Competent Person's Report & Operational update

PRESS RELEASE

 25 October 2010

Matra Petroleum plc

("Matra" or the "Company")

 Competent Person's Report confirms Commercial Field/Operational update.

Competent Person's Report ("CPR")

Matra Petroleum, the Russian focused E&P Company, is pleased to report that Energy Resource Consultants ("ERC") has completed a CPR on the Sokolovskoe Field. The CPR is based on the results of the in-depth geophysical and geological review conducted by Equipoise Solutions.

The main results are as follows:

·; Contingent Recoverable Resources (2C) 15.1 million barrels1

·; Net Present Value $60-80 million for 15 million barrels2

·; Deterministic Recoverable Resources as currently mapped - 23.7 million barrels3

·; Unrisked additional Prospective Recoverable Resource of up to 84 million barrels (high case)

1. Under SPE guidelines these estimates will be reclassified as Recoverable Reserves once the "Contingencies" are satisfied. The contingencies are the formal issue of the Production Licence, the adoption by the Board of Matra and acceptance by appropriate authorities of a Field Development Plan.

2. Net Present Value using 10% discount rate and $75/barrel for Urals blend export price. (ERC verification/audit of Matra model)

3. Estimate is based on the structure as currently mapped by Equipoise Solutions but cannot currently be included in SPE classifications due to structural uncertainty and lack of well data in the NE part of the field.

The covering letter from ERC and definitions are shown below.

Operational Update

Well-12

Attempts to establish a circulation path between the oil and water zones that would allow cement isolation in well 12 have been unsuccessful. Following a technical review we concluded that further attempts to isolate water in well-12 are unlikely to be successful and therefore the well will be sidetracked some 50 meters from the existing bottom hole location where drilling will be halted within the oil zone (without penetrating water bearing formations) and then recompleted for production.

A contract for this side-track is currently being finalised and the rig will be mobilised to the site within the next few days. This will be funded from existing cash resources and is estimated to take four to six weeks.

Well-13

Due to contractual commitments of the workover rig from well-12 a rig has been separately sourced to conduct the remedial work on well-13. This rig is currently being mobilised to the site and the work is expected to take 2-3 weeks.

The nature of the water influx in well-13 differs from that in well-12 and therefore cement isolation is technically more feasible.

Matra's Managing Director, Peter Hind said:

"We are delighted with the results from the CPR which endorse our strategy to monetise the Sokolovskoe Field. The work conducted by Equipoise has also resolved the technical issues thrown up by the well-13 result. The geological review concluded that we have yet to encounter the best part of the reservoir and that the main reefs are most likely very close to existing wells and the possibility remains that reserves will ultimately be much higher.

Given the unexpected result of well-13, we will need to confirm the North Eastern part of the structure with more seismic and additional wells to move that area into the Contingent Recoverable Resources category. The economic review concludes that the development is extremely robust commercially and that additional reserves will add substantial value in the future.

In well-12 we reached the conclusion that it would be better to side-track the well away from the existing location. This is likely to provide a much more satisfactory result.

We are not aware of any impediments to the issue of the Production Licence and expect confirmation of this before year-end, allowing us to move reserves into the proven and probable category and to begin field development in earnest."

For further Information, please contact:

Matra Petroleum plc www.matrapetroleum.com

Peter Hind, Managing Director Tel: +44 (0) 7990 807855

Neil Hodgson, Exploration Director Tel: +44 (0) 7973 342822

Matrix Corporate Capital LLP Tel: +44 (0) 20 3206 7000

Louis Castro

Tim Graham

Pelham Bell Pottinger Tel: +44 (0) 20 7861 3169

The below link is to the document from Energy Resources Consultants:

http://www.rns-pdf.londonstockexchange.com/rns/9031U_-2010-10-22.pdf 

The below link is to a document containing definitions relating to this release:

http://www.rns-pdf.londonstockexchange.com/rns/9031U_1-2010-10-22.pdf