Response to QVT Announcement

Cardinal Resources plc
27 November 2006

CARDINAL RESOURCES PLC
RESPONSE TO QVT ANNOUNCEMENT

LONDON - Monday, 27th November 2006

Cardinal Resources plc (AIM:CDL) ('Cardinal' or 'the Company'), an independent
oil and gas production and exploration company operating in Ukraine, notes with
disappointment the announcement made by QVT Financial LLP ('QVT') earlier today.

Key points

•   Cardinal respects the views of shareholders and has sought a further
    meeting with QVT; which has been refused.  It is disappointing that QVT has
    instead chosen to conduct a campaign of misinformation via the press.

•   QVT bought Cardinal shares in full knowledge of the existing Payment
    in Kind Notes with Warrants financing ('PIK Notes') which was announced in
    December 2005.

•   Cardinal seeks to put the record straight in terms of the alternative 
    sources of finance that have been considered, the history of opportunities 
    such as the Rudis developments and RC re-instatement and how Cardinal has 
    been and would like to remain fully funded.

•   Cardinal has explored a variety of financing options including the 
    possibility of further PIK Notes or alternatives such as a rights issue.  No
    proposal has been received from QVT to date.

•   QVT are invited to meet Cardinal at the earliest opportunity to engage in a 
    more constructive dialogue.

Background

The Board takes shareholders' views seriously.  Cardinal makes regular
announcements to the market to update shareholders and, since IPO in April 2005,
has had an active programme of meetings with existing and potential shareholders
on the basis of this public information.

QVT first notified Cardinal (in the name Deutsche Bank AG and subsidiary
companies) on 23 January 2006 that it had become a Cardinal shareholder and this
was announced by Cardinal on 25 January 2006.  QVT's share purchase followed
announcement of the Silver Point financing in December 2005 (which financing
terms QVT now seeks to criticise).  Cardinal last met with QVT in August 2006
and has been in contact with QVT via its advisers, as recently as last Friday 24
November 2006, to request a meeting tomorrow in New York.  It is disappointing
that QVT has refused to meet and has instead chosen to conduct a campaign of
misinformation via the press.

Cardinal was floated on AIM in April 2005 with a fully funded business plan for
its existing assets but with many further development opportunities in Ukraine
including a right, subject to finance, to re-instate it's net profit interest in
the Rudivsko-Chernovozavodske ('RC') Field back up to 45% (from 14.9%) by
settling the capital expenditure account of Cardinal's Joint Activity Agreement
('JAA') with JSC Ukrnafta (the 'RC re-instatement').  On 30 September 2005 the
Company announced the acquisition of Rudis Drilling Company ('Rudis'), a
complementary oil and gas exploration and production company also based in
Ukraine which almost doubled the Company's reserves.  Rudis has attractive
properties now controlled and operated by Cardinal.

Following IPO, Cardinal met with existing large and prospective shareholders to
try to raise further equity finance to this end and explored a wide range of
available funding alternatives.  Conventional bank debt is not yet available to
Cardinal because the Company is still in a pre-profit asset workover phase.
Conventional equity could not have been issued at a price approaching the IPO
placing price.  Rather than dilute shareholders, the Board chose to finance its
business with an issue of PIK Notes and this transaction was announced in full
on 23 December 2005.  The warrants attached to the PIK Notes had a subscription
price of 27.5p, which price was at a significant premium to the then share price
and consequently far less dilutive to asset values than any equity issue that
would have been possible at a further discounted price.  Cardinal's share price
today is 14p.

In the spring of this year, the politics of Ukraine changed and the Company has,
as yet, been unable to consummate the RC re-instatement.  In the absence of an
ability to progress the RC re-instatement, the Company has used much of the PIK
Note funds raised in December 2005 to begin development of the Rudis assets for
the benefit of Cardinal shareholders.  The Company is now approaching the point
where, if it is to be able to both fund the RC re-instatement and obtain the
full benefit of the Rudis development for shareholders, it will need access to
further funds. QVT are aware of this requirement.  The Board had been hopeful,
after dialogue with QVT and its advisers, that a constructive proposal to fund
Cardinal, perhaps by way of a rights issue underwritten by QVT, would be
forthcoming.  To date no such proposal has been received from QVT (or any other
shareholder) and the company is therefore contemplating the issue of further PIK
Notes shortly.

QVT and their advisers may not appreciate the present sensitivity surrounding
negotiations for the RC re-instatement and their interference may be
detrimental. The Company expresses the hope that Prime Minister Yanukovich will
take the opportunity to send a strong message in advance of his visit to the
United States next week to show support for the Ukraine rule of law by
supporting Cardinal with its plans to improve domestic gas production in
Ukraine. Cardinal plans to pursue all available options and remedies to enforce
its contract for the RC re-instatement.  If plans for the RC re-instatement are
successful, Cardinal believes that the RC re-instatement will greatly benefit
Cardinal shareholders.

Cardinal hopes to avoid the diversion of management time and expense of the
Extraordinary General Meeting that QVT plan to request. Cardinal reiterates its
offer of a meeting with QVT at the earliest opportunity and is hopeful of a more
constructive dialogue for the benefit of all shareholders to help fund its
exciting development plans in Ukraine.

                                   ###

For further information please contact:

Cardinal Resources
Brunswick Group
Charles Green / Franziska Stahlknecht                 Paul Scott
[phone]                                  [phone]
[e-mail]                    [e-mail]


Notes to Editor

Cardinal Resources plc

Cardinal Resources plc is an independent oil and gas production and exploration
company with assets 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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