Operational Update

Cardinal Resources plc
16 October 2007

Operational Update
LONDON - Tuesday, 16 October 2007

Cardinal Resources plc (AIM:CDL) ('Cardinal' or 'the Company'), an independent
oil and gas exploration and production company operating in Ukraine, today
provides an operational update and update on ongoing refinancing discussions.

REFINANCING DISCUSSIONS

Cardinal's shares were suspended from trading on AIM on 1 October 2007 pending
conclusion of refinancing discussions which, if successful, would enable the
Company to clarify its financial position and publish its Interim Results to 30
June 2007.

Cardinal remains in ongoing discussions with one or more potential funding
providers to obtain a viable short to medium-term financial solution. It has not
yet been possible to conclude negotiations or reach agreement on acceptable
terms that the Board of Cardinal could recommend to shareholders.

As reported on 18 September 2007, the Company has been in discussions with
Silver Point Capital ('SPC') regarding the terms of the SPC Payment-in-kind 
('PIK') note facility and sought consent from SPC as is normal for a
senior lender to draw down on any subordinated loan such as that provided for by
the Hares Commitment Letter. SPC has not provided consent to such a drawdown and
as a result Cardinal's cash-flow remains very tight.

The result of any discussions or negotiations that provide a viable financial
solution will be fully disclosed to the Company's shareholders once obtained and
shareholder approval sought in accordance with the AIM Rules as required.

The Company's Nominated Adviser ('NOMAD'), Nabarro Wells & Co Limited, has given
notice of resignation effective 23 October 2007. Cardinal shares will remain
suspended under AIM Rule 1 as well as AIM Rule 18 if the current suspension of
Cardinal's shares under AIM Rule 18 has not by then been lifted and Cardinal has
not appointed a replacement NOMAD by that date. Cardinal is seeking a
replacement NOMAD. If Cardinal does not appoint a replacement NOMAD within a
month of the existing NOMAD's resignation then the admission of its shares to
trading on AIM will be cancelled under AIM Rule 1.

Depending upon the outcome of those efforts, the directors of Cardinal will
continue to review all the options available to obtain the most value for
Shareholders of the Company.

SALES COMMENCE FROM GAS GATHERING AND SEPARATION FACILITY

Sales from the gas gathering and separation facility have commenced following
successful commissioning and tie-in to the state pipeline.

The BC #3A well was tied into the gas gathering and separation facility and put
into production. The production rate into the sales line averaged 1,037 Mcf/d
and 48 bc/d of condensate for an average daily rate of 221 boepd. The gas
gathering and separation facility was commissioned on 18 September 2007 with gas
sales commenced on 1 October 2007.

The work over on the BC #13 well has been completed and the well is ready to be
tied into the gas gathering and separation facility pending additional funding.
Plunger lift equipment was received for the BC #110 well and, subject to the
availability of further funding, this equipment will be installed prior to tie
in and commencement of sales.

The Company signed a forward gas sales agreement to deliver 218,950 mcf (six
million one hundred sixty eight thousand cubic meters) in equal volumes for the
period from October 2007 to January 2008 at the price of $4.56/mcf (including
VAT); this price represents approximately a 5% discount to the current market
price. The current level of production from the BC #3 well is below the level
contracted to be delivered. To the extent that the actual level of production
reached in October remains below the contractual volume of gas to be delivered,
the Company will be required to settle the remaining balance in cash plus a
penalty charge of 10%, and may do so subject to available funding.

COST OF COMPLETING THE GAS GATHERING AND SEPARATION FACILITY

As previously announced on 30 June, Cardinal encountered capital expenditure
cost overruns in completing the facility and tie in of wells. Cardinal has now
completed the review of submitted invoices against the authorizations for
expenditure ('AFEs') to quantify the actual cost overrun, which exceeded the
budget by 72%. The total cost of the separation plant construction amounted to
$4.74 million and the cost of the tie-ins and flow lines amounted to $2.5
million, against the original total budget of $4.2 million. These costs, which
relate largely to the latter category, have exceeded the budget due to the
following reasons:

• An original underestimation of the gas gathering and separation facility's
required specification, particularly in the area of pipelines, valves, flow
lines and construction cost of well tie-ins and gathering of gas beyond the
perimeter of the main separation plant site;

• Significant increases in the cost of flow lines and other materials; and

• Higher charges by contractors in order to meet the exacting timescale 
originally agreed, coupled with a need to agree a figure and resolve disputes 
amicably in an environment where demand for services of suppliers in Ukraine 
exceeds supply and agreement must be reached if business is to continue.

Cost overruns have been further exacerbated by the late submission of invoices
from local contractors and the high volume of disputed invoices received.

JAA GAS SALES

Outside of Cardinal's ultimate direct control (despite the Company's best
efforts to find a solution) but nevertheless important to the future of the
Company is potential for a solution to the JAA Gas Sales issue following
Ukraine's parliamentary elections, held on 30 September 2007. Approximately
117,000 boe of Cardinal's share of JAA gas produced from both the RC Field and
the BC Field JAA 429 was placed in storage in the first half of 2007. Any
solution to the JAA Gas Sales issue which would enable recommencement of RC
Field and BC Field JAA 429 gas sales from both storage and future production at
free market prices would greatly improve cash flow.

WORK PROGRAMME UPDATE

A water source has been identified at the BC #111 well and work to isolate the
zone is to be scheduled, subject to funding being available.

Land use agreements were granted for the BC #9 and #17 wells. The casing adapter
flanges on the BC #17 and #9 wells were attached to the casing stub and the
casing and wellheads installed. Further work is on hold pending funding. The BC#
7 well land allocation is still outstanding.

SEISMIC RESULTS

The field work of the 3D seismic survey over approximately 65 km(2) of the BC
licence area was completed during the period. The data processing and
interpretation is expected ready to proceed, subject to additional funding.

PREVIOUSLY MADE FORECASTS

All previously made forecasts by the Company including year-end production run
rates and general and administrative cost savings are under review pending the
conclusion of refinancing discussions and identification of the source of short
to medium term funding because the availability of such funding affects the
timing, bases or assumptions underlying the achievement of such forecasts.

Glossary of Terms
boe Barrels of oil equivalent
boepd Barrels of oil equivalent per day
BC Licence Bilousivsko-Chornukhinska licence area (also known as Rudis)
DB Licence Dubrivska licence area
RC Field Rudivsko-Chernovozavodske licence area
NY Licence North Yablunivska licence area

Cliff West, Executive Vice President and Chief Operating Officer of Cardinal
(Member of the American Association of Petroleum Geologists - Certified
Petroleum Geologist # 1563) is the qualified person that has reviewed and
approved the technical information within this press announcement.

For further information please contact:

Cardinal Resources                                Conduit PR Ltd
Charles Green / Natalia Egorova                   Jonathan Charles
[phone]                              [phone]
[e-mail]

Nominated Adviser
Nabarro Wells & Co. Limited
John Wilkes / Marc Cramsie
[phone]
[e-mail]

Notes to Editor
Cardinal Resources plc is an independent oil and gas company engaged in the
acquisition, development, production and exploration of oil and natural gas
properties in Ukraine. Cardinal is an experienced operator in the country
focused on expanding its existing operations through the farm-in or acquisition
of additional upstream oil and gas assets that can be further developed through
the application of modern technology and expertise.





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