Half Yearly Report

29 September 2015

PetroNeft Resources plc

("PetroNeft" or the "Group" or the "Company")

2015 Interim Results

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 report its results for the 6 months ended 30 June 2015.

Highlights

• Current gross production from Licence 61 is about 2,700 bopd.

o Represents a 46% increase in production in 2015.

• New wells drilled at Tungolskoye, Sibkrayevskoye, West Lineynoye and Arbuzovskoye during period.

• 1,000 km of high resolution 2D seismic data acquired at Licence 61

David Golder, Chairman of PetroNeft Resources plc, commented:

"We have had an exceptionally busy year so far, with good success in growing production by over 40% and in enhancing our understanding of Licence 61 through the acquisition of new seismic data.

Given that market conditions remain challenging with little sign of improvement in oil prices in the near term, our focus is on growing production, managing costs and positioning the company for any improvement in the market conditions. We look forward to updating shareholders of our results over the coming year."

For further information, contact:

The information contained in this announcement has been reviewed and verified by Mr. Dennis Francis, Director and Chief Executive Officer 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. Francis holds a B.S. Degree in Geophysical Engineering and a M.S. Degree in Geology from the Colorado School of Mines. He has also graduated from the Harvard University Program for Management Development. He is a member of the American Association of Petroleum Geologists and the Society of Exploration Geophysicists. He has over 40 years' experience in oil and gas exploration and development.

Chairman's Statement

Dear Shareholder,

I am pleased to report on the activities of the Group for the six months to 30 June 2015 and provide an update on recent progress. 2015 has been a busy year to date with significant work undertaken at Licence 61, together with our 50% co-venturer Oil India Limited, including the drilling of new production wells at Tungolskoye, construction of tie-in infrastructure, acquisition of new seismic data and the drilling of a key delineation well at Sibkrayevskoye. Current gross production at Licence 61 is approximately 2,700 bopd, an increase of 46% in the year to date.

Production and Sales

Gross production at Licence 61 in the six months to 30 June 2015 averaged 1,744 bopd, a 19% decrease compared to the same period in 2014 (2,163 bopd). The decrease was as a result of natural decline and the fact that the new production wells at Tungolskoye and West Lineynoye did not come online until Q3 2015. We sold 329,733 (gross) barrels of oil in the six months to 30 June 2015 (H1 2013: 391,379 bbls) and achieved an average oil price of $29.87 (H1 2014: $44.79). The fall in price is reflective of the challenges being faced across the oil and gas industry.

Gross production at Licence 61 has grown by 46% in the year to date and is currently approximately 2,700 bopd. Most of the production growth in 2015 came from the T-503 and T-502 wells at Tungolskoye which came online in July and September 2015 respectively.

Tungolskoye

Early in 2015 we successfully completed the Tungolskoye No. 5 (T-5) well which demonstrated the higher levels of productivity that can be achieved in horizontal wells and gave us the data required to sanction the development of the Tungolskoye oil field.

While the T-5 well achieved high initial oil flow rates it subsequently demonstrated a high water cut. Further examination indicated that the water was likely coming from a transition zone below the main producing horizon where the horizontal segment of the well had been targeted. We determined that this risk could be substantially mitigated by focussing future horizontal wells primarily on the J1-1 horizon.

The development of Tungolskoye entailed the construction of a 25 km pipeline and utility line to connect back to the Central Processing Facility ("CPF") at Lineynoye. Drilling of new wells commenced in May 2015 using SGK Drilling, a subsidiary of Eurasia Drilling, Russia's largest drilling company. The rig used was a production drilling rig fitted with a top drive unit that enables faster and more efficient drilling of long-reach horizontal segments.

We have drilled two horizontal and three vertical wells at Tungolskoye up to 28 September 2015 and anticipate two more horizontal wells and one vertical well to be completed by the end of the year. The T-503 and T-502 wells both had horizontal segments of approximately 1,000 metres and both achieved net pay of about 65% in the horizontal segment. The horizontal segment of both wells was drilled in the J1-1 horizon only, building on the lessons learned from the T-5 well. The average flow rates for the first 14 days post clean-up were 499 bopd and 481 bopd respectively with a water cut of less than 10% on both wells. The three vertical wells drilled to date (T-51B, T-508 and T-507) were to provide stratigraphic confirmation prior to drilling the next horizontal well and, in the case of T-51B, will be used as a water source well, and water injection wells in the case of the remaining vertical wells. The T-501 horizontal well is currently being drilled and we hope to bring it on production in late October.

Arbuzovskoye

In the early part of 2015 we completed a five well production drilling programme at Arbuzovskoye. The most important result was the A-103 vertical well which was drilled as far south as possible from Pad 1. The aim of this well was to enhance our understanding of the southern portion of Arbuzovskoye before committing to the construction of a second pad there.

