US$5m Initial Bank Facility signed, exploration programme to recommence

PetroNeft Resources plc (AIM: PTR) owner and operator of Licences 61 and 67, Tomsk Oblast, Russian Federation, is pleased to provide an update on its operations.

Highlights:

• Initial US$5 million debt facility signed with Macquarie Bank Limited ("Macquarie")
• 2010-2011 exploration and delineation programme on Licence 61

Debt facility

On 30 March 2010 PetroNeft signed a debt facility with Macquarie Bank Limited for up to US$5 million of which US$2 million is available immediately.

Under the terms of the loan PetroNeft has granted 4,700,000 warrants to subscribe for Ordinary Shares at a price of £0.30. Should further tranches of the loan be drawn Macquarie will be entitled to further warrants.

The facility matures on 30 June 2011.

PetroNeft is also in advanced negotiations with a number of international banks, including Macquarie, with a view to providing a larger facility over the coming months. This larger facility will provide both working capital and the flexibility to advance the Group's exploration and development activities on licences 61 and 67 over the coming years.

2010-2011 Exploration and Delineation programme for Licence 61

At least three exploration/delineation wells will be drilled in this period commencing in October 2010 at the following locations:

• Arbuzovskaya
• Kondrashevskoye
• Sibkrayevskaya

The first well will be the Arbuzovskaya No. 1 well at the Arbuzovskaya (formerly Varyakhskaya) prospect located 10 kilometres east of the Lineynoye oil field

There are three identified structures at Arbuzovskaya which contain approximately 30 million barrels of P3 potential reserves based on Ryder Scott's best estimate (P50). The No. 1 well will be located at the largest of the three structures. The Arbuzovskaya prospects have been selected as a priority due to their close proximity to the Lineynoye oil field where the best quality oil reservoirs have been discovered to date and where the pipeline and field facilities will be located allowing for a low cost and efficient tie in of wells at Arbuzovskaya.

Following a competitive tender process, a contract for the drilling of the well has been entered into with Tomskburneftegaz ("TBNG") whose drilling rig was already on location at the West Korchegskaya prospect.

The rig has been mobilised to the Arbuzovskaya location and the necessary tubulars and materials have been sourced most of which has already been mobilised to site.

In winter 2010/11, two rigs will be mobilised in order to drill a high impact exploration well at the Sibkrayevskaya prospect and a delineation well at the Kondrashevskoye oil field. Potential by-passed pay has been identified at Sibkrayevskaya whereas Kondrashevskoye has the potential for further upside above the 8 million barrels of 2P reserves currently identified at this field.

Analysis of the exploration and potential future development potential of the southern region of Licence 61 and of Licence 67 is ongoing. PetroNeft has identified potentially material upside in both regions and further announcements will be made over the coming months.

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

"We are very pleased to have signed the loan agreement with Macquarie Bank. This facility enables us to accelerate our exploration programme in the northern part of Licence 61 by drilling one high impact exploration well in 2010. Two additional wells will be drilled in 2011, all of which, if successful, can be quickly brought into production utilising the Lineynoye facilities."

Related Party Transaction

In accordance with AIM Rule 13 and IEX Rule 13, the drilling contract is deemed to be a related party transaction as Vakha Sobraliev, a Non-Executive Director of the Company, is principal owner of TBNG.

The Directors, with the exception of Vakha Sobraliev who is involved in the transaction as a related party, having consulted with Davy, the Company's Nominated Adviser and IEX adviser, consider that the terms of the drilling contract are fair and reasonable insofar as shareholders are concerned.

For further information, contact:

Dennis Francis, CEO, PetroNeft Resources plc	+1 713 988 2500
Paul Dowling, CFO, PetroNeft Resources plc	+353 1 443 3720
John Frain/Brian Garrahy, Davy (NOMAD and Joint Broker)	+353 1 679 6363
Jeffrey Auld/Elijah Colby, Canaccord Adams Limited (Joint Broker)	+44 207 050 6500
Martin Jackson, Citigate Dewe Rogerson	+44 207 638 9571
Joe Murray/Ed Micheau, Murray Consultants	+353 1 498 0300

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.

Notes to Editors

PetroNeft Resources plc was established in 2005 to develop oil and gas assets in Russia and the Former Soviet Union and was admitted to the London AIM and Dublin IEX Markets on 27th September 2006.

The main asset of the Company is a 100% interest in Licence 61, a 4,991 sq km oil and gas licence in the Tomsk Oblast in Russia, held through its wholly owned Russian subsidiary, Stimul-T. The Licence is located in the prolific Western Siberian Oil and Gas Basin and contains four known oil fields, Lineynoye, Tungolskoye, West Lineynoye and Kondrashevskoye, and over 25 exploration Prospects and Leads. In December 2009 the Company announced the acquisition of a second oil and gas licence in the Tomsk Oblast in Russia, Licence 67.

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

Since acquiring Licence 61 in May 2005, the Company has carried out extensive reprocessing and reinterpretation, using modern technology, of over 2,500 line kms of vintage seismic acquired in Soviet times. It has also digitised and reinterpreted the logs of 14 wells drilled on the Licence since 1972. PetroNeft also has acquired over 1,000 line kms of new CDP-2D infill seismic and drilled six new exploration/delineation wells. This new seismic and six well drilling programme fully satisfied the exploration work obligation for the full 25 year licence term.

Reserve estimates on Licence 61 prepared by Ryder Scott as of 31 December 2008 were:

Proved reserves	(1P)	10.2 million bbls
Proved and probable reserves	(2P)	70.0 million bbls (P1+P2)
Proved, probable and possible reserves	(3P)	529.4 million bbls (P1+P2+P3)

PetroNeft has also recently announced a crude oil transportation agreement with Nord Imperial, effective for 25 years, which significantly reduces the various permits and associated approvals required for pipeline construction as well as the costs. The new route, from Lineynoye to Kiev-Eganskoye runs adjacent to the Tungolskoye and Kondrashevskoye oil fields and will create useful synergies for future development phases.

On 21 September 2009 PetroNeft announced a US$27.5 million fund raising from international institutional investors which fully funds the Phase 1 Development Plan for the Lineynoye and West Lineynoye Fields. PetroNeft expects to have year-round production from the Licence in the third quarter of 2010 with production of 4,000 bopd by the end of 2010. Production from the Phase 1 project is expected to peak at around 12,000 bopd in 2012.