Final Results

Petrel Resources PLC
24 June 2004


                              PETREL RESOURCES PLC

                              CHAIRMAN'S STATEMENT


In the period under review, Petrel has made significant progress toward the goal
of becoming an Iraqi oil producer. We have submitted tenders to develop
significant oil fields in the Kirkuk area of Northern Iraq and in the Hamrin
area of Central Iraq. The final tender, to redevelop and refurbish the Subba and
Luhais fields in Southern Iraq was submitted in June. Each project envisages oil
production in excess of 100,000 barrels a day.

We have continued to analyse available data on our Block 6 exploration project.
Block 6 is a 10,000 sq km block in the Western Desert between Baghdad and
Jordan. Petrel has an agreed work program with the Oil Ministry in Baghdad and
awaits final approval to commence fieldwork. All of this has been achieved in
the midst of almost total chaos and at significant personal risk to our
directors, David Horgan and Guy Delbes, who travel to Baghdad on a frequent
basis. Two senior geological consultants to Petrel, Munim Al-Rawi and David
Naylor, have also visited Iraq a number of times during the period under review.
Through the war and the aftermath we have maintained a strong technical presence
in Baghdad.

Let me put our operation in the context of developments in Iraq and the oil
industry.

IRAQ

The outcome of the invasion of Iraq was predictable. There may be a greater
longer-term geo-political strategy but Iraq and its people are paying a high
price. Wrecking the infrastructure and dissolving the entire bureaucracy of
soldiers, police and civil servants could only have one outcome - chaos. So it
has turned out. Who was going to run the country? Who was going to fix the
water, power, medical and transport systems? Recent months have seen the
re-employment of bureaucrats. The process will continue.  Experienced
administrators, trained police and army personnel will bring some semblance of
order. The lights will come back on, roads will re-open and hospitals will get
supplies. The financial situation is, and will remain, in crisis. Oil revenue
from 2 million barrels a day is not adequate to fund the current needs of the
country, to repair and expand infrastructure, to service more than $100 US
billion in external debt and to develop the only productive asset in the country
- oil. The external debt will have to be written off and massive aid injected to
kick start the rehabilitation process.

Social and economic progress requires a stable political structure. It is hoped
that the provisional government taking power in July can establish a
constitution and a forum acceptable to the differing views in the country. Iraq
is a beautiful country, the cradle of civilisation. The people are
sophisticated, educated and cultured befitting a civilization with thousands of
years of history. The country has a pivotal role to play in the development of
world oil and in the political evolution of the Middle East.

OIL

In recent years even a casual observer of world oil would have noted the coming
crunch in supply. Why is the world so surprised at high oil prices? If demand is
strong and supply weak, prices rise. US and Chinese demand, the principal
driving forces, are expected to continue to grow. World supply is tight.
Difficulties in major producers such as Nigeria and Venezuela add to short-term
pressures but the longer-term picture should be of concern to the Western world.
Production has peaked and is already declining in most of the world's oil
provinces yet demand continues to grow. New sources in the Caspian and Offshore
West Africa are not sufficient to offset the decline. At $40 US a barrel a range
of alternative supplies become profitable, shale oil, marginal fields in the
North Sea, mothballed projects in the Gulf of Mexico, among other sources. None
of these sources can compete with the economics of Middle East oil that has
lifting costs of $1 a barrel. Therein lies the opportunity and the risk. Over
time, Iraq can contribute up to 6 million extra barrels a day. Other Middle East
countries can also expand production. But one attack on the big 4m barrel a day
Saudi Arabian oil refinery can plunge the oil market into crisis and threaten
the world economy.

Petrel committed to Iraq in 1998. We have maintained this commitment through
sanctions, the war, its aftermath and more importantly, we have remained
steadfast in the face of shareholder and investor disbelief. This is now
changing. Our share has been one of the best performing on AIM in the last 18
months - rising 10 fold in price. Financial institutions and multinational oil
companies now request an audience. Our tenders have involvement from a number of
large companies.

Shareholders, investors and oil industry competitors realise that we are one of
the few, if not the only Western oil company, to have maintained an ongoing
dialogue with the Iraq Oil Ministry. Over the years we have not only developed a
good working relationship with officials but we have also learned a great deal
about Iraqi oil. Simply put, we believe that Iraq is the best oil province in
the world. Known resources of 115 billion barrels are only a fraction of what
might be there. Much of the country remains unexplored at surface and at depth.
The three oil fields, for which we have prepared tenders, may contain in excess
of 2 billion barrels. Each of the projects will have daily production in excess
of 100,000 barrels with low operating costs. Capital costs are roughly $2,000 US
per daily barrel. Our current proposals are to act as a contractor. We will
develop and operate the projects in return for a cost plus fee. Our remit has
recently been extended to seek out the capital to undertake the projects. Over
the coming months we anticipate detailed discussions on the technical and
financial aspects of each tender.

Iraq badly needs revenue to reconstruct. The only source is oil. Our three
projects could be in production within 24 months. The sovereign government
taking control from July 1st 2004 will have the authority to undertake oil field
development as well as to grant exploration concessions. Petrel is well placed
to be an early beneficiary of the new regime.

