Interim Results and Operational Update

PETROCELTIC INTERNATIONAL PLC

Interim Results and Operational Update

Six months ended June 30th, 2011

Petroceltic International plc ("Petroceltic" or "the Company"), the upstream oil and gas exploration and production company focused on Middle East, North Africa and the Mediterranean region is pleased to announce its Interim Results for the six months to 30th June 2011.

HIGHLIGHTS

·; Enel $100 million plus investment underscores scale and value of Ain Tsila discovery

·; Enlarged Algeria appraisal programme in progress with further results due in September

·; Entry to highly prospective blocks in Kurdistan Region of Iraq in partnership with Hess Corporation

·; Transfer of operatorship of Carisio Permit in Western Po Valley to ENI

·; Successful placing in May raised $60 million

·; Strong cash position with balance of $90 million at 30th June 2011

·; Current cash balance of $84 million and no debt

Commenting, Brian O'Cathain, Chief Executive, said:

"Petroceltic's asset portfolio has been considerably strengthened over the last 12 months by the Ain Tsila appraisal programme, the $100 million plus farm-out to Enel and our country entry into the Kurdistan Region of Iraq. Algerian drilling operations will see at least three further well results and four test results completed in the next six months, and our objective is to maintain and exploit the momentum created in this world class discovery. Although stock market conditions in recent months have presented challenges to all companies, Petroceltic has the team, the assets and the funding to deliver our ambitious growth objectives and create significant value for our shareholders."

For further information, please contact:

Petroceltic

Brian O'Cathain Chief Executive Tel: +353 (1) 421 8300

Alan McGettigan Finance Director

Pelham Bell Pottinger

Philip Dennis Tel: +44 20 7861 3919

Jenny Renton Tel: +44 20 7861 3883

Murray Consultants

Joe Murray Tel: +353 (1) 4980300

Joe Heron

Davy

Hugh McCutcheon Tel: +353 1 6796363

John Frain Tel: +353 1 6796363

Dr. Dermot Corcoran, Head of Exploration, Petroceltic International plc, is the qualified person who has reviewed and approved the technical information contained in this announcement. Dr. Corcoran has a B.Sc in Geology, a M.Sc. in Geophysics, and a Masters degree in Business Administration, all from the National University of Ireland, Galway. He also holds a Ph.D in Geology from Trinity College, Dublin. Dr. Corcoran has over 20 years experience in oil & gas exploration and production, and has previously worked at ExxonMobil, the Petrofina Group, and Statoil.

Notes to Editors:

Petroceltic International plc is a leading Upstream Oil and Gas Exploration and Production Company, focused on the Mediterranean, Middle East and North African area, and listed on the London Stock Exchange's AIM Market and the Irish Stock Exchange's ESM Market. The Company has exploration and appraisal assets in Algeria, the Kurdistan region of Iraq and Italy.

Chairman and Chief Executive's Statement

We are pleased to present Petroceltic's Interim Report for the six months ended 30th June 2011. Significant progress has been made from both an operational and financing perspective that will accelerate the development of the Company's existing portfolio in Algeria and Italy, in addition to the broadening of the Group's asset base through the acquisition of a 20% interest in two highly prospective blocks in the Kurdistan Region of Iraq.

Operations Update

Algeria

The Company's operational focus continues to be in Algeria through the ongoing appraisal of the world class Ain Tsila discovery and the introduction of an outstanding new partner to the Isarene PSC ("PSC").

Farm-out of 18.375% interest to Enel

In April, Petroceltic signed an Agreement with Enel Trade S.p.A. ("Enel") under which Enel acquired an 18.375% interest in the Isarene PSC from Petroceltic. Upon completion of the farm-out, Petroceltic will hold a 56.625% interest in the PSC and continue as Operator. Enel will hold an 18.375% interest and Sonatrach will hold the remaining 25%. Enel is one of the largest European energy utilities and is the second largest buyer of Algerian gas. Enel's unparalleled knowledge of European gas markets combined with its historic relationship with Sonatrach makes it an ideal partner for this phase of the Isarene development project. In addition to the capital investment, this strategic alliance should provide substantial support for the future marketing of Isarene gas.

