Interim Results

Petrel Resources PLC
31 October 2000


CHAIRMAN'S STATEMENT

Petrel is focused on developing an Iraqi oil business.  This is a time of
unique opportunity for an oil junior committed to developing in Iraq.  All of
the world's major oil companies are interested in Iraq's potential, yet very
few are currently able to conduct business there.  Countries such as the UK
and the USA restrict or prohibit their companies from trading or investing in
Iraq. 

Petrel is an Irish company, and as such unaffected by the difficult
relationship between other Anglophone countries and Iraq. Subject only to
compliance with international law, Petrel is free to conduct any business in
the country.

As expected, the UN embargo has been substantially relaxed this year. Under
the UN administered Oil-for-Food programme there are now substantial funds
available for oil field development and repair.  Bureaucratic challenges
remain, but Petrel is confident of being able to advance its projects. 

We have three current projects.  In the area of oil field development we are
in active negotiations to rebuild and expand two dormant fields in southern
Iraq. We are the only English-speaking company prepared to develop Iraqi oil
fields immediately. 

A second area of activity is oil exploration.  We have completed a detailed
proposal to explore an attractive block in the desert west of Baghdad.  

Our trading division, which will develop exports to Iraq under the UN Oil for
Food programme, is up and running with it's own management now in place.  

During November teams of staff and consultants will be in Baghdad negotiating
on oil development, exploration and trade.  


Iraq

For some years your directors have studied the potential of Iraqi oil.  Until
recently there seemed no opening for junior companies.  Under normal
international relations, the Iraqis would have little need of foreign capital
at all.  However, the conflicts and embargoes since 1980 have starved Iraq of
income and investment.  

The oil industry has atrophied struggling to maintain a production of 3
million barrels daily, barely 80% of the 1980s quota. There has been little
maintenance and development due to an embargo on spare parts, instrumentation
and software. Production will continue to fall unless massive investment is
made. Iraq needs investors to bring technology, new ideas and capital.  

Iraq has a pivotal role to play in the future of world oil.  Current oil
production of 3 million barrels a day will grow over time to 9 or more million
barrels daily.  At this level of production, backed up by reserves of over 113
billion barrels in the explored areas, Iraq will be a vital cog in world
economic development.  Add to this the fact that much of Iraq is unexplored
and the potential becomes clear.

Petrel has presented a development plan for two existing oil fields to the
relevant authorities in Baghdad.  The plan calls for an initial refurbishment
of existing facilities, which would increase production up to 70,000 barrels
of oil per day followed by an investment programme resulting in a gradual
expansion to 170,000 barrels per day.  The specialist team, which produced the
feasibility study, is visiting Iraq during November to further the proposal.

The proposed plan for the exploration block was completed after an intensive
review of available data.  It outlines a three-year seismic and drilling
programme.  The commercial terms are under negotiation.

A new management team has been recruited to develop our trading arm.  The
company has obtained space at the Baghdad International Trade Fair taking
place in early November.  Acting as agent, Petrel will show a range of
consumer and oil related products, which may be supplied under the UN
supervised trading rules.

Establishing successful operations in a new country takes time.  When one adds
in the complications of embargoes, sanctions and travel restrictions, setting
up in Iraq is complex.  The prize is worth the effort.


AIM Listing

A highlight in recent months was the AIM listing in August.  Not only does
this market offer greater potential to attract institutional investors it also
provides greater liquidity.  In fact we have seen days where trading is in
excess of 1 million shares.  Since our listing in August we have added more
than 400 new shareholders to our existing base of 600.  


Finance

We are investing significant sums of money on our Iraqi quest.  We raised
£750,000 sterling in mid 2000 by selling our Ugandan oil prospect for £450,000
in tandem with an institutional placing which raised a further £300,000.  This
money is adequate to fund operations.


Future

Iraq should be a first world country with an important economic role to play
on a world stage.  Sanctions have reduced the country to third world status
where medicines, foods and other basic requirements are not available to most
people. Sanctions are now counter-productive and are not sustainable in the
medium term as the world needs Iraqi oil.  Ironically the current high oil
price is partially caused by the difficulty of developing Iraqi oil.  As a
result, advanced countries pay more for energy while in developing countries,
severe hardship results.

The recent relaxation of sanctions is welcome.  When they are eliminated, as
they will be, Petrel hopes to be in the forefront of international companies
helping to rebuild both Iraq and its oil industry.


John J Teeling
31 October 2000


FINANCIAL INFORMATION
(unaudited)      
                                                          Six months ended
                                                        30.06.00    30.06.00
                                                        IR £'000    IR £'000
Group Profit and Loss                     
Operating Loss                                               (77)        (41)
Investment Income                                              1           2
                                                             ---         ---
Loss before Taxation                                         (76)        (39)
Taxation                                                       -           -
                                                             ---         ---
Loss  for the period                                         (76)        (39)
                                                             ===         ===
Loss per share                                              (0.2p)      (0.1p)
                                                             ===         ===
                     
                                                        30.06.00    30.06.99
                                                        IR £'000    IR £'000
Group Balance Sheet                     
Fixed Assets                                                 307         237
Current Assets less current liabilities                     (127)         86
                                                             ---         ---
                                                             180         323
                                                             ===         ===
Share Capital and Reserves                                   180         323
                                                             ===         ===

Copies of this announcement will be sent to shareholders and will be available
for inspection at the Company's registered office at 162 Clontarf Road, Dublin
3, Ireland.