Final Results

Petrel Resources PLC
22 June 2005



                              Petrel Resources plc

Petrel, the AIM listed oil explorer and developer focused on Iraq announces
                   results for year ended 31st December 2004



       Highlights of the Chairman's Statement accompanying the results:





•        Petrel maintains an ongoing presence in Baghdad.

•        A fourth oil field development tender for the Kormor field, submitted
         in April 2005.

•        Technical clarification completed on the Subba and Luhais tender
         submitted in 2004.  We await a decision.

•        Continued development of our exploration model for Block 6 in the
         Western Desert of Iraq.

•        Positive indicators from an initial study of the East Safawi Block in
         Jordan, close to the Iraq border.

•        Fundraising of £1 million at 43p a share in March 2005.






Chairman's Statement



Petrel is a company with a specific objective of becoming an Iraqi oil producer.
We have had a presence in Baghdad for years and have negotiated with the Iraqi
Oil Ministry on both exploration and development contracts. Despite the
uncertainties and difficulties in Iraq we have continued to make progress on
both our exploration proposal, Block 6 in the Western Desert, and on our tenders
to develop oil fields. Three tenders were submitted in 2004 and the latest one,
Kormor, was submitted in April 2005.  Shareholders will understand that much of
what we do in the current circumstances must remain confidential.



I can understand that in a period of $50 a barrel oil with proposals submitted
to develop very large oil deposits that investors want quick action. We, as a
board, have said very little about our ongoing activities in Iraq. This is a
deliberate strategy as any statements could compromise our hard earned position
in the country.  Indeed uninformed media speculation in the latter half of 2004
upset officials in Baghdad. Oil in Iraq is a matter of the highest priority for
the country. Decisions on oil development proposals can only and should only be
announced by the government. All announcements will come from an official
source.



In this context, I can state that in the past year Petrel has received no
official announcements relating to either their oil field development proposals
or to the exploration proposals for Block 6 in the desert West of Baghdad. Let
me try to explain. Petrel deals with the Oil Ministry in Baghdad. This
organisation has numerous subsidiaries which cover activities such as
exploration, drilling, marketing and developments as well as a number of
production entities. All negotiations take place between Petrel and the relevant
subsidiaries. The three 2004 development tenders were submitted to the State
Company for Oil Projects (SCOP). The Block 6 exploration proposal was negotiated
with The Oil Exploration Company.



Once the Oil Ministry finalised negotiations on the three oil field development
tenders they made recommendations to the government which in turn passed the
recommendations to the oil committee of the cabinet. Decisions made in this
committee are approved or not by the cabinet and the government.  An official
announcement will then be made by a government office.



The status of our three development proposals remain unclear. We tendered for
Khurmala in the north, Hamrin in the centre and Subba / Luhais in the south.
Each of our three submissions faced critical technical and commercial evalutions
by teams of experts from the Oil Ministry. We passed all evaluations.



In late 2004 media reports indicated that Khurmala had been awarded to an Arab /
Turkish group. In Spring 2005 it was reported that Hamrin had been awarded to an
Arab / Canadian group. The tender prices reported in the media, if true, were
substantially below our bids on these projects. To this day we have not received
official notification and we are not aware that field work has started.
Political uncertainty continued right through 2004 and it is only in recent
weeks, after the 2005 elections, that a stable government has come into power.



The third tender, to develop the Subba and Luhais fields, is the one Petrel
knows best. In 2000 we first submitted a tender to develop the fields. This
tender was updated and refined for the 2004 submission. We are confident that
our technical and commercial specifications are as good as those of other
interested parties.



We continue to be encouraged by the Oil Ministry to submit tenders for new
projects. In April 2005, we submitted a multi volume tender to develop the
Kormor field in Kirkuk.



While awaiting decisions on our tenders we have been active in refining our
knowledge and understanding of Block 6 - the 10,000 sq km exploration block in
the Western Desert. We have identified very large structures on the block which
need to be drilled. We are ready to commence geochemical and seismic programmes
once the go ahead is given.



Where we have made real progress is in Jordan. Our initial interest in the
Jordanian acreage was to improve our knowledge of the Western Desert but the
more we looked at the data the more prospective the project became. We now
believe that there are drillable plays on the block. Petrel holds a Memorandum
of Understanding on an area covering 8,750 sq kms west of the Risha gas field.
We are completing structural studies as well as re-interpreting 4,350 km of
seismic.  It is likely that the concession will be upgraded to an Exploration
and Production Sharing agreement.



Finance



In March 2005 we raised just over £1 million at 43p a share to fund our ongoing
activities in Iraq and now Jordan. This funding covers our immediate needs as
well as financing the preparation of additional Iraqi tenders.



Staffing



On your behalf I want to extend thanks and praise to our staff. For years now we
have had a presence in Baghdad. When it became too dangerous to work in our
office our people worked from home. We are one of the very few organisations
which has continued to operate in Baghdad.



Our non Iraqi staff also deserve praise. Our Managing Director, David Horgan, is
a frequent visitor to Baghdad and is ready to go again when the call comes. The
staff who carry the tender documents from Amman, Jordan to Baghdad are thanked.