The well came in 15 metres high to prognosis and produced an initial rate of 125 bopd. This result, combined with some new 2D seismic data acquired in 2015, has given us the confidence to plan for a second pad at Arbuzovskoye which will likely see the drilling of two to three horizontal wells in 2016. The pad is currently under construction. Given the thicker pays and better quality reservoir rock that we have seen at Arbuzovskoye as compared to Tungolskoye and the lessons learned from the horizontal drilling at Tungolskoye, we are targeting superior results at the south Arbuzovskoye pad in 2016.

Sibkrayevskoye

In the first half of 2015, we drilled the S-373 delineation well at Sibkrayevskoye. The well confirmed over ten metres of net oil pay and achieved a stabilised natural flow of 100 bopd from a cased hole test. We expect to bring this well into production for the winter of 2015/16.

We also acquired 1,000 km of high resolution 2D seismic data in the northern portion of Licence 61. The primary focus of the seismic was at Sibkrayevskoye and Emtorskaya as well as some other smaller leads and prospects in the area. The acquisition of data was completed in April 2015 and the data is currently being processed and interpreted. All previous seismic data and exploration well logs will also be re-processed and interpreted in order to have a single consistent database of the seismic and well data. While the interpretation process is not yet complete, initial results indicate that the Sibkrayevskoye oil field is considerably larger than previously mapped and the Emtorskaya prospect is also larger and better defined than previously mapped.

The S-373 result combined with the new seismic should lead to a significant reserve upgrade at year-end.

West Lineynoye

In July 2015 we announced the result of the L-10 horizontal well at West Lineynoye. The well was drilled close to the L-8 well which has been producing for several years. As the well was drilled with an exploration drilling rig with no top drive it was only possible to drill a horizontal segment of about 265 metres. Of this 55 metres was classified as productive net pay and the average flow rate for the first 14 days post clean-up was 189 bopd. We had hoped to achieve a rate closer to 300 bopd but have learned lessons from the drilling of this and the T-5 well with exploration rigs that should enable us to drill longer horizontal segments in future, thereby achieving higher flow rates.

Review of PetroNeft loss for the period

The loss for the period was US$1.4m (2014: US$2.7m). The loss includes PetroNeft's share of the losses on the joint ventures relating to Licences 61 and 67 of US$1.8m and US$0.2m respectively. The loss relating to the Licence 61 joint venture is discussed in more detail below. Finance revenue of US$1.5m relates primarily to interest receivable on loans to the joint ventures.

Licence 61 joint venture - WorldAce Group

The metrics below are an extraction from the financial statements of the WorldAce Group which demonstrate the performance of Licence 61:

The detailed Income Statement and Balance Sheet of WorldAce Investments Limited is disclosed at note 7 to these condensed financial statements. Lower production and much lower oil prices have reduced the margin from 9.9% in 2014 to 3.2% in H1 2015. With the higher production being achieved in the second half of 2015 we should be able to improve the margin as many

of our production costs are fixed. Against the back drop of continued lower oil prices we are concentrating on trying to reduce costs and focus efforts and capital on areas that can provide additional near term production and operating cash flows for the Licence 61 joint venture.

As at 30 June 2015 WorldAce had cash at bank of US$2.5 million and had drawn-down US$41.5 million of the US$45 million Oil India investment. It is expected that the entire US$45 million will be drawn by the end of 2015. Based on current forecasts it should be possible to fund the development of south Arbuzovskoye from 2016 operating cash flows but additional funding would be required to advance other projects, such as Sibkrayevskoye, in 2016. The final work programme and budget for 2016 will be agreed with Oil India before the end of 2015.

Licence 67

During the first quarter of 2015, we agreed an exploration programme for Licence 67 for the next five years with the Russian authorities, the first significant expenditure required will be in 2017. We view Licence 67 as having considerable longer term potential and we are also discussing forward plans with our joint venture partner Belgrave Naftogas (Arawak Energy).

Director retirement

On 18 September 2015 Non-Executive Director, Vakha Sobraliev, retired from the Board of PetroNeft in order to concentrate on his other business interests. Mr. Sobraliev had been a director since November 2005 and introduced Licence 61 to the Company at its formation in 2005. He was also key to the establishment of the Company's operations and experienced team in Tomsk. On behalf of the Company and its shareholders I would like to place on record our appreciation for Vakha's service and advice over the years and in particular for his contribution to the original setup of operations in Tomsk. We wish him every success in the future.

