Valiant Petroleum to Participate in Blocks 9/22 & 9/23c in the North Sea

Granby has signed a binding Heads of Agreement with Valiant Petroleum to farm out a 25% interest in License P.1208 UKCS blocks 9/22 and 9/23c in the North Sea.

Under the agreed terms, Valiant will fund 100% of the drilling costs of an exploration well up to £7 million. Granby will retain a 25% interest. The exploration well is to be drilled in 2008.

License P.1208 contains multiple prospects, several of which were covered by new high-resolution 2D seismic survey acquired by Granby during 2007. Processing of the new data from this survey is nearly complete and interpretation is to commence shortly.

The assignment of interests is subject execution of a fully termed Farm in Agreement and to approval of the Secretary of State for the Department of Business, Enterprise and Regulatory Reform (DBERR) to the assignment of License interests to Valiant.

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

"This farm out will ensure continuing exploration drilling activity for Granby in 2008 and provides potential for a second well on the license. This deal also clearly demonstrates the value that the industry places on good exploration acreage.

Granby has an active drilling program, with three wells currently drilling, and is preparing for at least three more wells in 2008, including 9/22 and the appraisal of Monkwell. On completion of the sale of our Philippines asset, the company will be in a financially strong position and is continuing to look for new appraisal and development opportunities."

Richard Moreton, Executive Director of Granby Oil & Gas, said:

"We welcome Valiant into the joint venture and look forward to working with them on this license. Granby is looking to continue its farm out strategy with several other licenses available for farm out in both the North Sea and onshore Poland."