GOIL Granby Oil

    29 October 2007

Granby Oil and Gas plc

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

Sale of interest in Galoc oil development to Otto Energy

    *       Granby will receive $25.5 million cash as consideration and loan repayment (subject to
        approval by Otto Energy's shareholders)
    *       Demonstrates ability to create and crystallise value for shareholders

Granby, the oil and gas exploration and production company with interests in the UK North Sea  and
the Philippines, is pleased to announce signature of an agreement for the sale of its interest  in
the  Galoc Oil Field offshore development in the Republic of the Philippines for US$19.25  million
cash  plus  one million shares and four million options at 34 Australian cents per  share  in  the
purchaser, Otto Energy Limited (ASX: OEL) ("Otto").

Granby is selling its wholly owned subsidiary Team Oil, which has a 9.14% indirect interest in the
Galoc field through its 15.69% shareholding in Galoc Production Company W.L.L ("GPC"), operator of
the  Galoc  oil  field.  As  announced on 8 October 2007, drilling has  commenced  and  first  oil
production  from  the field is expected in Q1 2008.  Granby's net share of the Galoc  reserves  is
1.83  million  barrels of oil equivalent. Team Oil has no turnover and had audited net  assets  of
approximately �0.05 million at 31 March 2007.

Otto  is acquiring an identical interest in GPC held by Cape Energy Philippines SA, and has  today
announced  that it is funding the acquisition by placing 226 million new shares at a price  of  30
Australian cents per share. The funding has been fully underwritten, with completion of  the  sale
subject only to the approval of Otto's shareholders. Completion of the transaction is expected  in
early December 2007.

The  total  cash consideration payable to Granby is US$25.5 million (approximately �12.44  million
based on the current exchange rate of US$2.05=�1.00), comprising:

a)    US$16.66 million payable at Completion;
b)    repayment of existing Shareholder Loan amounts to GPC of approximately US$2.59 million; and
c)    repayment  of the approximately US$6.3 million deposit held in escrow with Banca  Intesa  as
      security for the project financing.

In  addition,  Otto will issue to Granby one million shares in Otto (to be held in  escrow  for  a
period  of  12  months  from  completion of the transaction) and  four  million  options  (without
performance  conditions) at an exercise price of 34 Australian cents per  share  (to  be  held  in
escrow  for  a  period of 12 months from completion of the transaction) and  which  lapse  if  not
exercised within 24 months from their issue.

Based  on the cash available of �4.69 million at 30 September, expected expenditure in the  period
prior  to completion, and receipt of the US$25.5 million cash consideration at completion  of  the
transaction,  Granby  is  expected to have approximately �17 million of  cash  available  to  fund
further development of the business.

Tristone Capital acted for both Granby and Cape Energy by conducting the process resulting in  the
sale to Otto.

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

"We  are  delighted to announce the sale of our interest in Galoc which very clearly  demonstrates
our ability to create value for shareholders. Granby has sought to optimise the value that can  be
obtained  in the medium term and is ready to reinvest some of the proceeds in financing our  third
development,  which  we  aim  to announce shortly. As a key part of  the  consideration,  Granby's
shareholding  and options in Otto will provide Granby's shareholders with potential upside  should
the development exceed current expectations."

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

"The  successful  sale  of Galoc, which Granby was instrumental in transforming  from  a  formerly
stranded  discovery  into  a  commercial development that  is  currently  drilling,  very  clearly
demonstrates  our  ability  to  create  value for shareholders  through  the  integration  of  our
technical,  commercial and financial skills. Although we will be sad to end our direct involvement
in  the development, we are pleased that Otto, which has existing interests in the Philippines, is
moving  forward with the Galoc project to the next stage. We would like to thank the  shareholders
and  staff  of  GPC,  all our partners and those, including the Philippine  Government,  who  have
enabled this project to proceed."


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

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, and Mosaic Natural  Resources  are  co-
venturers  in  the project.  The first phase of subsea development operations has  been  completed
with  the  flowline and control umbilical installed, hydro-tested and trenched.  Drilling  of  the
single  subsea development well is scheduled to commence in November 2007.  First gas is  expected
in  early  2008.  Granby's  share of P50 reserves is 14.7 bcf (billion  cubic  feet  of  gas),  as
independently verified by TRACS International.

Granby  has  a 9.00% 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. 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  an
interest  in  a  single  onshore licence in Yorkshire where an exploration  well  is  expected  to
commence drilling before the end of 2007. As announced on 12 October, Granby also has an option to
acquire  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.

The  resource  and reserves information in this announcement has been prepared in accordance  with
the guidance in AIM notice 16 (AIM rules - guidance for Mining and Oil & Gas Companies) issued  in
March  2006.  This  resource update is prepared in accordance with the  definitions  used  by  the
Society  of  Petroleum Engineers (SPE).  The Directors can confirm that these  figures  have  been
reviewed  by  Richard  Moreton,  Executive Director,  who  has  over  23  years  experience  as  a
geophysicist within the oil industry.

Otto Energy
Otto Energy Limited is an ASX listed company (ASX: OEL) with exploration and development interests
in the Philippines, Turkey and Argentina.
www.ottoenergy.com
Alex Parks (CEO)                         Jill Thomas/John Williams
Otto Energy                                      Professional Public Relations
Phone: +61 8 9226 0001           Phone: +61 8 9388 0944


                                                                
Granby Oil & Gas plc



                                                                

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