Petroceltic International, in association with its partners, issues an operational update on its activities in Algeria, Tunisia and Italy.

Algeria, Isarene Permit Petroceltic, 75% working interest ('WI') and 100% paying interest ('PI') and Operator, in conjunction with our partner Sonatrach, (25% WI), the National Oil and Gas Company of Algeria, completed the highly successful 2009/10 five well Isarene drilling and testing programme on 13th February 2010, having discovered a major new gas condensate discovery in the Ain Tsila gas condensate field. The programme also delivered two more modest discoveries with the successful INE-2 and INW-2 wells, complementing the Company's existing 2006 Hassi Tab Tab discovery. The drilling and testing teams have now been demobilised and the KCA-Deutag T212 rig is currently stacked at the INW-2 well location. The work programme was completed in 260 rig operating days, with 950,000 cumulative manhours in the field and no lost time incidents.

Petroceltic and Sonatrach expect to retain the following four discovered oil and gas fields into the next appraisal extension phase of the Isarene Permit; Ain Tsila, Isarene North East; Hassi TabTab, and Isarene North West.

A dedicated Petroceltic appraisal team has recently been established to integrate and synthesize the extensive data collected during the 2009 campaign. An appraisal work programme that will commence in Q4 2010 has been agreed with our partner Sonatrach. The appraisal programme will consist of at least two further wells on the Ain Tsila field and one well on the Isarene North East field. A formal request for a two year appraisal extension period, starting on 26th April 2010, in accordance with the Production Sharing Contract will shortly be submitted for approval to the Algerian Regulatory Authorities.

The main focus of the 2010/11 appraisal work on the Isarene permit will be to confirm the most likely recovery factors which apply to these in place hydrocarbon resources, and to optimise the development plans for these discoveries, and likely gas sales contracts. The Company expects to confirm the recoverable hydrocarbon reserves estimates associated with these discoveries after completion of the appraisal work programme.

Italy - the Elsa Discovery, Licence BR268. RG Petroceltic (70% WI and 100% PI for 1st well) assumed operatorship of the B.R268.RG (the Elsa Discovery) on 28th January 2010 following the acquisition of a 30% interest from Vega Oil S.p.A. ('Vega'), a wholly owned subsidiary of Cygam Energy Inc., increasing the Company's total interest in the Elsa discovery to 70%. Petroceltic now plans to appraise the Elsa discovery well by drilling and testing an Elsa-2 well adjacent to the existing discovery well, Elsa-1, in which a 65m oil column was logged in 1992. An environmental impact assessment for the Elsa-2 well was submitted to the Italian Ministry for the Environment in August 2009 and is currently expected to be approved in Q2 2010. Drilling operations are planned to commence in September 2010, subject to receiving all necessary regulatory approvals. Situated in 30m of water depth, some 7km offshore in the Central Adriatic region of Italy, the well will be drilled by a zero discharge jack-up rig using water-based fluids. Four suitable rigs with acceptable contract windows have been identified and Petroceltic has commenced discussions with these rig operators with a view to contracting a rig in the near future.

Petroceltic has completed the Elsa-2 well design and identified long lead items for procurement. A screening study has been completed with TRACS International Consultancy Ltd ('TRACS' a subsidiary of AGR Petroleum) to estimate gross contingent in-place and recoverable resources, as well as scoping economic analysis and sensitivities for an offshore development solution, including both fixed platform and floating development options. TRACS has been further commissioned to prepare a Competent Persons Report. This work is currently underway.

The Company may seek to share risk in the drilling of the Elsa appraisal well through a partial farm-out to industry partners or to a mezzanine finance investor.

Tunisia, Ksar Hadada Licence Petroceltic (27.03% WI and 0.0% PI during 2010 work programme) jointly with Independent Resources successfully farmed out the Ksar Hadada block in Tunisia in Q2, 2009 to a subsidiary of PetroAsian Energy Holdings Ltd, a company listed in Hong Kong. PetroAsian will finance all of the Company's work commitments in the current programme including new seismic acquisition and the drilling of two wells. Post-farm out Petroceltic retains a 27.03% interest and operatorship of the permit. In Q3 2009, the Company established a dedicated team in Tunis to provide operational support for the planned programme.

The Company acquired over 100km of new 2D seismic in Q4 2009, with processing and interpretation completed in January 2010. Following interpretation of the seismic, well locations for two Ordovician prospects were selected and approved by the partners in early February 2010. Contracts have now been placed for long lead items and a contract for drilling rig services has been entered into by Petroceltic with Compagnie Tunisienne de Forage ('CTF'), the drilling subsidiary of Entreprise Tunisienne d'Activités Pétrolières ('ETAP'), the National Oil Company of Tunisia, for the CTF Rig 06. Drilling is expected to commence in June 2010 and operations are expected to continue for an estimated 12 weeks.

Brian O'Cathain, Chief Executive of Petroceltic, commented,'Last year's highly successful exploration programme will be followed in 2010 by another exciting year of drilling activity. Significant wells are planned in each of the three countries where we operate. We expect this year's drilling programme to move our large hydrocarbon contingent resources towards bookable recoverable reserve status.

We are pleased to have delivered the 2009 work programme with an exemplary record in terms of health, safety and the environment, with no lost time or other significant incidents after almost one million manhours in the field. Our operational focus in these areas has enhanced our reputation with partners and Host Governments and positions us well for future growth. We are confident that our very exciting drilling programme for 2010 will add significant value for shareholders'

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