Petrel Resources Regulatory News (PET)

26 September 2012

Petrel Resources plc ("Petrel" or the "Company")

Interim Statement for the period ended 30 June 2012

Petrel Resources, the AIM-listed, Irish hydrocarbon exploration company with activities in Iraq, Ghana and Offshore Ireland, today announces its interim results for the six months ending 30 June 2012.

Operational Highlights:

·; New management team appointed in Iraq. They have clarified Petrel's relationship with the authorities and are pursuing existing and new opportunities.

·; The Ghanaian authorities have been provided with evidence of Petrel's financial and technical ability to conduct the required work programme on Tano 2A Block.

·; Exploration in Ghana, elsewhere in Africa and in South America, has confirmed the value of the Tano Basin acreage.

·; New exploration data support Petrel's view that the extensive oil shows and seeps on the Tano shoreline are sourced from the prolific Cenomanian-Turonian source sequences of the deeper Tano Basin.

·; Petrel is progressing it's Irish Offshore Option Blocks in the northern and eastern sections of Porcupine Basin. Several new targets have been identified.

Chairman, John Teeling said, "Petrel is well financed for all current needs with over US$4m cash. The board is committed to our activities in Iraq and Ghana offers significant upside to the company. The Irish offshore, where Petrel began in the early 1980's has once again become an attractive target. We have a strong expert team, we have good ground and we hope to interest multinational parties to explore with us. The mix of projects, all high risk, offers significant potential."

Enquiries:

Interim Statement

Iraq

Petrel has had a presence in Iraq since 1999. In 2002 an agreement was reached with the Oil Ministry in Baghdad on an exploration contract over 10,000 sq km in the Western Desert. In 2005 Petrel was awarded a contract to develop the surface facilities for a large oilfield development in the Subba and Luhais area. We were asked to take a local Kurdish partner, Makman, in a joint venture.

After protracted discussions Petrel exited the contract leaving Makman the sole operator.

Between 2009 and 2011 Petrel applied to be considered for new oil field licences being offered. We expected to qualify and did not. Following a review of our position in Iraq we appointed a new management team with the brief to clarify our standing in the country, in order to highlight our interest in the exploration ground and to seek out new opportunities. Though working only for a short time the team has made significant progress. The first objective was to clarify the position of Petrel with the national authorities in relation to existing and historic projects in which Petrel has or had an interest. This is done.

The second objective is to work with national and regional authorities in Iraq to identify projects in which Petrel can be involved. This work is ongoing.

Ghana

Ghana is a world hot spot for oil development. Petrel holds a significant interest in a licence agreement over a very prospective onshore/offshore block. The 1,532 km2 Tano 2A Block is held by Pan Andean Resources Ltd, a private Ghanaian company, owned 30% by Petrel, 60% by Clontarf Energy and 10% by local Ghanaian interests. A Petroleum Agreement was signed between the parties and the Ghana National Petroleum Company (GNPC) in March 2010. Parliamentary ratification is still awaited.

Tano onshore oil seepages have been recorded for a century. An initial concern was that these seepages might relate to a different source rock to that of the nearby discoveries. Petrel's technical team have long believed that both the oil seepages as well as most of the discovered oil originated in the same source rock, deep out to sea. Petrel and partners have completed all of the analysis possible on available data and are ready to explore.

Industry exploration data released during 2012 support Petrel's view that the extensive oil shows and seeps on the Tano shoreline are indeed sourced from the prolific Cenomanian-Turonian source sequences of the deeper Tano Basin, which also charged the Jubilee Field. The migration of this oil across the Tano shelf presents opportunities for traps within the shallow marine-onshore sections.

In recent months negotiations have continued between the parties and GNPC. To assist the ratification process substantial security has been offered to GNPC. This guarantees a significant portion of the agreed work programme.

Irish Offshore

In October 2011 the Irish Government awarded Petrel two packages of licensing options in the Atlantic Porcupine Basin.

The blocks, on the more accessible eastern margin of the basin, are Blocks 35/23, 35/24 and the western half of 35/25, and Blocks 45/6, 45/11 and 45/16. These cover about 1,400 km2, in the northern and eastern sections of the Porcupine Basin.

Historically, Porcupine Basin exploration concentrated on Jurassic targets resembling those of the northern North Sea province. Lack of success led to reduced interest, with no wells drilled in the basin over the last decade. Success in different categories of reservoirs elsewhere, as in the West African and South American offshore, forced a general re-think, and led to a resurgence of interest in similar potential targets in the Porcupine Basin.

