Mediterranean Oil & Gas : Ombrina Mare Legal Appeal Result

17 April 2014

Mediterranean Oil & Gas Plc

(the "Company" or "MOG")

Ombrina Mare Legal Appeal Result

The Board of Mediterranean Oil & Gas Plc (AIM: MOG) announces that, following the tribunal hearing held on 9 January 2014 in Rome, the Lazio Regional Administrative Court has rejected the appeal filed by Medoilgas Italia S.p.A ("Medoilgas"), a wholly owned subsidiary of MOG. This appeal was aimed at obtaining an annulment of the letter sent by the Ministry of the Environment and of Protection of Land and Sea ("MEPLS") on 9 July 2013 instructing Medoilgas to complete an 'Autorizzazione Integrata Ambientale' (an Integrated Environmental Authorisation) ("AIA") for the Ombrina Mare project as a precursor to MEPLS considering the approval of the Environmental Impact Assessment ("EIA") decree.

The ruling rejects the Company's claim that the release of the EIA decree for the Ombrina Mare project does not require prior approval of the AIA.  As a result of the ruling, Medoilgas has advised the Ministry that it has already prepared the necessary documentation and is ready to immediately initiate the AIA procedure. 

In the judgment the court also did not accept any of the counter claims submitted as part of the tribunal process.  Accordingly, the court has instructed all parties to pay their own costs.

The Company is reserving its right of appeal against the Court's judgment.

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

"While we are obviously disappointed with the ruling, in the possible event of this outcome we had already been working hard in the interim to undertake the activities necessary to complete an AIA submission. At this time it is difficult to predict how long MEPLS will take to evaluate MOG's submission and we look forward to working closely with MEPLS to gain approval in due course."

Ends

ENQUIRIES:

Mediterranean Oil & Gas Plc

www.medoilgas.com

Bill Higgs, Chief Executive/ Chris Kelsall, Finance Director   Tel: +44 (0)207 959 2322

Liberum Capital Limited (Nominated Adviser and Joint Broker)

Clayton Bush/Tim Graham/ Ryan de Franck                        Tel: +44 (0)203 100 2222

RBC Capital Markets (Joint Broker)                                               

Matthew Coakes/Jeremy Low /Jonny Hardy                         Tel: +44 (0)207 653 4000

FTI Consulting (Public Relations)                                      

Ben Brewerton/Alex Beagley                                                Tel: +44 (0)203 727 1065

Notes to Editors

Medoilgas Italia S.p.A ("Medoilgas") is a wholly owned subsidiary of MOG.  Medoilgas was granted an Exploration Permit in May 2005 and has been seeking the award of production concession d30 BC-MD, which contains the Ombrina Mare oil and gas field, since December 2008.

The approval of the Environmental Impact Assessment submitted by the Company to MEPLS is a key step in the process for the award of a Production Concession to the Company. The EIA describes the environmental impact of the proposed development.  The environmental impacts from the Ombrina Mare development plan fall well within all of the allowable limits under Italian law.

The EIA was approved by the EIA Technical Committee in January 2013 following the confirmation in October 2012 from MEPLS that the EIA procedure could be completed without performing the AIA. 

A Production Concession is required by Italian law prior to any company undertaking investment to develop an asset and produce hydrocarbons.  Once the EIA is approved by MEPLS, the subsequent award of the Production Concession by the Ministry of Economic Development covering the Ombrina Mare development will enable the Company to progress the development of the oil and gas assets.

The Integrated Environmental Authorisation ("AIA") process is a further detailed study of all of the emissions from the producing facility. Such a study is only required when there is more than one source of emissions, and when the details of the emissions are clearly known.  In the case of the Ombrina Mare development plan the only source of emissions in the first few years of production will be from the gas-fired power generation unit located on the production facilities and required to supply electricity for the development.

The total investment by the Company in the Ombrina Mare project to date is more than €24 million.

A timeline of events can be seen below:

5 May 2005

·The Company was granted the Exploration Permit related to the sea area identified as B.R269.GC in the Adriatic Sea.

