GOIL Granby Oil

    21 December 2007

Granby Oil and Gas plc

("Granby" or "the Company" or "the Group")

UK North Sea 211/22a-10 Kerloch Oil Discovery

Granby is pleased to announce the discovery of oil at the Kerloch structure in Block 211/22a NW in
the  UK  Northern North Sea.  The Kerloch well, 211/22a-10, was drilled to a total depth  (TD)  of
12,282  feet and encountered a full Brent reservoir sequence, as predicted prior to drilling.  The
top  of  the Brent sandstone section came in approximately 60 feet high to prognosis. The majority
of  the  Brent sequence was successfully cored, and extensive electric wireline logging operations
are now ongoing and nearing completion.

The  well has discovered an oil column of some 116 feet in the Ness Formation and a number of  oil
samples  have been taken. The crude oil gravity is around 32 degrees API with a gas-oil  ratio  in
line  with other discoveries in the area. The Kerloch well was designed as a slim-hole finder well
with a long open hole section being drilled to TD. Given the successful gathering of comprehensive
data, including cores, wireline logs, reservoir pressure measurements and fluid samples, the joint-
venture  group  has  decided not to carry out a drill stem test in this well  as  this  would  add
significant  cost and technical risk. There has been a considerable number of tests of  the  Brent
sands  in neighbouring wells in the area, including the 2006 East Causeway well which flowed  from
the Ness Formation in the block immediately adjacent to Kerloch at stabilised rates of up to 7,500
barrels of oil per day. A resource update will be issued once the relevant analysis is complete.

The Kerloch well will now be suspended to allow potential re-entry and future use as a development
well.  Granby holds a 10% interest in the Kerloch oil discovery and throughout Block  211/22a  NW,
which already contains an earlier oil discovery.

The  assignment of the 10% interest to Granby is subject to approval of the Secretary of State for
the  Department of Business, Enterprise and Regulatory Reform (DBERR) to the assignment of Licence
interests to Granby.

David Grassick, Managing Director of Granby Oil and Gas, said:
"We  are delighted with this result following our recent farm in to the Kerloch block, and we  are
looking  forward  to  a  busy year ahead in 2008 with rig slots already  booked  for  three  wells
including the Monkwell appraisal well."

Bob Moore, Commercial Director of Granby Oil & Gas, said:
"Following  the  recent  sale of Galoc, Granby is delighted to have recycled  some  of  the  funds
received into a successful North Sea well."

Enquiries:
 Granby Oil and Gas plc                                     020 7648 4950 or
                                                            0845 2577537
    David Grassick, Managing Director                       07785 921080
                                                            
    Nigel Burton, Finance Director                          077 8523 4447
                                                            
    www.granbyoil.com                                       
                                                            
 KBC Peel Hunt (Nominated Adviser)                          020 7418 8900
    Jonathan Marren / Matt Goode                            
                                                            
 College Hill                                               020 7457 2020
    Nick Elwes / Paddy Blewer                               
                                                            

Notes to Editors

Overview of the Business
Granby  Oil  and  Gas  plc (LSE symbol GOIL) is building a significant oil  and  gas  exploration,
development  and production portfolio in carefully selected areas of the North Sea  and  elsewhere
through technical and commercial innovation.

Granby's Portfolio and Plans
In additional to the Kerloch discovery, Granby's current activity includes:

    *   54% interest in the Granby operated Tristan North West gas development in block 49/29b in
        the UK Southern North Sea, which commenced drilling on 27 November 2007
    *   10% interest in the Egdon operated Burton Agnes-1 exploration well onshore in Yorkshire
        which commenced drilling on 15 November 2007.

Granby  has  a  20% interest in the Monkwell gas field in UKCS Licence P.001, Block  42/29a.   The
field was discovered in 1989 by well 42/29-6, which produced gas at a rate of 26.8mmscfd from  the
Lower Leman Sandstone.  The field was appraised by two further wells which also tested gas.  A new
well is planned for 2008 to further appraise the field and to enable a development decision to  be
made.

Granby's  current exploration acreage comprises interests in a portfolio of offshore  licences  in
the  North  Sea, containing multiple prospects generated by the Company.  Granby also  has  a  50%
working  interest in two blocks, one of which contains discovered oil and gas, located in the  gas
prolific Northern Rotliegendes sub-basin onshore Poland.






                                                                
Granby Oil & Gas plc



                                                                

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