Interim Results

Petrel Resources PLC
27 September 2006



                              Petrel Resources plc

            Interim Results for the six month period to 30 June 2006





Since Petrel first entered Iraq in 1999, our strategy has been simple - to
develop an upstream presence in one of the great oil provinces of the world.
Today that strategy is unaltered.



During a period when reports from the Middle East are almost universally
negative, Petrel has continued to make progress.  We carry on early stage work
on the Subba and Luhais oil field development, we commenced a technical
cooperation agreement with the Iraqi Oil Ministry to evaluate the Merjan oil
field in West Central Iraq, we continued discussions with the authorities on the
status of Block 6 in the Western desert and we agreed terms of a Production
Sharing Agreement with the Jordanian authorities on the East Safawi hydrocarbon
block near the Iraqi border.  On the corporate side, we signed a cooperation
agreement with Itochu of Japan, while our joint venture with the Makman Group in
Iraq, first announced in December 2005, is developing well.



Passing a new hydrocarbon law will be a major step for Iraq toward the
development of their world class discoveries.  News on this front is positive
with ministerial statements that the new law will be approved by the end of
2006.



Oil Field Development Contract: Subba and Luhais

Petrel is developing the Subba and Luhais oil fields in southern Iraq in
partnership with the Iraqi Makman Group as part of an Engineering, Procurement
and Supervision of Construction (EPC) Contract awarded by the Iraqi Ministry of
Oil. Work is proceeding as planned.  No insurmountable security challenges have
been encountered.



The Basic Design Package for the facilities is now being submitted and reviewed
by the Iraqi Ministry of Oil's Project Company (SCOP).  We anticipate their
formal acceptance of the Basic Design shortly, which triggers our corresponding
receipt of the second milestone payment from SCOP.  This will enable us to
commence the more extensive Detailed Design for the whole project with our
Contractor, Enereco in Italy.



Overall progress for the project is on schedule.  We are now entering into the
procurement phase of the project with the assistance of our joint venture
partner Makman.  They have procured and supplied similar equipment for the
Khurmala and Hamrin Projects in Iraq.



We have also secured delivery of the 18 compressor units from GE/Thermodyne
(France). Manufacturing has now commenced with phased deliveries to start in the
3rd Qtr of 2007.  This is a major value order and a significant event in the
project as the deliveries will also provide the Iraqi Ministry of Oil with the
capability to commence early gas export from the Luhais Plant.



We are now focusing on securing deliveries for the pipelines.  Discussions are
ongoing with international suppliers both in Europe and Japan.  A survey team is
shortly to be mobilised to carry out the work necessary for the plant processing
locations, power and communication routings, and the pipeline rights of way.



We are also developing our relationship with the Trade Bank of Iraq (TBI) and a
major international bank for opening of the necessary bank accounts and to
secure and issue the necessary project letters of credit.  These relationships
have provided security for our receipts from SCOP and for issuing of letters of
credit to the suppliers for the plant equipment.



The project is going well and our offices in Europe, Turkey & Iraq are all
mobilised and active.  The project provides us with valuable experience working
with the Iraqi Ministry of Oil for the development of large scale oil and gas
processing plant and export systems.  The knowledge gained will be fully
utilised and applied in our future work in Iraq.



Oil Exploration: Merjan Oil Field

A Technical Cooperation Agreement with the Iraqi Ministry of Oil on the Merjan
oilfield in west-central Iraq formally began in May 2006.  The project is
proceeding on schedule and is due to be completed by the end of 2006.  The
available seismic data has been re-processed and interpretation is well
advanced. Petrophysical studies and reservoir analysis have been initiated.  The
Merjan-1 well was drilled in 1983 and discovered oil in the Upper Cretaceous
Hartha Formation, with circa 760 million barrels of oil in place.  The field was
not developed in the intervening period because of political factors.



In tandem with the Technical Cooperation Agreement, Petrel and its contractors
are working closely with the Iraqi Ministry of Oil on specialised technical
training efforts, especially in geophysics and geology.



