Operations update

September 19, 2012

19 September 2012

PetroNeft Resources plc

(“PetroNeft” or the “Company”)

Operations Update

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.


· Arbuzovskoye well 101 successfully drilled and completion underway

· Initial results positive with similar reservoir properties to prior discovery well

· Arbuzovskoye well 102 drilling ahead

· Group production remains stable at 2,000 bopd

Licence 61 - Arbuzovskoye Pilot Development Programme

Arbuzovskoye well 101, the first of ten planned new production wells on the Arbuzovskoye oil field, has been successfully drilled. Well completion is now underway utilising a workover rig and we expect to bring the well into production around the end of this month. The production drilling rig has been moved and has started drilling well 102.

Well 101 penetrated the J1-1 reservoir essentially as prognosed at -2,463.2 metres tvd. Core and log data indicate that the reservoir is substantially identical to the good quality reservoir in the Arbuzovskaya No. 1 discovery well. The reservoir is made up of coarse grained sandstone at the top and grades to fine grained sandstone to siltstone at the base - these types of sandstones are excellent reservoirs as demonstrated by the Arbuzovskaya No. 1 where production is currently steady at approximately 300 bopd. The gross reservoir thickness is about 8 metres with about 4.2 metres of net pay.

Arbuzovskoye contains 2P reserves in excess of 13 million barrels of oil according to independent reserve auditors Ryder Scott and is the Company’s second production development.

Licence 61 - Production

Total oil production, comprising both the Lineynoye and Arbuzovskoye oil fields, remains stable at about 2,000 bopd prior to the addition of production from the Arbuzovskoye No. 101 well.

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

“We are delighted to have confirmed excellent continuity of the J1-1 reservoir from Arbuzovskaya No. 1 to well 101, the first new production well location. We look forward to bringing this well into production and to providing shareholders with regular updates on additional Arbuzovskoye wells over the coming months as we increase our production profile and cashflows.”

For further information, contact:

Dennis Francis, CEO, PetroNeft Resources plc

+353 1 647 0280

Paul Dowling, CFO, PetroNeft Resources plc

+353 1 647 0280

John Frain/Brian Garrahy, Davy (NOMAD and Joint Broker)

+353 1 679 6363

Henry Fitzgerald-O’Connor, Canaccord Genuity Limited (Joint Broker)

+44 207 523 8000

Martin Jackson, Citigate Dewe Rogerson

+44 207 638 9571

Joe Murray/Ed Micheau, Murray Consultants

+353 1 498 0300

Qualified person

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 Note for Mining, Oil and Gas Companies issued by the London Stock Exchange in June 2009. 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. The technical disclosure in this announcement complies with the SPE/PRMS Standard.

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.


2P reserves

Proved and probable reserves according to SPE standards


Barrels of oil per day


True vertical depth