil sales agreements are continuing to identify multiple off-take points to increase sales volumes and commodity pricing, with modification of the production separation system underway to improve oil specification. • The Hontomin extended well test is planned to commence imminently at end September on conclusion of the current Ayoluengo production system modifications.

US Gulf of Mexico & Gulf Coast • The interests held by Byron Energy (28.94% LGO) in the US Gulf of Mexico and Gulf Coast is producing at a restricted rate of 4,044 boepd gross (58% gas and 42% oil) from the Eugene Island field as announced by the joint venture operator on 23 July 2009. LGO's indirect interest in the Eugene Island field through Byron Energy approximates to an effective net LGO monthly production in barrels of oil equivalent totalling 8,796 (293 boepd).
• Production volumes from Eugene Island are currently affected by various well performance issues due to gas compressor constraints and the onset of water production from the A-8 well. It is planned to continue production of the A-8 well from the current reservoir and augment compression facilities to re-establish production from the low pressure oil wells. • As announced on 07 September, Transcontinental Gas Pipeline Company, LLC ("Transco") has informed the joint venture that it will be performing facility modifications on line "C" of the Southeast Louisiana Lateral Pipeline near Gibson, Louisiana. These modifications are being made in order to facilitate future routine in-line inspections. The modification work will require that Transco shut in numerous production facilities on its pipeline system for an estimated 11 days from 8 September 2009, including the pipeline network serving the Eugene Island field. Accordingly Eugene Island field production will be completely shut in during the repair period. The joint venture will take advantage of the situation to perform a production enhancing procedure on the A-6 well and will return the field to full production immediately upon the completion of the well and pipeline operations. • LGO and Byron Energy are nearing completion of the conversion agreement as announced on 08 April 2009 to transfer the Company's shareholding in Byron Energy to direct ownership of its US Gulf of Mexico and Gulf Coast assets. Under terms of the conversion LGO shall retain 7.25% share of Eugene Island Field production, the ability to acquire up to 29% of Byron Energy's interest in all option properties with Leed Petroleum and an option to acquire a 20% direct working interest in properties acquired by Byron Energy outwith of the Leed Petroleum agreement. This conversion agreement is expected to complete shortly.

Tags: Leni Gas & Oil Plc