LONGREACH OIL AND GAS LIMITED - Option Plan and Share Issuance

TORONTO, Dec. 1 /CNW/ - LONGREACH OIL AND GAS LIMITED (TSX-V:  LOI), an oil & gas Company focused on North Africa, announces that the Board of Directors of Longreach has approved the adoption of an Option Plan ("Plan") on the terms disclosed in Longreach's Filing Statement filed on SEDAR on July 20, 2010, and the issuance of shares in settlement of certain debt as described below.  The Plan and the issuance of shares for debt are subject to approval by the TSX Venture Exchange.  Additionally, the Plan will be subject to approval by Longreach's shareholders.

Option Plan

Under the terms of the Plan, the Board of Directors may from time to time, in its discretion, and in accordance with the requirements of the TSX Venture Exchange, grant to Longreach's directors, officers, employees and technical consultants, non-transferable options to purchase ordinary shares of Longreach, provided that the number of shares reserved for issuance will not exceed 10% of the issued and outstanding Longreach shares. The options will be exercisable for a period of up to 5 years from the date of grant. Under the Plan, the number of shares reserved for issuance in any twelve-month period to:

• any individual director or officer will not exceed 5% of the issued and outstanding shares;
• all technical consultants will not exceed 2% of the issued and outstanding shares; and
• all persons employed to provide investor relations activities will not exceed 2% of the issued and outstanding shares.

Share for Debt Issuance

The Board of Directors of Longreach has also approved entering into an agreement with Fasken Martineau DuMoulin LLP, Longreach's outside legal counsel, to issue to Fasken approximately 131,331 ordinary shares of Longreach at $1.26 per share, representing approximately $165,477.06, all subject to the approval of the TSX Venture Exchange.  The shares are being issued to Fasken in settlement of $165,477.06 owed by Longreach to Fasken.  The price per share at which the shares are being issued to Fasken represents a discount of approximately 10% to the $1.40 per share closing price of the shares on the TSX Venture Exchange on December 1, 2010.  When issued, such shares will be subject to a restricted period and will not be freely tradable until the date that is four months and one day from the date of issuance.

About Longreach

Longreach holds varying interests in four exploration licenses in southern onshore and offshore Morocco, totalling approximately 11.8 million acres of exploration acreage, accounting for some 15% of the country's total license area. 

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

For further information:

Longreach
Bryan Benitz	Chairman & CEO	[phone]
Pelham Bell Pottinger
Mark Antelme / Philip Dennis / Jenny Renton		[phone]

Additional information on Longreach Oil and Gas Limited can be found at www.longreachoilandgas.com or through Longreach's investor relations agent

Additional information on Longreach Oil and Gas Limited can also be found at www.sedar.com