Operations update - Arbuzovskoye 102 well

October 11, 2012

11 October 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 102 successfully drilled and logged

· Initial results positive with similar reservoir properties to prior wells

· Confirms J1-1 reservoir in eastern portion of the field

· Group production remains stable above 2,200 bopd

Licence 61 - Arbuzovskoye Pilot Development Programme

Arbuzovskoye well 102, the second of ten planned new production wells on the Arbuzovskoye oil field, has been successfully drilled and logged. Production casing is currently being run and cemented in the well following which the main drilling rig will then be moved to start drilling the 109 well which is the next well in the drilling sequence. A workover rig will be used to do the 102 completion and bring the well into production.

Well 102 penetrated the J1-1 reservoir essentially as prognosed at -2,450.8 metres tvd. This is about 13 metres higher on the structure than the 101 well. Log data indicates that the reservoir is substantially identical to the good quality reservoir in the Arbuzovskaya No. 1 and 101 wells. The net pay is estimated to be 5.0 m.

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 above 2,200 bopd.

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

“We are delighted to have now confirmed the presence of the J1-1 reservoir in the eastern portion of the Arbuzovskoye field. Based on the log evaluation we believe this well to be similar to the other two wells on the field. We expect to bring the well into production within the next couple of weeks at which stage we will update shareholders again.”

For further information, contact:

Dennis Francis, CEO, PetroNeft Resources plc

+353 1 443 3720

Paul Dowling, CFO, PetroNeft Resources plc

+353 1 443 3720

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/Joe Heron, 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