PetroNeft Resources plc, owner and operator of Licences 61 and 67, Tomsk Oblast, Russian Federation, provides an update on its operations.

Highlights:

• First production well meets expectations • Pipeline construction substantially complete • Construction of production facilities on schedule • Winter phase mobilisation for Arbuzovskaya exploration well complete

Development Drilling Drilling of the first of 9 production wells at the Lineynoye oil field scheduled for 2010 has now been completed. Preliminary results of the log and survey data indicate that the results of this well are in line with expectations. The top of the reservoir section was penetrated at 2,391m vertical depth subsea. The J1 reservoir interval is completely saturated with oil. The gross hydrocarbon interval in the well is 14.2m and the preliminary log analysis shows net oil pay is between 10.2m and 11.8m. Production casing will be run in the well and cemented, following which the production drilling rig will be skidded to drill the second well. An electrical submersible pump will be installed in the well with a work-over rig later in the programme.

Pipeline Construction The 60km export pipeline from the Lineynoye field to the Kiev-Eganskoye field is progressing on schedule. All activities required to be completed during the winter construction season have been completed. These included the route clearance, field-welding of the pipeline, wrapping, trenching, laying the pipe and backfilling the trench for the entire 60km pipeline. Remaining activities include the connection of the pipeline to facilities at Lineynoye and Kiev-Eganskoye, which are not dependent on winter roads. The hydro test of the pipeline is scheduled for June 2010 following which the pipeline will be ready to receive first production in the third quarter of 2010.

Production Facilities Mobilisation of all the major equipment for the production facilities that were required to be moved to Lineynoye by winter roads has been completed. Construction of production facilities continues and is on schedule to be completed for first production in the third quarter of 2010.

Arbuzovskaya Exploration Well The drilling rig, camp and necessary materials to drill the Arbuzovskaya Exploration well have successfully been mobilised to location during the winter season. Rig-up operations are planned to commence by September 2010 and drilling will commence in October after the 2010 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.

Tags: PetroNeft Resources plc