Jordanian Exploration: East Safawi Block

Petrel has agreed PSA terms with the Natural Resources Authority of the
Jordanian Government on the East Safawi Block, close to the Iraqi border.  The
ratification process is underway and the Jordanian Parliament is expected to
consider the proposed PSA over the coming months.



ITOCHU Partnership

Petrel Resources has a strategic partnership and cooperation agreement with
ITOCHU Corporation of Japan ('ITOCHU').  The strategic partnership will cover
future exploration and development activities in the Iraqi oil and gas industry.
  We have worked with ITOCHU over several years.  ITOCHU with its strong balance
sheet and long-term perspective, is a strong player in upstream oil and gas
business.  The strategic partnership will expand and deepen our operational
capabilities.  There is no better partner for us in our quest to expand and
deepen our Iraqi activities.



ITOCHU launched its upstream activities in Indonesia and Sakhalin Island in the
1970s and has been a successful player in the upstream energy sector.  It is
currently active in Algeria, Azerbaijan, as well as oil producing regions in the
North Sea and Western Australia.  In addition to the above-mentioned upstream
activities, the ITOCHU group is also one of the largest traders of crude oil in
the Far East.  It is a major force in numerous business sectors, including steel
pipe supply, finance and logistics



The cooperation agreement between Petrel and ITOCHU will initially cover work on
the Merjan oil field.  ITOCHU will also have a first look at future Petrel
projects in the Iraqi oil and gas upstream sector.  ITOCHU will contribute
towards Petrel's historic costs in the Iraqi oil and gas sector and will cover a
fixed share of the costs of the current study.



This joint venture is a good fit for Petrel in Iraq.  Itochu is financially
strong and has capabilities in multiple business sectors, and will contribute to
our quest to expand and deepen our Iraqi interests.



Next steps

The elected, sovereign Iraqi government is finalising a hydrocarbon law which
will cover upstream as well as downstream investments.  The structure for
exploration and development is expected to be the industry's preferred '
Production Sharing Agreement'.  This will open some of the world's largest and
most attractive oil fields and exploration areas to those international
companies prepared to work on the ground in Iraq.



We have shown our ability to operate in Iraq in the last seven years, our
commitment is long term and I believe that we are well placed to play a part in
the development of the Iraqi oil industry.





John Teeling

Chairman



27th September 2006



For further information please contact:
Petrel Resources  Plc

David Horgan                                         + 353 87 292 3500
John Teeling                                         [phone]
Corporate Synergy

Ian Rice                                             [phone]
Craig Howie                                          [phone]



www.petrelresources.com





                                       Petrel Resources PLC

                                 Financial Information (Unaudited)

                                                                             Six Months Ended
                                                                      30.06.06            30.06.05
                                                                         €'000               €'000
Group Profit and Loss
Operating Loss                                                           (227)                (245)
Investment Income                                                           19                    1

Loss before Taxation                                                     (208)                (244)
Taxation                                                                     -                    -

Loss for the period                                                      (208)                (244)

Loss per share                                                          (.31c)               (.40c)


                                                                      30.06.06             30.06.05
                                                                         €'000                €'000
Group Balance Sheet
Fixed Assets                                                             4,169                2,597

Current Assets
Contract Work in Progress                                                1,716                    -
Debtors                                                                     28                   83
Bank                                                                     9,378                  712
                                                                        11,122                  795
Current Liabilities
Contract Advance Payment                                               (7,568)                    -
Creditors                                                                (171)                (219)
                                                                       (7,739)                (219)


Current Assets less Current Liabilities                                  3,383                  576

                                                                         7,552                3,173

Share Capital and Reserves                                               7,552                3,173


                                                                           Six Months Ended
                                                                      30.06.06            30.06.05
                                                                         €'000               €'000
Group Cash Flow
Net Cash Inflow from Operating Activities                                5,143                (223)
Returns on Investments and Servicing of Finance                             19                    1
Capital Expenditure                                                      (305)                (378)
Financing - Issue of Ordinary Share Capital                                792                1,309

Increase in Cash                                                         5,649                  709





Notes:


1.  The figures for the six months to 30 June 2006 and 30 June 2005 are
unaudited.  The financial information set out above does not constitute full
statutory accounts within the meaning of section 240 of the Companies Act 1985.

2.  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.




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