Cambrian Oil & Gas Raises Funds for Acquisition

The Directors of Cambrian Oil and Gas have placed 151,766,662 new ordinary shares of 1 pence each (the "Placing Shares") at 3 pence per ordinary share through its broker W.H. Ireland Limited, raising 4.55 million gross of expenses (the "Placing"). Application has been made to London Stock Exchange plc for the Placing Shares to admit to trading on AIM on October 23, 2006.

The Placing Shares are to be issued together with one warrant for each Placing Share subscribed, each warrant entitling the holder to subscribe for one ordinary share in the Company at 3 pence per ordinary share (the "Warrants"). Each Warrant granted shall be exercisable in whole or in part at any time up to 12 months from the date of admission of the Placing Shares to trading on AIM becoming effective in accordance with the AIM Rules. The Warrants will not be admitted to trading on AIM. Following the completion of the Placing there will be 309,993,821 Ordinary Shares in the Company in issue and trading on AIM.

As was announced on October 12, 2006, Xtract Energy PLC is a related party under the AIM Rules. As part of the Placing, Xtract subscribed for 65,000,000 new ordinary shares, giving it an aggregate holding of 35.37 per cent. of the Company on completion of the Placing. This subscription by Xtract represents, under the AIM Rules, a related party transaction. The Directors of the Company consider, having consulted with its nominated adviser, that the terms of the subscription are fair and reasonable insofar as its shareholders are concerned.

As was announced on October 12, 2006, the subscription by Cambrian Mining PLC ("Cambrian") for 53,333,333 new ordinary shares in the Placing, resulting in a total interest in the Company of 17.20 per cent on completion of the Placing represents, under the AIM Rules, a related party transaction. The Directors of the Company, other than John Byrne (who is a director of Cambrian), consider, having consulted with its nominated adviser, that the terms of the subscription are fair and reasonable insofar as its shareholders are concerned.

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