PetroNeft Pleased with Initial Lineynoye Test Results

PetroNeft Resources' subsidiary, Stimul-T, the sole owner and operator of License 61 in Tomsk Oblast, Russia updates the progress on its 2006/07 three well drilling program.

Lineynoye No. 7 Well

Initial analysis of the Lineynoye No. 7 exploration well on the West Lineynoye Prospect, released on August 14th, confirmed the presence of 2 meters of net hydrocarbons in the Upper Jurassic J1 sandstone interval. It also confirmed a Gross Oil Column of 22 meters. Flow testing ("Raising Head" methodology) of the well has now been successfully completed over a 4 meter gross perforated interval (-2,502 to -2,506 meters measured depth). During testing, the well flowed oil at rate of 125 barrels per day. The oil is very high quality with a 44º API gravity.

This well will require an electrical submersible pump for commercial production. Initial conservative studies based on the pay zone properties and test results indicate that the well should flow at least 250 bopd with the proper electrical submersible pump. This level of unstimulated flow is excellent for the region, where tight reservoirs normally require reservoir Stimulation for production. Stimulation of the reservoir through hydraulic fracturing will further increase this flow rate from the well.

Studies are now underway to place the well (along with Lineynoye No. 6) on pilot/long term production test during the winter season of 2007/08.

Tungolskoye No. 4 Sidetrack

The Tungolskoye No. 4 appraisal well has 15 meters of net oil pay based on the core data and independent log interpretations. This represents the best reservoir interval encountered of the 17 wells drilled in the block to date. However, we are currently sidetracking the existing well in order to overcome mechanical difficulties and fully test the accumulation at this location. It is anticipated the well will be sidetracked and tested before the end of October.

When all testing is completed a reassessment of the reserves in the established oil fields on License 61 will be carried out by outside consultants Ryder Scott. The results will be incorporated into the Plan of Development.

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

"We are pleased to announce positive results for the Lineynoye No. 7 flow testing. We are especially excited by the demonstrated flow rates and projected rates on Artificial Lift without Stimulation. This provides positive results for ongoing development planning.

We are making progress across the full spectrum of our projects. The Tungolskoye No. 4 sidetrack will give us necessary information for a full reassessment of our reserves levels which will be carried out to both SPE and Russian standards /criteria. Along with our winter 2007/08 three well drilling program, we will conduct two pilot/long term production tests and also plan to complete the field development plan in the near future."