PTR.L Regulatory News (PTR)

PetroNeft Resources plc

("PetroNeft" or the "Company")

Operations Update

Positive result from first three production wells, pipeline complete and awaiting final testing

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.

Highlights:

·; First three production wells successfully drilled

·; Pipeline construction complete, testing imminent

·; Construction of production facilities on schedule

·; Arbuzovskaya exploration well site preparations nearing completion

Development Drilling

Drilling of the first three of nine production wells at the Lineynoye oil field planned for 2010 have now been completed ahead of schedule. Preliminary log and survey data indicate that the results of these wells are in line with expectations:

The wells penetrated the top of the reservoir 5 to 8 metres higher than prognosis. The field wide oil-down-to in the reservoir is at 2,430 metres true vertical depth which is well below the oil-down-to in any of the production wells drilled thus far. This relationship will help the future production performance of the wells.

Production casing has been run in the wells and successfully cemented. The drilling rig has been moved along its rails and the fourth well, No. 113, has been spudded. A work-over rig has begun the process of perforating and installing electrical submersible pumps in wells 109, 110 and 112. Well No. 111 will be the final well drilled in the 2010 programme as an operational decision was made to re-order the drilling of wells.

Pipeline Construction

Construction of the 60km export pipeline from the Lineynoye field to the Kiev-Eganskoye field is complete. The pressure and hydro testing of the pipeline will commence later this month following which the pipeline will be ready to receive first oil production on schedule in the third quarter of 2010.

Production Facilities

Construction of production facilities continues and is on schedule to be completed for first oil production in the third quarter of 2010.

Arbuzovskaya Exploration Well

Rig-up operations for the Arbuzovskaya exploration well are over 80% complete and drilling is scheduled to commence in October after the nine well production drilling programme has been completed. This is the first of at least three exploration/delineation wells to be drilled in the northern part of Licence 61 in 2010 and 2011. This programme has the potential to materially increase both Group reserves and the long term production potential of Licence 61.

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

"The drilling of our production wells remains ahead of schedule and we are delighted with the well results to date. Pipeline testing is due to commence in the coming weeks and construction of production facilities continues at pace. We look forward to achieving first production in the third quarter and our year-end production target of 4,000 bopd"

For further information, contact:

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 Guidance Note for Mining, Oil and Gas Companies issued by the London Stock Exchange in March 2006. 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.

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.

Notes to Editors

PetroNeft Resources plc was established in 2005 to develop oil and gas assets in Russia and the Former Soviet Union and was admitted to the London AIM and Dublin IEX Markets on 27th September 2006.

The main asset of the Company is a 100% interest in Licence 61, a 4,991 sq km oil and gas licence in the Tomsk Oblast in Russia, held through its wholly owned Russian subsidiary, Stimul-T. The Licence is located in the prolific Western Siberian Oil and Gas Basin and contains four known oil fields, Lineynoye, Tungolskoye, West Lineynoye and Kondrashevskoye, and over 25 exploration Prospects and Leads. In December 2009 the Company announced the acquisition of a second oil and gas licence in the Tomsk Oblast in Russia, Licence 67.

The Board and Management of PetroNeft is made up of highly experienced professionals, including former Marathon Oil Company executives, in the International and Russian Oil Exploration and Development business. The Russian Management team also has extensive local knowledge and experience in the exploration and development of oil and gas fields in the Tomsk Oblast.

Since acquiring Licence 61 in May 2005, the Company has carried out extensive reprocessing and reinterpretation, using modern technology, of over 2,500 line kms of vintage seismic acquired in Soviet times. It has also digitised and reinterpreted the logs of 14 wells drilled on the Licence since 1972. PetroNeft also has acquired over 1,000 line kms of new CDP-2D infill seismic and drilled six new exploration/delineation wells. This new seismic and six well drilling programme fully satisfied the exploration work obligation for the full 25 year licence term.

Reserve estimates on Licence 61 prepared by Ryder Scott as of 1 January 2010 were:

PetroNeft has also recently announced a crude oil transportation agreement with Nord Imperial, effective for 25 years, which significantly reduces the various permits and associated approvals required for pipeline construction as well as the costs. The new route, from Lineynoye to Kiev-Eganskoye runs adjacent to the Tungolskoye and Kondrashevskoye oil fields and will create useful synergies for future development phases.

On 21 September 2009 PetroNeft announced a US$27 million fund raising from international institutional investors which fully funds the Phase 1 Development Plan for the Lineynoye and West Lineynoye Fields. PetroNeft expects to have year-round production from the Licence in the third quarter of 2010 with production of 4,000 bopd by the end of 2010. Production from the Phase 1 project is expected to peak at around 12,000 bopd in 2012.

On 28 May 2010, PetroNeft announced a US$30 million debt facility with Macquarie Bank.