PetroNeft Resources, the owner and operator of Licenses 61 and 67, Tomsk Oblast, Russian Federation, provided an update on its operations.

Highlights: •Year end production reached approximately 3,000 bopd; current production steady at 2,300 bopd ◦Lineynoye Pad 1 responded to pressure maintenance ◦Lineynoye Pad 2 fracture results below expectations

•Arbuzovskoye Development ahead of schedule ◦Pipeline production expected to commence in 2Q 2012 ◦Plans for 10 new production wells in 2012 progressing ahead of schedule

•Ledovaya 2a exploration well ◦oil encountered in primary Upper Jurassic interval ◦oil discovered in secondary Lower Cretaceous interval

•Cheremshanskaya No. 3 exploration well ◦testing successfully completed; three separate oil pools discovered ◦primary Upper Jurassic J1-3 interval tests good quality oil + water ◦secondary Upper Jurassic J1-1 + Bazhenov interval tests high quality oil

License 61 - Lineynoye field development program

Total production increased to approximately 3,000 bopd at the end of the year with the benefit of Pad 1 water injection and initial positive results from the Pad 2 fracture stimulation program. In recent weeks production has declined to 2,300 bopd due to a number of issues at Pad 2.

Pad 1 wells have responded to the pressure maintenance program (water injection) that we initiated last summer using three injection wells and the production decline has now halted in many wells and in some cases started to increase. We are encouraged with the water flood response on the Pad 1 wells.

Tags: PetroNeft Resources plc