Operations update

18 December 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 at Licence 61.

Highlights:

· Arbuzovskoye well 111 successfully completed and put into production

· Initial oil flow rate of 150 bopd

· No water production associated with the well

· Well 112 currently drilling ahead targeting highest flow eastern side of field

· Total production running at 2,800 bopd with 3 producing wells off line for remedial work on pumps

Licence 61 - Arbuzovskoye Pilot Development Programme

Arbuzovskoye well 111, the fourth of ten planned new production wells on the Arbuzovskoye oil field, has been successfully completed and brought into production at an initial rate of 150 bopd with no visible water cut.

Arbuzovskoye well 112, the next well in the drilling sequence, is currently drilling ahead. This well is located on the eastern side of the field where, to date, we have experienced higher flow rates. Overall, the average production rate for the first four wells in the programme continues to exceed initial targets.

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 is currently 2,800 bopd up from 2,500 bopd in late November. The rate is reduced due to 3 wells at the Lineynoye oil field being currently off-line while remedial work is carried out on the down-hole pumps. The Company had expected these wells to be back online before the year end however the weather conditions at the field continue to be extremely cold (as low as -47⁰C) which has slowed the workover and completion process. They are expected to be back online by mid-January 2013.

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

“We are pleased with the initial flow rate on well 111 and the fact that there is no water production associated with the well. We continue to expand our understanding of the field and are now drilling well 112 on the eastern side of the field where we have seen the highest flow rates to date. The operational challenges and variation in results are as expected. We look forward to completing further wells in Arbuzovskoye over the coming months as we continue to focus on materially increasing our production profile and cash flows.”

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
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.

Glossary

2P reserves	Proved and probable reserves according to SPE standards
bopd	Barrels of oil per day