2005-2008

·During this period the Company fulfilled all its exploration commitments and, in 2008 drilled two wells, discovered the Ombrina oil and gas field, completed one well as producer and installed a temporary platform.

17 December 2008

·Medoilgas submitted its application for a Production Concession for Ombrina Mare to the Ministry of Economic Development.

23 June 2009

·Received a favourable opinion from the Commission for Hydrocarbons and Mining Resources.

3 December 2009

·Medoilgas submitted its application for the EIA to MEPLS.

26 August 2010

·Following the Deep-water Horizon drilling incident at the Macondo oilfield in the Gulf of Mexico, the Italian Government amended the Italian Environmental Code with Legislative Decree no. 128/2010 prohibiting exploration and production activities in certain sea and coastal areas, including authorisations under review such the Ombrina Mare Project.

8 November 2010

·On the basis of the prohibition in Legislative Decree no.128/2010, MEPLS announced that it would issue an unfavourable opinion on the Ombrina Mare Project EIA.

22 November 2010

·Medoilgas made a submission to MEPLS disputing the application of the Legislative Decree no. 128/2010 prohibition to the Ombrina Mare Project.

26 June 2012

·Following strong lobbying activity by Medoilgas and the oil and gas sector, Law Decree no. 83/2012 entered into force, modifying the offshore restrictions to Exploration and Production introduced by Legislative Decree no. 128/2010, such that the prohibition no longer applies to applications that were under review at the time the prohibition came into force. Therefore, the Ombrina Mare Project now falls outside the scope of the prohibition.

11 July 2012

·MEPLS re-started the EIA procedure.

August 2012

·The Decree no. 83/2012 was converted into law (Law 134/2012), lifting the ban for applications that were under review at the time the prohibition came into force.

24 October 2012

·Medoilgas received formal notification from MEPLS that, consistent with the conditions required by law, the EIA procedure could be completed without performing the AIA at this time.

25 January 2013

·The EIA Technical Committee approved the draft EIA with a positive ruling for the Ombrina Mare Project.

11 February 2013

·The Ministry of Cultural Heritage and Activities confirmed its favourable opinion for the Ombrina Mare Project, as previously expressed on 30 June 2010.

March 2013

·MEPLS decided to re-open the EIA procedure to allow the Abruzzo Region to submit a late opinion on the Project.

3 April 2013

·The EIA Technical committee once again confirmed its positive ruling for the Ombrina Mare Project.

17 April 2013

·The EIA Director General of MEPLS transmitted the draft EIA decree for the Ombrina Mare Project with a positive recommendation to the Minister for signing.

·The draft EIA decree has sat in the Ministerial inbox ever since. Once the decree approving the EIA is issued, and co-signed by the Minister for the Cultural Heritage, it will be the responsibility of the Ministry of Economic Development to issue a Production Concession.

28 April 2013

·A new Government headed by Mr. Enrico Letta is appointed. Mr. Andrea Orlando is appointed as Minister of MEPLS.

1 July 2013

·In response to the lengthy and continuing delays to the EIA approval process for the Ombrina Mare Project, Medoilgas wrote to MEPLS giving the Ministry 10 days' notice to complete the issuance of the EIA Decree, in accordance with applicable regulations.

9 July 2013

·MEPLS sent a letter requesting Medoilgas complete an ' Autorizzazione Integrata Ambientale ' (an Integrated Environmental Authorisation) ("AIA") for Ombrina Mare as a precursor to the Ministry considering the approval of the EIA.

8 August 2013

·Medoilgas filed an appeal before the Administrative Court in Rome against MEPLS aimed at obtaining the annulment and, as an interim measure, the suspension of the letter dated 9 July 2013 from MEPLS requesting the Company to apply for and obtain an AIA as a precondition for MEPLS' approval of the EIA for Ombrina Mare.  As part of the Appeal, the Company has also requested a judicial order to instruct MEPLS to issue the EIA Decree.