News

PetroNeft is pleased to announce that it is in advanced discussions with Natlata Partners Limited (“Natlata”) in relation to a comprehensive agreement on Board and management composition. To allow time to finalise and implement the necessary agreements, both parties agreed to adjourn todays EGM, which had been requisitioned by Natlata, until 11 AM on Monday 25 April 2016. The re-convened EGM will be held at the same venue, the Herbert Park Hotel, Ballsbridge, Dublin 4, Ireland.

The ISS report supports the view of the Board set out in the EGM Circular dated 18 March 2016 that Shareholders should vote AGAINST ALL the resolutions.

PetroNeft (AIM: PTR) an oil & gas exploration and production company operating in the Tomsk Oblast, Russian Federation, and 50% owner and operator of Licences 61 and 67 is pleased to announce that the legal documentation for the first tranche of the proposed US$35m financing for Licence 61 to be provided by Oil India has now been executed. The first tranche relates to the 2016 funding requirement of US$10m. The funding is provided by way of an unsecured loan from Oil India to WorldAce Investments Limited, the joint venture company that ultimately owns Licence 61. Principal repayments will commence in Q4 2019.

PetroNeft (AIM: PTR) an oil & gas exploration and production company operating in the Tomsk Oblast, Russian Federation, and 50% owner and operator of Licences 61 and 67 is pleased announce that it has reached agreement with Oil India, its partner on license 61, for a budget and major work programme for 2016 and 2017.

As previously announced PetroNeft has received a notice requisitioning an Extraordinary General Meeting ("EGM") of the Company from Natlata Partners Limited ("Natlata"), a company registered under the laws of the British Virgin Islands. PetroNeft announces that it has posted a circular to its Shareholders to convene this EGM, which is to be held at 11.00 a.m. at the Herbert Park Hotel, Ballsbridge, Dublin 4, Ireland on Monday 18 April 2016.

PetroNeft received notification on 6 January 2016 that Dennis Francis acquired an additional 1,500,000 ordinary shares bringing his total holding to 25,890,416 (3.66%).

PetroNeft received notification on 30 December 2015 that Dennis Francis acquired an additional 630,000 ordinary shares bringing his total holding to 24,390,416 (3.45%).

Tungolskoye

• T-501 and T-505 horizontal wells drilled. Logs suggest both to have better quality oil pay than earlier wells. Workovers in progress to improve initial flow rates.

• T-509 vertical injector well drilled. Potential for oil production before conversion to be tested.

Arbuzovskoye

· Workover programme to increase production is planned for January 2016.

· Southern portion development progressing with well pad currently under construction.

· Significant field reserve upgrade anticipated based on new well and seismic data.

Sibkrayevskoye Reserves

· Oil in Place estimates upgraded based on new seismic data; 2P reserves expected to increase significantly.

Highlights

• Current gross production from Licence 61 is about 2,700 bopd.

o Represents a 46% increase in production in 2015.

• New wells drilled at Tungolskoye, Sibkrayevskoye, West Lineynoye and Arbuzovskoye during period.

Vakha Sobraliev, Non-Executive Director, has decided to retire from his position, effective from the conclusion of the AGM held earlier today, in order to concentrate on his other business interests.

Highlights

Tungolskoye

• T-502 horizontal well brought on line at sustained rate of over 450 bopd.

• T-503 horizontal well currently producing at around 400 bopd.

T-507 control well and water injector spudded on 25 August.

Highlights

West Lineynoye

• L-10 horizontal well brought online at a sustained rate of 230 bopd.

• L-10 result confirms short segment horizontal drilling greatly increases flow rates.

Tungolskoye

• T-503 horizontal well continues to produce at a sustained rate of over 500 bopd.

• T-502 horizontal segment drilling in progress.

• T-508 control well and water injector drilled in 17 days.

Production

• Current gross production from Licence 61 is about 2,600 bopd.

Represents a 41% increase in production thus far this year.

Tungolskoye

• T-503 horizontal well brought online at sustained rate of over 550 bopd.

• Latest test rate was 675 bopd.

Sibkrayevskoye

• Processing and interpretation of 1,000 km of high quality 2D seismic underway.

• Early indications suggest that the Sibkrayevskoye structure is larger than previously understood.

The Company's Annual Report and Accounts for the year ended 31 December 2014 and Notice of AGM has been posted to shareholders today.

2014 Highlights

· Licence 61 Farmout to Oil India Limited completed in July 2014.

· Total investment by Oil India will be up to US$85 million.

· Licence 61 Farmout has left the Company debt free and is funding a major well drilling campaign.

· Drilling recommenced in August 2014.

· Production 728,826 barrels of oil from Licence 61 in 2014.

Highlights

Sibkrayevskoye

• Sibkrayevskoye No. 373 appraisal well flows 100 bopd (stabilised, unstimulated natural flow) and confirms 11.5 m net oil pay. Flow rates with a pump would be considerably higher.

• Acquisition of 1,000 km of high quality 2D seismic completed.

Highlights

Tungolskoye

• Tungolskoye Development drilling contract awarded to Eurasia Drilling, one of the largest drilling companies in Russia

Arbuzovskoye

• Arbuzovskoye further wells now on production

Sibkrayevskoye

• Sibkrayevskoye No. 373 appraisal well has spudded, result expected in April 2015

Highlights

Tungolskoye

· Tungolskoye No. 5 well tested at over 600 bopd and is now in production

· Development of Tungolskoye to proceed immediately

o 11 well Tungolskoye campaign to commence in Q2 2015

o Tenders awarded for drilling and for the development of additional infrastructure at Tungolskoye

Arbuzovskoye & Sibkrayevskoye

· Arbuzovskoye 103 well now in production at a stabilised average rate of 125 bopd and confirms southern lobe of field

· Arbuzovskoye 104 well drilled with 5.4 metres of net pay, expected on production shortly

· Arbuzovskoye 107 well has been spudded