PetroNeft Reports Early Results for Pioneering Lineynoye Well

PetroNeft Resources plc, owner and operator of License 61, Tomsk Oblast, Russian Federation, through wholly owned Russian subsidiary Stimul-T, announced the initial results of the first modern delineation well at the Lineynoye Oil Field in Western Siberia and progress on two further wells on the License.

Lineynoye No.6 well

The Lineynoye Oil Field is located in License 61 in the Tomsk Region of the prolific Western Siberian Oil and Gas Basin. Discovered in the 1972, Ryder Scott petroleum consultants estimate 2P reserves of 15.6 million bbls of oil. PetroNeft's operational strategy is to utilise modern technology and techniques to fully delineate the field, confirm reservoir details, and optimise a field development plan as a first step towards production.

Tuesday's news is the first operational update post the first well spud in March 2007 and whilst very positive, should be seen as a successful step in a process which will eventually lead to production.

--The Lineynoye No. 6 well spudded on 4 March 2007 and has been drilled to a Target Depth of -2,650 meters subsea.
--Oil was confirmed within the J1 reservoir interval in 2 stratigraphic units, J11 and J12.
--The J1 oil reservoir interval and lowermost part of the Bazhenov Formation were cored from, -2,401.3 meters to -2,436.1 meters subsea, with 98.9% core recovery. These cores are currently being analysed in detail.
--The primary hydrocarbon interval, the J12 sandstone, from -2,419.3 meters to -2,430.5 meters subsea, contains 11.2 meters of continuous net pay with 14% to 16% porosity and hydrocarbon saturations of 75% to 84%.
--The secondary hydrocarbon interval the J11 sandstone is 2 meters thick with hydrocarbon shows but appears tight and non-productive at this location based on the initial log evaluation.
--There is excellent stratigraphic correlation between the reservoir intervals in L-6 and discovery well L-1, which was drilled in 1972.
--The base of the Bazhenov Formation is at -2,410.3 meters subsea in the well, which is consistent with the seismic interpretation prior to drilling the well. [the well intercept is 190 meters southwest of the surface location]
--The data indicates that the oil water contact is at or below -2,430.5 meters subsea in the lower part of the J12 sandstone, which is at least 10 meters lower than the previous conditional oil water contact for the field.
--Geophysical logging and initial petrophysical analysis has now been completed and preparations are underway to carry out flow tests on the well to determine its productive capacity. Results will be published as soon as they are available.

Other Activities

The Tungolskoye No. 4 drilling rig has now been assembled and final hook-up is underway. It is anticipated that this well will be spudded by mid May. This well is designed to confirm the reservoir data of the 1973 discovery and provide further input into a Final Development Feasibility Study, expected to be completed in the 3rd/4th quarter of 2007. Ryder Scott petroleum consultants estimate 2P reserves of 17.9 million bbls of oil for the Tungolskoye Oil Field.

The Lineynoye No. 7 site has required additional piles to be driven to firm up the foundation for the drilling rig and it is anticipated that this high impact exploration well will now spud in June.

The drilling results from this well and the Tungolskoye No. 4 and Lineynoye No. 7 wells will be used to update the Feasibility Study for the Development of the Lineynoye and Tungolskoye fields, which is expected to be completed later in 2007. The Company will also use data gained from this season's drilling and seismic program to further evaluate the numerous prospects on License 61. There are several exploration and development prospects currently under full study that will develop into a drilling program for the winter of 2007/2008.

Dennis Francis, Chief Executive Officer of PetroNeft Resources plc commented:

"We are delighted with the initial results of the Lineynoye No. 6 well. Not only have we confirmed the presence of significant and continuous reservoir sandstones in the J12 interval, but we have also lowered the oil water contact for the field which, when integrated with the new seismic data acquired this winter, could increase the size of the field both geographically and in terms of reserves.

"We now look forward to the flow test results from Lineynoye No. 6 and the drilling of the remaining two wells in this years evaluation program."