MOG expects the Ministry of Economic Development to issue the Guendalina production concession by year-end 2009. As a result of this and given the latest timetable provided by ENI SpA ("ENI"), MOG expects ENI to start field development activities in January 2010.

Construction and installation of the production platform is scheduled to be completed in 2010; while the drilling of two development wells is planned in the first half of 2011, with gas production and associated revenues expected to commence prior to the end of June 2011.

ENI is currently reviewing the required development capital expenditure for the project and has informed MOG that it expects an increase in costs compared to previous estimates provided by ENI. The increased project costs are mainly attributable to: (1) recently introduced additional HSE regulatory requirements, requiring the upgrade of the development facilities, and (2) a requirement issued by the Ministry of Environment to install a monitoring system capable of measuring any potential subsidence associated with gas production at the Guendalina field.

On the basis of data provided by ENI and MOG's analysis of the Guendalina project, the Company continues to believe the field will be economic and value accretive to MOG. MOG expects to finance the increase in required capital expenditure through a corresponding increase in its dedicated credit facility. The Company is engaged in discussions with its bankers in this respect and a further announcement will be made in due course.

Based on studies performed by ENI, the aggregate gas production from the field is expected to be around 20 MMcf/d (100% basis). MOG has a 20% interest in the Guendalina gas field which has independently certified 2P gas reserves of 22 Bcf (100% basis).

MOG will provide a further update once the production concession is formally awarded and published in the Ministry's official bulletin.

Tags: Mediterranean Oil & Gas Plc