Matra Petroleum plc, the oil and gas E&P company focused on Central Europe and Russia announces the following operational update in Hungary and Russia:

Hungary

• Testing on Marcali-1 has been completed and the well has been suspended. The well encountered significant gas shows whilst drilling and gas was indicated on well logs, however the well produced water on test. It is concluded therefore that the well either encountered only residual gas or the well intersected the reservoir at or close to the gas-water contact. Further review of the results is ongoing.

• Although the Marcali-1 well may have not encountered the main reservoir section, the Direct Hydrocarbon Indicator (DHI) technology was effective. The 2007 3D seismic acquisition programme was designed specifically for this type of modelling and the resulting DHI's on the prospects to be drilled in the forthcoming programme exhibit improved clarity than seen in Marcali and they will represent lower risk, larger targets.

• As announced on 4th June 2007 Matra reduced its interest in the Inke Concession to 40% in return for a being funded through the 2007 exploration drilling programme, including the drilling of the Marcali-1 well.

Russia

• Drilling progress on Arkhangelovskoe -11 has improved and the well is currently at 1544m.

As announced on 5 February 2008 Arkhangelovskoe-12 has now been further flow tested and the pressure data analysed. The data has confirmed that near well bore formation damage increased substantially as a result of casing and cementing the well. It is also clear that this damaged zone has not been fully penetrated and is therefore restricting flow. Equipment to undertake a remedial acid treatment is expected to be mobilised within the next two weeks, subject to finalising the treatment design.

Carbonate reservoirs of this type are particularly prone to reservoir damage during drilling and cementation, but regional wells with similar properties have been successfully treated. Reservoir calculations indicate that successful removal of the damage and the future installation of a pump would provide for production rates potentially in excess of that seen in the initial open-hole test.

Peter Hind, Matra's Managing Director said:

"We need to review the Marcali-1 test details further before coming to a firm conclusion on the future of this well. In the meantime we are continuing to plan our 2008, two well, exploration drilling programme in Hungary.

In Russia, we expect to see a higher production rate once the remedial acid treatment on Arkhangelovskoe-12 is completed which will be further increased in due course by installation of a down-hole pump."

Matra has a 40% interest in the Inke wells and Concession. Horizon Hungarian Energy (HHE), a subsidiary of Aspect Holdings and a leading explorer in Hungary owns the remaining 60%. Matra owns a 100% interest in the Arkhangelovskoe License through its wholly owned Russian subsidiary.