Petroneft Resources Plc provided an update on its operations at license 61. Arbuzovskoye well 105, the sixth well in the current programme, has been successfully tested at an initial rate of 160 bopd with no visible water cut. Further to last month's update, pressure testing of two wells at Arbuzovskoye was carried out which indicated that reservoir pressures are in line with expectations based on volumes produced to date. This confirmed that the rapid decline in production experienced in the Arbuzovskoye 102 well in January and February was due to a near-wellbore problem resulting from likely migration of fine grained materials that had plugged the perforations and was not due to problems with reservoir pressure. As a result an underbalanced re-perforation of the Arbuzovskoye 102 well was performed, which successfully removed the flow restrictions in the well and restored production to 380 bopd. Total oil production, comprising both the Lineynoye and Arbuzovskoye oil fields has increased up to 2,800 bopd after successful completion of 105 well and re-perforation of 102 wells at Arbuzovskoye.

PetroNeft Resources plc provided the update on its operations at Licence 61. Arbuzovskoye well 112 has been successfully tested at an initial rate of 140 bopd with no visible water cut. The well is currently shut-in for long term pressure build up testing before it is put into long-term production. Arbuzovskoye well 105, the next well in the drilling sequence, is currently drilling ahead. Well 112 is the fifth new production well in the Arbuzovskoye oil field and to date each well has displayed little or no visible water cut. Overall, the average initial production rates from the first five wells in the programme have exceeded targets of 150-200 bopd per well. This winter, the company has faced unusually extreme temperatures at Licence 61, reaching as low as -49 degrees Celsius, which has slowed operations significantly. In recent weeks, the company has encountered mechanical production issues at Arbuzovskoye which have impacted on production rates in two wells. The reduced output may be due to migration of fine grained materials that are gradually plugging the well bore which can be rectified with a simple workover. The net impact is a reduction of overall production by 300 bopd. The pressure build up test of the 112 well should assist in determining which is the more likely cause of the reduced rates and will factor the results of this into future workover and water injection plans. Arbuzovskoye contains 2P reserves in excess of 13 million barrels of oil according to independent reserve auditors Ryder Scott and is the Company's second field being developed. Licence 61 - Production: Total oil production, comprising both the Lineynoye and Arbuzovskoye oil fields is currently 2,600 bopd. This rate does not include any production from well 112 which is currently shut-in for long term pressure build-up testing, or the 300 bopd currently lost from the two Arbuzovskoye wells.

Petroneft Resources Plc provided an update on its operations at Licence 61. Licence 61 - Production: Total oil production, comprising both the Lineynoye and Arbuzovskoye oil fields is currently 2,800 bopd up from 2,500 bopd in late November. The rate is reduced due to 3 wells at the Lineynoye oil field being currently off-line while remedial work is carried out on the down-hole pumps. The Company had expected these wells to be back online before the year end however the weather conditions at the field continue to be extremely cold (as low as -47°C) which has slowed the workover and completion process. They are expected to be back online by mid-January 2013.