OTHER PROJECTS

While Petrel is acutely focused on Iraq, we have kept a weather eye on other
areas. We continue to maintain an interest in Sudanese oil. Sudan is a large
country. The main political problem is being slowly resolved, though this
initiative sparked new problems in Darfur. Our interest has moved from a block
in the East to a large concession in the North-West. Our activities in Iraq have
not gone unnoticed in the Arab world. We are at an early stage in looking at oil
/gas projects in other Middle East Countries.

FINANCE

We have adequate finance to continue in our present manner but one successful
tender or the finalisation of the Western Desert exploration contract will see
an immediate increase in work and expenditure. We believe that financing success
in Iraq will not be a problem.

FUTURE

After years in the desert, literally and metaphorically, our time is coming. The
world needs more oil, Iraq has the oil. Political and social stability in Iraq
now look possible. In the past 5 years we have invested substantial financial
and human capital into maintaining a presence in the country. A growing oil
industry will be the engine of Iraqi development. I fully expect Petrel to
participate in this development.

John J. Teeling
Chairman
23 June 2004


CONSOLIDATED PROFIT AND LOSS ACCOUNT
for the year ended 31 December 2003

                                                                                           2003                    2002
                                                                                              €                       €

Administrative expenses                                                               (244,638)               (238,080)

LOSS ON ORDINARY ACTIVITIES BEFORE INTEREST                                           (244,638)               (238,080)
Interest income                                                                             573                       -

LOSS FOR THE YEAR BEFORE TAXATION                                                     (244,065)               (238,080)

Taxation                                                                                      -                       -

LOSS FOR THE YEAR AFTER TAXATION                                                      (244,065)               (238,080)

Profit and loss account : opening - (deficit)                                       (1,856,424)             (1,618,344)

Profit and loss account : closing - (deficit)                                       (2,100,489)             (1,856,424)

Loss per share - basic                                                                  (0.48c)                 (0.54c)

Loss per share - fully diluted                                                          (0.48c)                 (0.54c)



All gains and losses are dealt with through the profit and loss account. Results
derive from continuing operations.

The financial statements were approved by the Board of Directors on 23 June 2004
and signed on its behalf by:


John Teeling

David Horgan

DIRECTORS



CONSOLIDATED BALANCE SHEET
as at 31 December 2003
                                                                                             2003                  2002
                                                                                                €                     €

FIXED ASSETS
Tangible assets                                                                             3,011                 5,426
Intangible assets                                                                       1,373,863             1,081,085
Financial assets                                                                                -                     -
                                                                                        1,376,874             1,086,511

CURRENT ASSETS
Debtors                                                                                    50,281                27,260
Cash at bank                                                                              958,308                 6,645
                                                                                        1,008,589                33,905

CREDITORS : (Amounts falling due within one year)                                       (183,140)             (152,826)

NET CURRENT ASSETS/ (LIABILITIES)                                                         825,449             (118,921)

TOTAL ASSETS LESS CURRENT ASSETS                                                        2,202,323               967,590

CAPITAL AND RESERVES
Called-up share capital                                                                   727,690               601,055
Capital conversion reserve fund                                                             7,694                 7,694
Share premium                                                                           3,567,428             2,215,265
Profit and loss account - (deficit)                                                   (2,100,489)           (1,856,424)

EQUITY SHAREHOLDERS' FUNDS                                                              2,202,323               967,590

The financial statements were approved by the Board of Directors on 23 June 2004
and signed on its behalf by:

John Teeling

David Horgan

DIRECTORS


CONSOLIDATED CASH FLOW STATEMENT
as at 31 December 2003

                                                                                              2003                 2002
                                                                                                 €                    €

NET CASH OUTFLOW FROM OPERATING ACTIVITIES                                                (68,811)            (406,812)

RETURNS ON INVESTMENT AND SERVICING OF FINANCE
Interest received                                                                              573                    -

NET CASH INFLOW FROM RETURNS ON INVESTMENTS AND SERVICING OF FINANCE                           573                    -

TAXATION
Corporation tax paid                                                                             -                    -

CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT
Payments to acquire intangible fixed assets                                              (292,778)            (168,273)
Payment to acquire tangible fixed asset                                                          -              (1,264)

NET CASH OUTFLOW BEFORE FINANCING                                                        (361,016)            (576,349)

FINANCING
Issue of ordinary share capital                                                          1,390,263              569,232
Share issue expenses                                                                      (77,584)                    -

NET CASH INFLOW FROM FINANCING                                                           1,312,679              569,232

INCREASE/(DECREASE) IN CASH                                                                951,663              (7,117)


Notes:

The financial information set out above does not constitute the Company's
financial statements for the years ended 31 December 2003 or 2002.  The
financial information for 2002 is derived from the financial statements for 2002
which have been delivered to the Registrar of Companies.  The auditors have
reported on the 2002 statements; their report was unqualified and did not
contain a statement under section 237(2) or (3) of the Companies Act 1985.  The
financial statements for 2003 have been audited and will be delivered to the
Registrar of Companies following the Company's Annual General Meeting.  The
auditors have reported on the 2003 statements; their report was unqualified and
did not contain a statement under section 237(2) or (3) of the Companies Act
1985.

A copy of the Company's annual report and accounts for 2003 will be mailed to
shareholders shortly and will also be available for collection from the
Company's registered office.


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