PetroNeft (AIM: PTR) an oil & gas exploration and production company, operating in the Tomsk Oblast, Russian Federation, and 50% owner and operator of Licences 61 and 67, is pleased to provide the following update.

Highlights

Heads of Terms signed with Belgrave Naftogas (formerly Arawak Energy Russia B.V.) to acquire an additional 40% interest in Licence 67 for US$2.9 million.

David Sturt, Chief Executive Officer of PetroNeft Resources plc, commented: 'This potential acquisition is consistent with the Board and Management's previously announced commitment of enhancing shareholder value through boosting production, reserves and revenue. As early as next month the asset is expected to transform from being an exploration to a producing asset. This agreement will add significant impetus to our plans to develop the Licence.

The significant premium on the share converts reflects both PetroNeft Resources plc and Belgrave Naftogas's shared view of the mismatch between the current share price of PetroNeft and the intrinsic value of PetroNeft's underlying asset portfolio. We expect that Belgrave Naftogas's nominated Director will combine international experience and regional insight to boost the financial and operating profile of our assets.

We will be working hard with Belgrave Naftogas to ensure that we close the acquisition during the first quarter this year.'

Contact:

David Sturt

Tel: +97 55 1919 808

The information contained in this announcement has been reviewed and verified by Mr. David Sturt, Chief Executive Officer and Executive Director of PetroNeft, for the purposes of the Guidance Note for Mining and Oil & Gas Companies issued by the London Stock Exchange in June 2009. Mr. Sturt holds a B.Sc. Degree in Earth Sciences from Kingston University and an MSc. in Exploration Geophysics from The University of Leeds. He is a member of the Petroleum Exploration Society Great Britain and has over 35 years' experience in oil and gas exploration and development.

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