Outlook

Whilst we have had an exceptionally busy year so far, with good success in growing production and our understanding of the Licence, market conditions are very challenging and there is little sign of improvement in oil prices in the near term. We still expect further growth in production this year from the remaining wells to be drilled at Tungolskoye and next year from the addition of new wells at south Arbuzovskoye. Our focus is on growing production, managing costs and positioning the Company for any improvement in the market conditions. We look forward to updating shareholders of our results over the coming year.

David Golder

Non-Executive Chairman

28 September 2015

Interim Condensed Consolidated Income Statement

For the 6 months ended 30 June 2015

Interim Condensed Consolidated Statement of Comprehensive Income

For the 6 months ended 30 June 2015

Interim Condensed Consolidated Balance Sheet

As at 30 June 2015

Interim Condensed Consolidated Statement of Changes in Equity

For the 6 months ended 30 June 2015

Interim Condensed Consolidated Cash Flow Statement

For the 6 months ended 30 June 2015

Notes to the Interim Condensed Consolidated Financial Statements

For the 6 months ended 30 June 2015

1. Corporate Information

The interim condensed consolidated financial statements of the Group for the six months ended 30 June 2015 were authorised for issue in accordance with a resolution of the Directors on 28 September 2014.

PetroNeft Resources plc ('the Company', or together with its subsidiaries, 'the Group') is a Company incorporated in Ireland. The Company is listed on the Alternative Investment Market ('AIM') of the London Stock Exchange and the Enterprise Securities Market ('ESM') of the Irish Stock Exchange. The address of the registered office and the business address in Ireland is 20 Holles Street, Dublin 2. The Company is domiciled in the Republic of Ireland.

The principal activities of the Group are oil and gas exploration, development and production.

 2. Accounting Policies

2.1 Basis of Preparation

The interim condensed consolidated financial statements for the six months ended 30 June 2015 have been prepared in accordance with IAS 34 Interim Financial Reporting.

The interim condensed consolidated financial statements do not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with the Group's annual financial statements as at 31 December 2014 which are available on the Group's website - www.petroneft.com.

The interim condensed consolidated financial statements are presented in US dollars ("US$").

2.2 Significant Accounting Policies

The accounting policies adopted in the preparation of the interim condensed consolidated financial statements are consistent with those followed in the preparation of the Group's annual financial statements for the year ended 31 December 2014.

3. Segment information

At present the Group has one reportable operating segment, which is oil exploration and production through its joint venture undertakings. As a result, there are no further disclosures required in respect of the Group's reporting segment.

The risk and returns of the Group's operations are primarily determined by the nature of the activities that the Group engages in, rather than the geographical location of these operations. This is reflected by the Group's organisational structure and the Group's internal financial reporting systems.

Management monitors and evaluates the operating results for the purpose of making decisions consistently with how it determines operating profit or loss in the consolidated financial statements.

Geographical segments

Although the joint venture undertakings WorldAce Investments Limited and Russian BD Holdings B.V. are domiciled in Cyprus and the Netherlands, the underlying businesses and assets are in Russia. Substantially all of the Group's sales and capital expenditures are in Russia.

Assets are allocated based on where the assets are located:

7. Equity-accounted Investment in Joint Venture - WorldAce Investments Limited

PetroNeft Resources plc has a 50% interest in WorldAce Investments Limited, a jointly controlled entity which holds 100% of LLC Stimul-T, an entity involved in oil and gas exploration and the registered holder of Licence 61. The interest in this joint venture is accounted for using the equity accounting method. WorldAce Investments Limited became a joint venture with effect from 3 July 2014. WorldAce Investments Limited is incorporated in Cyprus and carries out its activities, through LLC Stimul-T, in Russia.

Additional financial information in respect of PetroNeft's 50% interest in the equity-accounted joint venture entity is disclosed below:

7. Equity-accounted Investment in Joint Venture - WorldAce Investments Limited (continued)

The currency translation adjustment results from the change in the Russian Rouble during the period. All Russian Rouble carrying values in Stimul-T, the 100% subsidiary of WorldAce are converted to US Dollars at each period end. The resulting gain or loss is recognised through other comprehensive income and transferred to the currency translation reserve. The Russian Rouble depreciated significantly against the US Dollar during the second half of 2014 moving from RUB34.2:US$1 at 3 July 2014 to RUB56.5:US$1 at 31 December 2014 leading to a currency translation adjustment of US$23.8m in 2014.

8. Equity-accounted Investment in Joint Venture - Russian BD Holdings B.V.

PetroNeft Resources plc has a 50% interest in Russian BD Holdings B.V., a jointly controlled entity which holds 100% of LLC Lineynoye, an entity involved in oil and gas exploration and the registered holder of Licence 67. The interest in this joint venture is accounted for using the equity accounting method. Russian BD Holdings B.V. is incorporated in the Netherlands and carries out its activities in Russia.