We are blessed with a group of experienced oil men who share our vision and who
are not only prepared to put in long hours compensated by shares but are, when
required, prepared to take physical risks.



Future



Our future lies in the Middle East. Iraq will play a central role in the growth
of an oil supply desperately needed to fuel the world economic machine. The new
Iraq is having a difficult birth but progress is being made. There is now a
government and the rule of law is returning at least to certain parts of the
country. A stable prosperous future for Iraq mandates the development of their
vast oil resources.



Petrel, by maintaining a presence in Iraq, by continuing to submit tenders and
through ongoing work on the exploration potential of Block 6 is showing our
commitment to the country. Every passing year tightens the oil supply / demand
balance making development of Iraqi oil more critical for world consumers. We
remain confident that we will have a role to play in this development.



Contacts:



David Horgan            + 353 87 292 3500
John Teeling              + 353 1 8332833



Bell Pottinger Corporate & Financial
Nick Lambert         [phone]



Rowan Dartingon
Barrie Newton         [phone]






Consolidated Profit and Loss Account

for the year ended 31 December 2004
                                                                                              2004                2003
                                                                                                 €                   €

Administrative expenses                                                                  (358,916)           (244,638)

LOSS ON ORDINARY ACTIVITIES BEFORE INTEREST                                              (358,916)           (244,638)

Interest income                                                                              8,621                 573

LOSS FOR THE YEAR BEFORE TAXATION                                                        (350,295)           (244,065)

Taxation                                                                                         -                   -

LOSS FOR THE YEAR AFTER TAXATION                                                         (350,295)           (244,065)

Profit and loss account : opening - (deficit)                                          (2,100,489)         (1,856,424)

Profit and loss account : closing - (deficit)                                          (2,450,784)         (2,100,489)

Loss per share - basic                                                                     (0.60c)             (0.48c)

Loss per share - fully diluted                                                             (0.60c)             (0.48c)



All gains and losses are dealt with through the profit and loss account. Results
derive from continuing operations.



The financial statements were approved by the Board of Directors on 21st June
2005 and signed on its behalf by:



John Teeling &
David Horgan
DIRECTORS




Consolidated Balance Sheet

at 31 December 2004
                                                                                             Group                Group
                                                                                              2004                 2003
                                                                                                 €                    €

FIXED ASSETS
Tangible assets                                                                                596                3,011
Intangible assets                                                                        2,218,409            1,373,863
                                                                                         2,219,005            1,376,874

CURRENT ASSETS
Debtors                                                                                    142,907               50,281
Cash at bank                                                                                 3,182              958,308
                                                                                           146,089            1,008,589

CREDITORS: (Amounts falling due within one year)                                         (256,959)            (183,140)

NET CURRENT (LIABILITIES)/ASSETS                                                         (110,870)              825,449

TOTAL ASSETS LESS CURRENT LIABILITIES                                                    2,108,135            2,202,323

CAPITAL AND RESERVES

Called-up share capital                                                                    746,565              727,690
Capital conversion reserve fund                                                              7,694                7,694
Share premium                                                                            3,804,660            3,567,428
Profit and loss account - (deficit)                                                    (2,450,784)          (2,100,489)

EQUITY SHAREHOLDERS' FUNDS                                                               2,108,135            2,202,323



The financial statements were approved by the Board of Directors on 21st June
2005 and signed on its behalf by:



John Teeling &
David Horgan
DIRECTORS






Consolidated Cash Flow Statement

at 31 December 2004
                                                                                                2004               2003
                                                                                                   €                  €
NET CASH OUTFLOW FROM OPERATING ACTIVITIES                                                  (380,803)           (68,811)
RETURNS ON INVESTMENT AND SERVICING OF FINANCE
Interest received                                                                              8,621                573

NET CASH INFLOW FROM RETURNS ON INVESTMENTS AND SERVICING OF FINANCE                           8,621                573

TAXATION
Corporation tax paid                                                                               -                  -

CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT
Payments to acquire intangible fixed assets                                                (844,546)          (292,778)
Payment to acquire tangible fixed asset                                                            -                  -

NET CASH OUTFLOW BEFORE FINANCING                                                        (1,216,728)          (361,018)

FINANCING
Issue of ordinary share capital                                                              261,086          1,390,263
Share issue expenses                                                                         (4,979)           (77,584)

NET CASH INFLOW FROM FINANCING                                                               256,107          1,312,679

(DECREASE)/INCREASE IN CASH                                                                (960,621)            951,663







Notes:



The financial information set out above does not constitute the Company's
financial statements for the years ended 31 December 2004 or 2003.  The
financial information for 2003 is derived from the financial statements for 2003
which have been delivered to the Registrar of Companies.  The auditors have
reported on the 2003 statements; their report was unqualified and did not
contain a statement under section 237(2) or (3) of the Companies Act 1985.  The
financial statements for 2004 have been audited and will be delivered to the
Registrar of Companies following the Company's Annual General Meeting.  The
auditors have reported on the 2004 statements; their report was unqualified and
did not contain a statement under section 237(2) or (3) of the Companies Act
1985.



A copy of the Company's annual report and accounts for 2004 will be mailed to
shareholders shortly and will also be available for collection from the
Company's registered office.






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