AGM Statement

Petrel Resources PLC
26 July 2006


Petrel Resources plc


Highlights of statement made by David Horgan, Managing Director Petrel
Resources, at the AGM Wednesday 26th July 2006


We remain focused on our long-standing objective of building an Iraq-centred oil
and gas independent.


The Subba & Luhais project is on track.  So far there have been no insuperable
security problems.  Suppliers continue to give strong support.  Staff morale and
commitment are excellent.  International groups are interested in partnering
with Petrel.


Rising tensions in the Middle East have created problems - but they are
difficulties we prepared for and are better positioned for than are other
western companies.  We expected recent events and anticipate further challenges.


The commitment of industry players to Iraqi oil development has been tested.
Most have folded.  We continue to expand and deepen our involvement.  What
others  see as difficulty, we see as opportunity.


Events have driven the oil price to historic highs - increasing the potential
value of our investment.'


Iraqi oil field development contract

Petrel's priority is the $197 million Subba & Luhais oil field development
services contract in southern Iraq.  This is the biggest contract awarded by the
Iraqi Ministry of Oil since 2003.


The project is on track and on budget:

1.  Engineering Design is underway - 75% of the Basic Design Package is complete
    - we expect a final review in late August, triggering a second milestone
    payment.

2.  Our design focus is now switching to technical data for major equipment
    orders.  We are finalising a key order representing about 20% of the 
    material supply budget.

3.  We will shortly survey field and pipeline routes.  This will enable us to
    finalise steel pipe quantities and secure payment for an additional 20% of 
    the materials supply budget.

4.  The Joint Venture with our Iraqi partner is running well: all bonds are in
    place.  We have agreed processing site layouts.

5.  We have established excellent relations with the Trade Bank of Iraq.  Funds
    drawdown has started.  TBI confirmed they will issue Letters of Credit - 
    subject to finalising terms.  This augurs well for future business.


Iraqi oil exploration

Petrel signed a Technical Cooperation Agreement on the Merjan oil field, in
central Iraq, with the Ministry of Oil in October 2005.  The Merjan oil field
was discovered in 1983, but has not yet been brought into production because of
extraneous circumstances, including OPEC ceilings.


The work programme formally kicked-off in May 2006.  Petrel has now received the
data package and our technical staff and contractors have processed the seismic
data.  It is now being reinterpreted.  We hope to complete the study by end
year.


Hydrocarbon Law review

A fully sovereign government has taken office following successful elections
with a high participation rate.  A priority is to review the Hydrocarbon Law,
establishing the basis for foreign participation in Iraqi oil & gas.  Policy for
downstream investment has been agreed, subject to parliamentary approval.  The
Iraqi Minister has stated his desire to establish a legal framework for upstream
investments by end 2006.


Petrel is well placed to seize the opportunities which will open up.


Motions

The meeting approved all motions.


This statement has been reviewed by Dr. David Naylor Geologist / Exploration &
Development Manager.


Contacts:

David Horgan                                                  [phone]
John Teeling                                                  [phone]

Bell Pottinger Corporate & Financial

Nick Lambert                                                  [phone]

Rowan Dartington

Barrie Newton                                                 [phone]


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