Under the terms of the farm out agreement, Enel has agreed to pay up to US$101 million towards work programme expenditure incurred by Petroceltic. This payment represents the aggregate of i) Enel's share of the back costs, incurred from the signing of the PSC in 2005 until the end of the exploration period in April 2010; and ii) a contribution of 49% of the cost of the first six appraisal wells in the current enlarged Isarene appraisal campaign. In addition to these payments, Enel has agreed a contingent cash consideration payment of up to a maximum of US $75 million, to be determined by the level of recoverable reserves approved by the Algerian Authorities in the Final Field Discovery Report which is expected to be submitted in early 2012. Should the entire contingent amount be payable, the maximum potential expenditure by Enel to acquire an 18.375% interest in the Isarene block is in excess of US$183 million.

This transfer of interest is subject to certain conditions, including the signature of the amendment to the PSC, which was duly executed on 28th April 2010. The sole condition which remains outstanding relates to the ratification of the amendment by Executive Decree of the Council of Ministers in Algeria. This is an administrative process which does not involve or require any further examination of the terms of the agreement and we remain confident that this ratification will be received during the third quarter.

Upon ratification, Petroceltic will receive in excess of US$74 million as an initial payment (assuming ratification in the next month) from Enel, comprising back costs and their 49% share of the 2011 appraisal campaign costs incurred to date. The initial payment will be settled by Enel within 30 days following ratification. Following completion, Enel will contribute their 49% share of ongoing appraisal costs on a monthly basis, payable in advance.

Enlarged Appraisal Campaign Continuing

The current appraisal drilling campaign commenced in November of 2010, and follows the Company's highly successful 2009/10 five well programme. Following the agreement of the Enel farm-out, the initial appraisal programme has been enlarged to include a minimum of six wells.

In May 2011, Petroceltic entered into a contract for drilling rig services with KCA Deutag. Their Nomad class drilling rig T-211 was contracted to work alongside the Dalma Rig LR-12 on the Ain Tsila Field programme. The addition of this second rig has facilitated an increase in the pace and scope of the appraisal campaign.

Drilling and testing operations have continued throughout the period with two rigs and a rigless testing and fracture stimulation unit currently deployed in the field. The key objectives of the appraisal programme are to confirm the most likely recovery factors for the field, to optimise the development plans and to establish the likely plateau production profiles for the gas sale contract negotiations.

The first three wells of the programme AT-4, AT-5 and AT-6 have all encountered gross gas columns that were in excess of the pre-drilling prognosis and these results are likely to have a positive impact on the Gas Initially In Place volumes for the field. The Company expects to publish an updated view of the Gas Initially In Place in the field after the completion of the current round of appraisal drilling and testing.

Although the recent test result from the AT-5 well was below expectations, it achieved a commercial flow and provided important operational data in respect of the future design, drilling and testing of appraisal and development wells, and we look forward to a number of important well and test results over the coming months. AT-7 and AT-8, are currently drilling ahead to their target depths, while testing operations on the AT-6 well are due to be completed in early September. It is anticipated that all Field operations are scheduled for completion by December 2011 to allow for updating of the field model and development plan and the submission of the Final Field Discovery Report and preparation of an Independent Reserve Report in Q1 2012.

Kurdistan Region of Iraq

A critical component of Petroceltic's strategy to diversify and extend the Group's asset portfolio is the continuous review and evaluation of emerging provinces and high impact exploration opportunities. One of the primary areas of focus for Petroceltic over the last two years has been the highly prospective Kurdistan Region of Iraq, where a number of world class oil discoveries have recently been made. In July Petroceltic, in partnership with Hess Corporation ('Hess'), announced that it had entered into PSCs with the Kurdistan Regional Government of Iraq ("KRG") in respect of the Dinarta and Shakrok exploration blocks. This successful outcome for the Company has been achieved in the face of intense industry competition and has resulted from a persistent focus on the area over the past two years. The extensive preparatory work has included numerous visits to Kurdistan, field work and sampling programmes, detailed geological and regional studies and discussions with the Ministry of Natural Resources, Kurdistan Regional Government, local contractors and other stakeholders.

