DEO Petroleum PLC (“DEO” or “the Company”)

Increase in Ring Fenced Expenditure Supplement

DEO Petroleum welcomes the HM Treasury statement in respect of the increase in Ring Fenced

Expenditure Supplment (‘RFES’) made on 5th July 2011.

The Treasury has raised the annual rate of the RFES from 6% to 10% which will not only ensure existing field allowances work more effectively and equitably to support investment in marginal fields but it will also benefit new categories of field allowance.

DEO expects the Perth field development and the Spaniards prospect to benefit from these changes.

David Marshall, DEO Chief Executive Officer Comments:“This is encouraging news for DEO. The RFES increase provides extra support for investment in the North Sea and demonstrates the Government’s commitment to engage with oil and gas companies and to the North Sea.”5 July 2011Enquiries:

DEO Petroleum plc

David Marshall, Chief Executive Officer

+ 44 (0) 1224 672 111

Heather Ruth, Communications Officer

Canaccord Genuity (Nominated Adviser and Joint Broker)

Charles Berkeley / Henry Fitzgerald-O’Connor

+ 44 (0) 207 050 6500

FirstEnergy Capital LLP (Broker)

Hugh Sanderson / Derek Smith

+ 44 (0) 20 7448 0200

College Hill

Simon Whitehead / Nick Elwes / Alexandra Roper

+ 44 (0) 20 7457 2020

Notes to editors:DEO Petroleum

DEO is an Aberdeen based company whose strategy is to invest in North Sea oil development and production projects with the potential to generate high value returns for shareholders. DEO’s ambition is to be a leading independent energy company within the UK Continental Shelf sector with a reputation for technical and commercial innovation and dynamic project delivery. DEO has a highly experienced management team who will seek, within its asset portfolio, to design creative development solutions particularly where there are technical and/or other challenges, to execute the project delivery of that solution, and to operate throughout the development and production phase of the asset’s life-cycle.

The area of the Perth Field, subject of a Field Development Plan to be submitted by the Perth Field

Group in September 2011 is unaffected by this deal.

www.deo-petroleum.com