PetroNeft Resources, owner and operator of Licences 61 and 67, Tomsk Oblast, Russian Federation, provides an update on its operations.

Highlights: • First of nine production wells spudded 3 weeks ahead of schedule • Pipeline construction on schedule and within budget • Equipment procurement and mobilisation nearing completion • First year-round production scheduled for Q3

Production drilling PetroNeft announces that the first of its nine planned production wells to be drilled in 2010 has been spudded at the Lineynoye oil field in Licence 61, approximately 3 weeks ahead of schedule.

The 2010 production drilling programme will involve the drilling of 9 wells from the current location utilising a rail-mounted production drilling rig designed to facilitate the drilling of multiple deviated wells with close spacing at the surface.

Once the first well is drilled and cased, the drilling rig will move five metres along its rails and immediately commence drilling the second well of the programme. This will be repeated for the third well, after which the rig will be skidded 15 metres to drill the fourth well while a workover rig completes the first three wells and installs electric submersible pumps ('ESPs'). Thereafter a fifteen metre skid will be inserted after the fifth and seventh wells to allow pairs of wells to be completed together, thereby optimising both the timing of wells coming on production and the size of the drilling pad.

All tubulars, supplies and consumables for the 9 well production drilling programme are also on site.

First production at the Lineynoye oil field remains scheduled for the third quarter of 2010.

Pipeline Construction of the 60km pipeline from Lineynoye to Kiev-Eganskoye is progressing to plan. All of the pipe has been laid out along the route and construction of the pipeline is due for completion in mid April, well within the weather window required for this work. Final hydro-pressure testing of the line is scheduled for June 2010.

Field facilities Most of the equipment required for construction of field facilities at Lineynoye has been procured and mobilised to location. This process should be complete by the end of March. Construction of these facilities has commenced and is due for completion in time to commence year-round production in the third quarter of 2010. The facilities include basic oil processing, oil storage, gas powered generation and communications systems as well as improved and enlarged crew accommodation and catering facilities.

Dennis Francis, Chief Executive Officer of PetroNeft Resources plc commented,'Thanks to the efficient and carefully synchronised planning of our infrastructure and drilling programmes and the commitment of our staff and contractors over the winter, all aspects of the Lineynoye Field development project are progressing on or ahead of schedule. Spudding of our first production well was an important milestone and boosts our confidence that we will commence year-round production in Q3 and achieve the initial target production of approximately 4,000 bopd by the end 2010.'

Tags: PetroNeft Resources plc