PetroNeft Resources Public Limited Company is a public company registered in Ireland (Company number 408101). Its registered office address is PetroNeft Resources plc, 20 Holles Street, Dublin 2, Ireland. The Company was established to develop oil assets in the Tomsk Oblast in Western Siberia and was admitted to the London AIM and Dublin ESM Markets on 27th September 2006.

The main assets of the Company are a 100% interest in a 4,991 km2 oil and gas licence (Licence 61) in the Tomsk Oblast in Russia, held through its wholly owned Russian subsidiary, Stimul-T and a 50% operating interest in a 2,447 km2 oil and gas licence (Licence 67) also located in the Tomsk Oblast. Both licences are located in the prolific Western Siberian Oil and Gas Basin. Licence 61 contains seven known oil fields, Lineynoye, Tungolskoye, West Lineynoye, Kondrashevskoye, Arbuzovskoye, Sibkrayevskoye and North Varyakhskoye and over 25 Prospects and Leads that are currently being explored. Licence 67 contains the Ledovoye and Cheremshanskoye oil fields and numerous prospects and leads.

The Board of PetroNeft is made up of highly experienced professionals in the International and Russian Oil Exploration and Development business. The Russian Management team has extensive local knowledge and experience in the exploration and development of oil and gas fields in the Tomsk Oblast.

In August 2008 the Company entered into a three year Area of Mutual Interest agreement («AMI») with Arawak Energy. The AMI is structured to enable the two companies to work together on potential opportunities in the Western Siberia Oil and Gas basin where PetroNeft has its main operations. Under this agreement PetroNeft has right of first refusal to be the operator of any joint projects in this basin.

Licence 61

Since acquiring Licence 61 in May 2005, the Company has carried out extensive reprocessing and reinterpretation, using modern technology, of 2,369 line kms of vintage seismic acquired under the Soviet regime. It has also digitised and reinterpreted the logs of 14 wells drilled on the Licence since 1972. Over 1,000 line kms of new CDP-2D infill seismic has been acquired on the Licence. Ten exploration and delineation wells were drilled resulting in the delineaton of the existing Lineynoye and Tungolskoye oil fields and the discovery of five additional oil fields at West Lineynoye (July 2007), Kondrashevskoye (April 2008), Arbuzovskoye (November 2010), Sibkrayevskoye (August 2011) and Northe Varyakhskoye (September 2011).

In 2010 the company constructed a 60 km oil pipeline from the Lineynoye oil field to Imperial Energy’s facility at Kiev-Eganskoye, oil storage and processing facilities at the Lineynoye oil field and nine new production wells at the Lineynoye oil field. Year-round production commenced in late August 2010 and production peaked at abput 3,000 barrels of oil per day in Q1 2011 following fracture stimulation of the wells.

In 2011 a further 14 production/delineation wells were drilled at the Lineynoye field. Also in 2011 three new exploration/delineation wells were drilled on Licence 61 at the Kondrashevskoye oil field and the North Varyakhskaya and Sibkrayevskaya prospects. All three wells were successful with a major new discovery being made at Sibkrayevskoye.

The 2012 work programme consists of the construction of a 10km pipeline from Lineynoye to Arbuzovskoye and the drilling of up to 10 new production wells. An additional delineation well at Sibkrayevskoye is also possible.

Licence 67

Licence 67 was acquired at a state auction in December 2009 for 42 million Roubles (US$1.39 million). In January 2010 Arawak Energy exercised their right under the AMI agreement to participate in Licence 67 for 50%, however PetroNeft remains as operator.

The Licence contains the Ledovoye oil field and several interesting leads and prospects. In 2011/2012 two exploration/delineation wells were drilled at Ledovoye and Cheremshanskaya. The Cheremshanskaya No. 3 well discovered three new hydrocarbon pools and confirmed the Cheremshanskoye oil field (October 2011). The Ledovaya No. 2a well further delineated the Upper Jurassic oil pool and discovered a potential new oil pool in the Lower Cretaceous at the Ledovoye oil field (February 2012).