GOIL Granby Oil

    Wednesday 2 August 2006
Granby Oil and Gas plc

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

Granby  acquires  interest in UK gas development - first gas expected late 2007,  with  production
expected to exceed 30bcf

Granby, the oil and gas exploration and production company with interests in the UK North Sea  and
the  Philippines, announces that it has reached agreement with ExxonMobil affiliates to acquire  a
50%  interest in block 49/29b in the UK Southern North Sea containing the Tristan North  West  gas
development  subject  to  acceptance of the licence assignment by  the  Department  of  Trade  and
Industry ("DTI").

The  Tristan  North West accumulation contains proven gas, which was discovered  in  1987  by  the
49/29b-5 exploration well. Tristan North West lies next to the previously produced Tristan  field.
The Board believes that the accumulation represents an economically attractive opportunity, and is
expected to produce in excess of 30bcf, with first gas potentially as early as Autumn 2007 and  an
economic field life of approximately 5 years.

Mosaic  Natural Resources Limited ("Mosaic") will acquire the remaining 50% interest in  the  same
block,  having originally signed a Sale and Purchase Agreement ("SPA") with ExxonMobil  affiliates
in  2005  for  the entire block. Granby, together with Mosaic, expects to complete  the  SPA  with
ExxonMobil affiliates during August 2006 subject to DTI approval.

Granby has provided technical and commercial assistance to Mosaic, including the introduction of a
financial partner.  Terms have been agreed under which the partner will fund the majority  of  the
cost  of the Tristan North West development, which is expected to cost approximately $80m,  whilst
the  partner  will acquire at a later date from Granby and Mosaic, a 30% equity  interest  in  the
project.  The finance is subject to final approval by the partner Board, which is expected  to  be
received at the end of August.  Granby and Mosaic will each retain a 35% interest in the project.

David Grassick, Managing Director of Granby Oil and Gas, said:
  "Our  agreement with Mosaic is an important step towards completing the financing of the Tristan
North  West  development,  which will become our second development project,  and  which  has  the
potential to create significant value for Granby. Granby also has a good portfolio of high quality
exploration prospects in the North Sea, and we are making good progress on financing our  drilling
programme through farm outs.

Bruce Appelbaum, Chairman of Mosaic, said:
"Mosaic  is delighted to be working with Granby to bring Tristan North West, our first  North  Sea
project,  to  fruition. Granby's subsurface and commercial expertise complements  our  skills  and
experience."

Enquiries:
 Granby Oil and Gas                                    020 7653 3660
    David Grassick, Managing Director                  07785 921080
                                                       
    Nigel Burton, Finance Director                     077 8523 4447
                                                       
 Mosaic Natural Resources                              01224 247641
    Doug Waterston                                     07789 207370
                                                       
 College Hill                                          020 7457 2020
    Nick Elwes / Paddy Blewer                                       
                                                       

Notes to Editors

Background

Overview of Granby
Granby  Oil and Gas plc (ticker symbol GOIL) is an oil and gas business focused on exploration  in
carefully  selected  areas  in the North Sea and elsewhere, and also on  securing  production  and
development.  The  Group's strategy is to build a significant portfolio  of  assets  through  both
discovery and exploitation of oil and gas reserves.

The  Group  was  created by the combination of Granby Enterprises and Team  Oil,  two  independent
companies  formed  in 2002 which have had common management teams and ownership since  June  2004.
Granby raised �11.5m in 2005, of which �10m was from a placing and Admission to AIM in June 2005.

The  management  team includes six former executives from Enterprise Oil plc, one of  the  largest
independent companies operating in the North Sea during the 1980s and 1990s.

Granby's portfolio and plans
Granby  is planning a multi-well exploration programme in the North Sea for 2006 and 2007, and  is
in  the  advanced stages of farming out several licences awarded in the 22nd and  23rd  Rounds  to
enable this to proceed. Granby aims to participate in drilling three firm fully funded exploration
wells  by  mid  2007.  All these wells, two offshore and one onshore, are  100%  funded  by  other
companies.

The  current asset base of Granby comprises interests in 13 UK offshore licences spanning a  total
of  23  blocks  and  part blocks in the Central and Southern North Sea and  the  Forth  Approaches
(703,099  acres),  containing  multiple prospects generated by the Company  with  a  net  unrisked
potential of 362 million barrels.

In  addition,  Granby  has  a  9.14% indirect interest in the Galoc field,  offshore  Philippines,
through  its 15.69% shareholding in the Galoc Production Company which operates the field.   First
oil  production from the field is expected in late 2007 at an initial rate of approximately 15,000
bopd.

Overview of Mosaic Natural Resources www.mosaicresources.com
Mosaic  Natural Resources, formed in 2004, is focused on acquiring and developing  crude  oil  and
natural gas fields in the UK sector of the North Sea. The company is registered in the UK and  has
business  offices in Aberdeen and Houston. Mosaic's E&P expertise results from extensive  business
and  technical  experience gained in the oil and gas industry. Bruce Appelbaum, Chairman,  was  an
executive with Texaco Inc. prior to its merger with Chevron. Mosaic's other principals are largely
former  Texaco  personnel  with extensive North Sea and international exploration  and  production
experience.

                                                                
Granby Oil & Gas plc



                                                                

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