In making its bid for acreage, Petrel had relied on its large archive of seismic data and reports, supported by the acquisition of a selection of additional seismic lines. This substantial database enabled extensive analysis to proceed quickly on a budget of one million euro over two years.

Since the award, Petrel purchased additional substantial coverage of seismic lines and has undertaken a re-interpretation of the full integrated data set across both sets of blocks. The data was carefully calibrated against the relevant well logs. Our technical and management team interpreted the extensive 2D seismic coverage of Blocks 35/23, 35/24 and part of 35/25, as well as of Blocks 45/6, 45/11 and 45/16. This phase of the project was completed in June 2012.

The second phase of interpretation detailed and appraised the potential prospects identified in the first phase. This included the acoustic inversion of selected seismic lines to assess the quality of the targeted reservoir sections. Additional seismic lines were purchased when crucial to the interpretation. This was completed in September 2012.

An additional seismic project detailed the depositional facies and character of the identified sand bodies. Our experts evaluated potential reservoir horizons, and will invert selected seismic lines.

A further study focused on the sedimentary provenance of the reservoir successions. This involved petrographic analysis, followed up with the application of the 'lead-in-feldspar' technique. This is important in the Porcupine Basin where sediment input can be along the axis of the basin or from the basin margins.

We have obtained 3D seismic coverage of the eastern portion of Petrel's blocks in quadrant 35, which is being processed and interpreted. 3D inversion of the data will give greater control on potential targets.

All the relevant well data in the region have now been acquired and a full petrophysical appraisal made of 17 wells. Following the upcoming inversion work, this will improve control of the seismic data and potential prospects.

To date encouraging prospects at the Lower Cretaceous and Tertiary levels have been identified with those in the north of quadrant 35 looking particularly promising.

Our objective is to develop targets that will attract large partners, to facilitate an early seismic campaign, followed by exploration wells.

Future

Petrel is well financed for all current needs with over US$4m cash. The board is committed to our activities in Iraq and we remain optimistic that the current team can reinvigorate operations. Ghana offers significant upside to the company. We are ready to begin the next phase of exploration and remain hopeful of ratification. We have a signed agreement with the state petroleum company. The Irish offshore, where Petrel began in the early 1980's has once again become an attractive target. We have a strong expert team, we have good ground and we hope to interest multinational parties to explore with us. The mix of projects, all high risk, offers significant upside.

John Teeling

Chairman

26 September 2012

www.petrelresources.com

Notes:

1. INFORMATION

The financial information for the six months ended June 30th, 2012 and the comparative amounts for the six months ended June 30th, 2011 are unaudited. The financial information above does not constitute full statutory accounts within the meaning of section 148 of the Companies Act 1963.

The Interim Financial Report has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the European Union. The accounting policies and methods of computation used in the preparation of the Interim Financial Report are consistent with those used in the Group 2011 Annual Report, which is available at www.petrelresources.com

The interim financial statements have not been audited or reviewed by the auditors of the Group pursuant to the Auditing Practices board guidance on Review of Interim Financial Information.

2. No dividend is proposed in respect of the period.

3. Comparative amounts have been re-classified, where necessary, on the same basis as the Group 2011 Annual Report.

4. LOSS PER SHARE

Basic and diluted loss per share are the same as the effect of the outstanding share options is anti-dilutive.

5. INTANGIBLE ASSETS

Exploration and evaluation assets at 30 June 2012 represent exploration and related expenditure in respect of projects in Ireland, Iraq and Ghana. The directors are aware that by its nature there is an inherent uncertainty in relation to the recoverability of amounts capitalised on the exploration projects. In addition, the current economic and political situation in Iraq is uncertain.

The realisation of these intangible assets is dependent on the successful development of economic reserves. Should this prove unsuccessful the value included in the balance sheet would be written off to the statement of comprehensive income.

The group's activities are subject to a number of significant potential risks including:

·; Foreign exchange risks;

·; Uncertainties over development and operational costs;

·; Political and legal risks, including arrangements for licenses, profit sharing and taxation;

·; Foreign investment risks including increases in taxes, royalties and renegotiation of contracts;

·; Liquidity risks;

·; Operations and environmental risks

·; Going Concern.

Directors' remuneration €75,000 of was capitalised as exploration and evaluation expenditure during the period.

Regional Analysis

6. The Interim Report for the six months to June 30th, 2012 was approved by the Directors on 25 September 2012.

7. Copies of the interim report will be sent to shareholders and will be available for inspection at the Companies Registered Office at 162 Clontarf Road, Dublin 3, Ireland. The Interim Report will also shortly be available for viewing on Petrel Resources plc's website at www.petrelresources.com