Operational update

Petroneft Resources PLC
05 March 2007



                            PetroNeft Resources plc


                               Operational Update


Highlights;


•       Drilling has commenced on the No. 6 delineation well in the Lineynoye
        Oil Field.


•       Preparations for drilling the Tungolskoye No. 4 delineation well are
        underway.


•       A third rig will be used for high impact exploration well, Lineynoye No.
        7, to ensure completion of 2006/07 Drilling Programme.


•       Seismic Data Acquisition of 540 line kms of CDP 2D seismic in final
        stages.


•       Preliminary Development Feasibility Study on the Lineynoye and
        Tungolskoye Oil Fields completed.



PetroNeft Resources plc ('PetroNeft' or 'the Company'), owner and operator of
Licence 61, Tomsk Oblast, Russian Federation is pleased to provide this update
on the progress on its 2006/07 three well drilling and seismic programmes.


PetroNeft is pleased to announce that drilling has commenced on the No. 6 well
in the Lineynoye Oil Field. Due to unusually warm weather conditions in Western
Siberia, there has been some delay in getting all necessary equipment to the
drill sites on the Lineynoye and Tungolskoye Oil Fields on Licence 61. As a
result, there has been some slippage in the planned time frame of commencement
of drilling.  However, this is not expected to have any significant impact on
the cost of the wells, the timing of final results or the full completion of the
three well drilling programme as planned for 2007. To ensure that all wells are
completed as planned, a third rig is being mobilised to drill the Lineynoye No.
7 well.


The 2006/2007 Winter seismic programme is proceeding on schedule, with 450 kms,
of a total of 540 kms, already acquired. The programme is expected to be
completed in mid March.


Lineynoye and Tungolskoye Drilling Programme


The Lineynoye and Tungolskoye Oil Fields were originally found by a Soviet
Exploration Company in the early 1970s.  Independent Petroleum Consultants,
Ryder Scott Company, have calculated the Proved and Probable Reserves of the two
fields to be 33.5 million barrels of oil.  The two planned delineation wells,
Lineynoye No. 6 and Tungolskoye No. 4, are designed to confirm the reservoir
data of the 1970s discovery wells and provide further input into a Final
Development Feasibility Study, expected to be completed in the 3rd/4th  quarter
of 2007. The results of the high value exploration well, Lineynoye No. 7, will
also provide input into the Final Development Feasibility Study.


Lineynoye No. 6 Well


The Lineynoye No. 6 well on Licence 61 was spudded on March 4th 2007.  The
principal target horizons for this well are Upper Jurassic sandstone reservoirs,
at a depth of 2,390 metres. The total planned depth for the well is
approximately 2,750 metres and it is anticipated that the well will be drilled,
logged and tested within approximately 70 days of commencement.


Tungolskoye No. 4 Well


Site preparation and mobilisation of a second drilling rig to the Tungolskoye
Oil Field has been completed and assembly of the rig is underway. Drilling is
expected to commence on Tungolskoye No.4 well in late March/ early April.  The
principal target horizons for this well are again the Upper Jurassic sandstone
reservoirs, at a depth of 2,490 metres. The total planned depth for the well is
approximately 3,100 metres and it is anticipated that the well will also be
drilled, logged and tested within approximately 70 days of commencement.


Lineynoye West Prospect. Lineynoye No. 7 Well


West Lineynoye, a high impact prospect, is estimated by Ryder Scott to contain
Possible Reserves of approximately 67 million barrels of oil. In order to
complete the scheduled drilling of this target during the currrent drilling
season, a third rig has now been mobilised to the site and is expected to
commence drilling in May. Drilling pad preparation is underway on the site.  The
principal target horizons for this well are again the Upper Jurassic sandstone
reservoirs, at a depth of 2,375 metres. The total planned depth for the well is
approximately 2,750 metres and it is anticipated that the well will also be
drilled, logged and tested within approximately 70 days of commencement.


Seismic Programme


The 2007/2008 winter seismic programme, to acquire an additional 540 kms of high
resolution 2D seismic data, is proceeding as planned.  Approximately 450 kms of
data has been acquired to date and it is currently expected that this
acquisition will be completed by mid March. This programme is designed to
upgrade the definition of known prospects on the licence. The results will be
used in designing the 2007/2008 Winter drilling programme and will also be used
in the Final Development Feasibility Study.


Development Feasibility Study


A Preliminary Feasibility Study for the development of the Lineynoye and
Tungolskoye Oil Filelds has now been completed by a Russian Institution. The
purpose of the Study is to evaluate the oil reserves and the economics of the
oil fields and will be used as part of the approval process required for
development in the Tomsk Oblast and the Russian Federation. As stated above, the
results of all three wells and some of the current seismic acquisition, will be
incorporated into a Final Feasibility Study, which will be used for final
approval of the project and for development financing purposes.


Dennis Francis, Chief Executive Officer of PetroNeft Resources plc commented:


'We are delighted, given delays created by the unusually warm weather in Siberia
this winter, to have our three well drilling programme back on schedule.
Bringing in the third drilling rig should allow us to complete of our planned
programme on schedule with no significant increase in cost


We remain excited about the prospects on License 61. The two wells at Lineynoye
and Tungolskoye are designed to firm up our reserves base and help prove the
production viability of these fields; whilst West Lineynoye is a high impact
exploration well that could seriously change our reserves base.


We look forward to updating the market on the results of these wells and how
they fit into our overall objective - exploiting Licence 61 as an oil producing
core area'


For further information, contact:


Dennis Francis, CEO, PetroNeft Resources plc
[phone]

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

John Frain/Brian Garrahy, Davy
[phone]

Nick Elwes/Paddy Blewer, College Hill
[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.


                                      End


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