Lineynoye oil field Development Project update

July 29, 2008

Lineynoye oil field Development Project update

PetroNeft Resources plc ('PetroNeft' or 'the Company'), owner and operator of Licence 61, Tomsk Oblast, Russian Federation, is pleased to announce that it has signed an agreement with CJSC "Karos" to supply pipe for the planned, 60km export pipeline from the Lineynoye oil field to the Bashneft Lukpaiskaya custody transfer point, located to the northwest of Licence 61.  The total value of the contract is approximately US $ 10 million, excluding VAT.

The pipe will be sourced from Russian pipe mills in the Urals and Volgograd Regions and will be delivered to staging areas by the end of October 2008.  Construction of the pipeline will commence this coming winter and is scheduled for completion in April 2009 with first production of oil from the Lineynoye oil field in the second half of 2009.

The northern pipeline route, which offers considerable capital expenditure saving compared to other routes, was developed following the signing of a Transportation Protocol with Bashneft in December 2007. A 25 year Transportation Agreement has now been signed with Bashneft, which is the basis for proceeding with the field development.    

Dennis Francis, Chief Executive Officer of PetroNeft Resources plc commented:

"This is another critical milestone on the path to bringing our fields to year-round production in 2009.  This contract confirms both our price and delivery schedule in order to construct the export pipeline this coming winter.  Our Russian staff did an excellent job in the redirection of the necessary pipeline survey and design work after the Bashneft transportation protocol was signed in December 2007."

For further information, contact:

Dennis Francis, CEO, PetroNeft Resources plc,
+1 713 988 2500

Paul Dowling, CFO, PetroNeft Resources plc
+353 1 4433720

Desmond Burke, Director Investor Relations, PetroNeft Resources plc
+353 52 53226

John Frain/Brian Garrahy, Davy, Nomad and Joint Broker
+353 1 679 6363

Jonathan Marren/Matt Goode, KBC Peel Hunt
+44 207 418 8900

Nick Elwes/Paddy Blewer, College Hill
+44 207 457 2020

The information contained in this announcement has been reviewed and verified by Mr. Dennis Francis, Director and Chief Executive Officer of PetroNeft, for the purposes of the Guidance Note for Mining, Oil and Gas Companies issued by the London Stock Exchange in March 2006.  Mr. Francis holds a B.S. Degree in Geophysical Engineering and a M.S. Degree in Geology from the Colorado School of Mines.  He has also graduated from the Harvard University Program for Management Development.  He is a member of the American Association of Petroleum Geologists and the Society of Exploration Geophysicists.  He has over 35 years experience in oil and gas exploration and development.

Forward Looking Statements

This announcement contains forward-looking statements. These statements relate to the Company's future prospects, developments and business strategies. Forward-looking statements are identified by their use of terms and phrases such as 'believe', 'could', 'envisage', 'potential', 'estimate', 'expect', 'may', 'will' or the negative of those, variations or comparable expressions, including references to assumptions.

The forward-looking statements in this announcement are based on current expectations and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by those statements. These forward-looking statements speak only as at the date of this announcement.