GOIL Granby Oil

    8 October 2007

Granby Oil and Gas plc

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

Galoc Oil Development - Commencement of Drilling Operations

Granby, the oil and gas exploration and production company with interests in the UK North Sea  and
the  Philippines, is pleased to announce that Galoc Production Company W.L.L ("GPC"), operator  of
the  Galoc  oil  field,  has commenced drilling operations on the US$86 million  Galoc  Oil  Field
development  offshore NW Palawan in the Republic of the Philippines. Granby has a  9.14%  indirect
interest in the Galoc field through its 15.69% shareholding in GPC.

The  field is located approximately 60 km North West of Palawan Island and was discovered in  1981
at  a  depth  of approximately 2,100m below sea level. The turbidite sandstone reservoir  produced
nearly 400,000 barrels of sweet 35� API oil during a long term test in 1988.

Two  new  deviated  wells,  Galoc-3 and Galoc-4, will be drilled from a  single  wellhead  cluster
location  in  approximately 290m of water. Horizontal reservoir penetration of 1,600m is  planned,
but  actual well lengths will be dependent on the quality of reservoir intersected.  A pilot  hole
will be drilled at the heel of the Galoc-4 well for field appraisal purposes. The Galoc wells will
be  'batch'  drilled  with the top hole sections for both development wells being  drilled  before
drilling the pilot and horizontal sections.

The subsea wells will be connected to the Floating Production Storage and Offloading (FPSO) vessel
'Rubicon  Intrepid' via a seabed pipeline and mid-water riser system. The vessel is  scheduled  to
arrive on site in February 2008 and first oil is expected shortly afterwards.

David Grassick, Managing Director of Granby Oil & Gas, said:

"We  are very pleased that drilling has now commenced on the field and that the project is  making
such good progress."

Bob Moore, Commercial Director of Granby Oil and Gas, said:

"Granby  has  been  instrumental in the development of the Galoc  Field  which  was  previously  a
moribund discovery which has now commenced offshore operations and has first oil scheduled for  Q1
2008.  We  are  also very pleased with the excellent work done by the GPC project management  team
based in Singapore which is operator of the development."


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 (PR Adviser)                                  020 7457 2020
    Nick Elwes / Paddy Blewer                               
                                                            
                                                       

Notes to Editors

Background
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

Granby owns a 54% participating interest in, and is production operator of, the Tristan North West
gas  development in block 49/29b in the UK Southern North Sea. Mitsubishi Corporation,  which  has
provided  a  loan  facility agreement for the development, is also a co-venturer in  the  project.
First gas is expected in early 2008.

Granby  also  has a 9.0% 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 26.8mmcfd  from
the  Lower  Leman Sandstone.  The field was appraised by two further wells which also tested  gas.
Consideration is being given to drilling a new well in 2008 to further appraise the field.

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 ('GPC') which operates the  field.
The  first phase of development is now well underway, with all regulatory approvals obtained,  all
major  contracts awarded and drilling having commenced.  First oil production from  the  field  is
expected in Q1 2008.  Granby's net share of the Galoc proven and probable reserves is 1.83 million
barrels of oil equivalent based on a GCA certified reserves report.

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  an
interest  in  a  single onshore licence in Yorkshire where an exploration well is expected  to  be
drilled before the end of 2007.





                                                                
Granby Oil & Gas plc



                                                                

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