Russian Reserves Update

PetroNeft Resources plc is pleased to provide an update on the approval of its reserves by Russian State Authorities.

Highlights

• Russian approved C1 + C2 oil reserves increase by 27% to 95 million barrels recoverable^***


• The State Committee for Reserves of the Russian Ministry of Natural Resources has approved the reserves and official registration of newly discovered "Kondrashevskoye" oil field, formerly known as Korchegskaya


• Russian C1 + C2 reserves for Kondrashevskoye are 19.08 million bbls


• Ryder Scott is currently updating PetroNeft's SPE reserves for year end 2008

Approved Russian Reserves

The State Committee for Reserves in Moscow has certified the "Kondrashevskoye" Russian Reserves as shown on the following table. "Kondrashevskoye" oil field was formally the "Korchegskaya" prospect and has been renamed and registered in honour of pioneering Russian Geologist Vladimir Kondrashov who was instrumental in the exploration of Western Siberia.

The Lineynoye reserves were updated for recent drilling results while Tungolskoye reserves remain unchanged.  Lineynoye C1 reserves have increased from 6.12 million bbls to 13.41 million bbls.

	Tonnes	Bbls recoverable***
Kondrashevskoye (Korchegskaya)
C1	219,000	1,703,820
C2	2,234,000	17,380,520
C1+C2	2,453,000	19,084,340
Lineynoye*
C1	1,724,000	13,412,720
C2	5,977,000	46,501,060
C1+C2	7,701,000	59,913,780
Tungolskoye
C1	1,010,000	7,857,800
C2	1,055,000	8,207,900
C1+C2	2,065,000	16,065,700
Total  C1+C2**	12,219,00	95,063,820

 

(*) Lineynoye and West Lineynoye fields are considered as one field by Russian Experts
(**) Current SPE 2P reserves are 62.7 million bbls excluding Kondrashevskoye Field
(***) Conversion based on 43 degree API crude

Ryder Scott is currently updating PetroNeft's year end reserves which will include the new field discovery at Kondrashevskoye.  The new Ryder Scott report will also include potentially significant possible reserves associated with the Lower to Middle Jurassic sequence as identified at West Korchegskaya and Cretaceous sequence as identified and tested in the Kiev-Eganskoye field in adjacent Block 80 to the east of the Traverskaya prospect in Licence 61. 

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

"The registration of new reserves is an important step in the Russian compliance process and we are pleased with the outcome.  While there has been a lot of effort involved in the reserve calculation it has been a smooth process thanks again to our Tomsk staff and local contractors."

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 - Joint Broker
+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.

Glossary of Key Technical Terms

Russian Reserve Classification - The current Russian reserve classification methodology was approved by the Order of the Ministry of Natural Resources in February 2001.  Under the Russian classification system, reserves are subdivided depending on their degree of substantiation into the following main categories:

Category C1 - represents the reserves of a deposit (or portion thereof) which have been determined on the basis of commercial flow tests of oil or gas in wells and positive results of geological and geophysical exploration in untested wells.

Category C2 - reserves are preliminary estimated reserves of a deposit calculated on the basis of geological and geophysical research of unexplored sections of the deposit adjoining sections of a field containing reserves of higher categories and of untested deposits of explored fields.

Category C3 - prospective resources of oil and gas in traps prepared for deep drilling and situated within an oil and gas region, and in developed fields in horizons untested by drilling but proved to be productive in other fields.

Category D1 - Prognostic resources of oil and gas in lithostratigraphic units evaluated within major regional structures with proved and oil and gas commercial potential.

Russian calculations have historically not used economic assumptions in estimating reserves (beyond the commercial flow test).  Generally, Russian methodologies classify oil and gas deposits as reserves if such deposits are technically recoverable.