GOIL Granby Oil

    3 August 2006
Granby Oil and Gas plc

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

Rig Contracted for Galoc Development

Granby, the oil and gas exploration and production company with interests in the UK North Sea  and
the  Philippines,  is  pleased to announce that two separate contracts have  been  awarded  for  a
drilling rig and subsea trees by the operator of the Galoc oil field development, Galoc Production
Company  ('GPC').  Granby,  through its wholly owned subsidiary Team Oil,  has  a  9.14%  indirect
interest in the development via its 15.69% shareholding in GPC.

The  Galoc Field lies in the NW Palawan basin offshore Philippines in a water depth of 320m.   The
field  was  discovered  in 1981 and produced 385,000 bopd on long term test  in  1988.   Team  Oil
demonstrated  the  commercial potential of the field and farmed into Block C of  Service  Contract
Area  14  (SC14)  in  September 2004. Team Oil subsequently arranged the financing  plan  for  the
project then exchanged its interest for a shareholding in GPC.

The  Energy  Searcher, a drill ship managed by Jet Drilling, will be used to drill two  horizontal
subsea  wells  which  will be connected via a flowline and riser system to a floating  production,
storage  and  offloading vessel ('FPSO'). Drilling is expected to begin in July 2007.   First  oil
production  from  the  field is expected in late 2007 at an initial rate of  approximately  15,000
bopd.


David Grassick, Managing Director of Granby Oil and Gas, said:
"These  contracts  are  the first major contracts to be awarded since  approval  of  the  Plan  of
Development by the Philippine Department of Energy in March 2006. These contracts are an important
step  as  they help secure the development schedule at a time when oilfield services and equipment
are in great demand."

Bob Moore, Commercial Director of Granby Oil and Gas, said:
  "Granby  is delighted that this project, in which we have played a major technical and financing
role, is moving forward with the approval of these major contracts."

Enquiries:
 Granby Oil and Gas                                    020 7653 3660
    David Grassick, Managing Director                  07785 921080
                                                       
    Nigel Burton, Finance Director                     077 8523 4447
                                                       
                                                       
 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  oil  and  gas
production  and developments. 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.

Granby has also recently announced that it has earned a 35% interest in the Tristan North West gas
development  in  block 49/29b in the UK Southern North Sea subject to acceptance  of  the  licence
assignment  by  the  Department of Trade and Industry ("DTI") and final approval  of  the  finance
package. The development 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.



                                                                
Granby Oil & Gas plc



                                                                

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