Operational Update

Petroneft Resources PLC
20 December 2007



                            PetroNeft Resources plc

                   Pipeline Sharing Protocol of Intent Signed


PetroNeft Resources plc ('PetroNeft' or 'the Company'), is pleased to provide
this update on the progress of its operational activities on Licence 61, Tomsk
Oblast, Russian Federation.



Highlights


O       Pipeline Sharing Protocol of Intent Signed with Bashneft



O       Update on Tungolskoye No. 4 Sidetrack Test



Bashneft Pipeline Sharing Protocol of Intent Signed



PetroNeft is pleased to announce that it's subsidiary, Stimul-T  has signed a
protocol of intent  which defines the details of an infrastructure sharing
agreement with OAO ANK Bashneft, the operator of two Licences with producing
fields in the Khanty-Mansiysk Oblast located immediately northwest of
PetroNeft's Licence 61.



This agreement will enable PetroNeft to tie-in to the Bashneft pipeline at the
Lukpaiskaya pumping station under a simplified custody transfer scheme. The
Lukpaiskaya pumping station is located only 60 km from the Lineynoye and West
Lineynoye Oil Fields. The new route is over flat terrain and no longer requires
a major river crossing. Bashneft will then transport the crude to the
Aleksandrovskoye (Strezhevoi) custody transfer station where it will enter the
Transneft pipeline for export outside of Russia or for domestic sales.  The
tariff for this operation will be calculated based on actual costs in proportion
to the transferred amount, but will not exceed the Transneft tariff for a
similar pipeline segment.  The two companies will now determine the technical
aspects of the tie-in arrangements.



This infrastructure sharing agreement is a significant development for the
economic commercialisation of Licence 61.  When compared to the option of the
Company building a 156 km pipeline to the Raskino pumping station to the
southwest, it will result in significantly reduced pipeline capital expenditures
and long term operating expenditures. It is also expected to facilitate
commencing full scale production from Licence 61 in 2009.



An important outcome of the Bashneft agreement is that Licence 61 can now be
developed in phases from the north. The initial phase will consist of the
development of the Lineynoye and West Lineynoye fields along with a 60 km
pipeline to Bashneft and a simplified custody transfer point.  New fields
discovered to the south, including Tungolskoye, will then be developed
incrementally in order to optimise the overall economics for the Company.



Update on Tungolskoye No. 4 Sidetrack



The new access to the Bashneft pipeline system means that emphasis will now be
placed on assessing and developing the northern prospects on Licence 61.  Delays
in moving in the materials needed to complete the flow testing of the
Tungolskoye No. 4 sidetrack well have the potential to inordinately delay the
2007/2008 drilling on the West Korchegskaya Prospect. Therefore, the Company has
decided to commence the disassembly of the Tungolskoye No. 4 drilling rig now
and move it to the West Korchegskaya Prospect, on the planned drilling schedule.
The Tungolskoye No. 4 sidetrack test will now be concluded in February, using a
truck mounted work-over rig that will be mobilised when winter roads are in
place.



 Dennis Francis, Chief Executive Officer of PetroNeft commented:



'This protocol provides the basis for an excellent long term agreement that
significantly benefits both companies. PetroNeft achieves a significant up front
cost savings as well as a favourable long term tariff rate.



This agreement, with a much reduced and simplified pipeline route, should
greatly assist the Company in meeting its target pipeline production in 2009 as
planned.'



For further information, contact:



Dennis Francis, CEO, PetroNeft Resources plc (Houston)
[phone]

Paul Dowling, CFO, PetroNeft Resources plc (Dublin)
[phone]

Desmond Burke, Director Investor Relations, PetroNeft Resources plc (Ireland)
[phone]

John Frain / Brian Garrahy, Davy
[phone]
Damien Mauvais, Natixis Bleichroeder
[phone]



Nick Elwes/Paddy Blewer/Simon Whitehead, College Hill (UK)

[phone]



The information contained in this announcement has been reviewed and verified by
Mr. Dennis Francis, Director and Chief Executive Officer of PetroNeft, for the
purposes of the Guidance Note for Mining, Oil and Gas Companies issued by the
London Stock Exchange in March 2006.  Mr. Francis holds a B.S. Degree in
Geophysical Engineering and a M.S. Degree in Geology from the Colorado School of
Mines.  He has also graduated from the Harvard University Program for Management
Development.  He is a member of the American Association of Petroleum Geologists
and the Society of Exploration Geophysicists.  He has over 34 years experience
in oil and gas exploration and development.



Forward Looking Statements



This announcement contains forward-looking statements. These statements relate
to the Company's future prospects, developments and business strategies.
Forward-looking statements are identified by their use of terms and phrases such
as 'believe', 'could', 'envisage', 'potential' 'estimate', 'expect', 'may', '
will' or the negative of those, variations or comparable expressions, including
references to assumptions.



The forward-looking statements in this announcement are based on current
expectations and are subject to risks and uncertainties that could cause actual
results to differ materially from those expressed or implied by those
statements. These forward-looking statements speak only as at the date of this
announcement.



Glossary



'Bashneft' Joint Stock Petroleum Company - one of the oldest oil and gas
producing companies of Russia - has been in existence since 1932. It is a
powerful comprehensive business, providing the whole production cycle from field
exploration to sales of final products.  It currently has over 8,000 employees
and produces about 244,000 bopd with principal operations in Bashkortostan, a
semi-autonomous region.  The Company is controlled by the government of
Bashkortostan.


                      This information is provided by RNS
            The company news service from the London Stock Exchange