The Dinarta and Shakrok blocks are highly prospective undrilled blocks, in a proven play fairway, on trend with a number of recent oil discoveries. The blocks contain a number of identified surface anticlinal structures with multiple reservoir targets primarily of Jurassic and Triassic age. The prospective resource volumes associated with these structures is considered by Petroceltic to be very significant, in line with some recently reported oil discoveries in the region.

With respect to each PSC Petroceltic holds a 20% working interest (16% net participating interest). Hess holds an 80% working interest (64% net participating interest) and is the designated operator for each block. The remaining 20% participating interest is held by the KRG and is carried through all phases of activity.

Each PSC has an initial exploration period of three years and the work programme for this period includes 2D seismic acquisition and the drilling of a minimum of one exploration well per block. The preliminary timetable for the work programme indicates that extensive 2011 field work on each block will be followed by 2D seismic acquisition in 2012 with the drilling of the exploration wells expected later in 2012 or in early 2013. Petroceltic's overall financial commitment for the initial 3 year period of both licences totals approximately US$72 million.

Italy

In March this year Petroceltic signed an agreement for the transfer of operatorship of the Carisio exploration permit to ENI S.p.A. ("ENI"), in exchange for 2D seismic data and other technical studies on both the Carisio permit and the Ronsecco permit which lies adjacent and to the south. Both the Carisio and Ronsecco permits are located in an industrial region in Western Po Valley; approximately 30km west of the 250 million barrel ENI operated Villafortuna-Trecate oil field. The Villafortuna-Trecate field, which was one of the largest onshore oil fields in Europe in the early 90's, is now in decline and has existing production facilities and spare processing capacity that could be utilised in any subsequent development on the Carisio permit.

The data acquired in the deal with ENI will provide the basis for the planning of the material Rovasenda-1 well, and the possible farm-out of part of Petroceltic's interest in the Carisio permit. The Rovasenda-1 well is planned to commence between 4Q 2012 and 2Q 2013, depending on progression of the permitting process. Petroceltic is currently working with the operator, ENI, to ensure timely commencement of operations, whilst also ensuring that the process respects the needs of local stakeholders. The data also provides the Company with the means to assess the prospectivity in the Ronsecco permit, where Petroceltic currently holds a 100% interest.

Activity on Petroceltic's Central Adriatic B.R268.RG permit, which includes the Elsa discovery, continues to be delayed by the Italian Legislative Decree D.L. 128. This regulation, which passed into law in August 2010, prohibits drilling in the Italian seas within 5 nautical miles of the coastline and within 12 nautical miles around the perimeter of protected Marine and Coastal Parks. In order to protect the economic value of the permit, the Company was granted an initial six month suspension of the licence by the Ministry of Economic Development. However, as clarification of the interpretation and application of the degree is still under discussion, the company has now applied to the Ministry of Economic Development for a further suspension. Petroceltic and its partners have extended the existing agreements pertaining to the farm-out of this permit, which provided a total of US$26 million of funding towards the drilling of the Elsa-2 appraisal well.

Tunisia

Following the drilling results from the programme carried out on the Ksar Hadada Permit in 2010, and subsequent to an evaluation of the remaining prospectivity on the licence, Petroceltic transferred its participating interest in the permit to PetroAsian Energy Holdings Ltd, and the other participants in the licence on a pro-rata basis. The assignment was approved by the Tunisian authorities in early 2011.

Corporate

On 10th June 2011, Peter Dunne was appointed to the position of Company Secretary for the Group. Peter is a Chartered Accountant who joined Petroceltic in October 2009 as Corporate Finance and Commercial Manager, a role he continues to hold.

Financial

In May the Company successfully raised gross proceeds of approximately US$60 million (Stg£37 million) by way of a placing of 351,000,000 new Ordinary Shares at a price of Stg10.50p per share. The principal use of these funds is to fund the enlarged appraisal work programme in Algeria, agreed as part of the farm-out agreement with Enel, and for general corporate purposes, Following the receipt of these funds, the cash balance as at 30 June 2011 was US$89.6 million with no bank debt, while at 12 August 2011 overall cash balance amounted to approximately US$84 million.

The loss for the six month period was US$4.1m, a decrease from $4.9m for the same period in 2010. The decrease is due to a foreign exchange gain of US$271k arising in the period in comparison to a foreign exchange loss of US$1.2m for the corresponding period in 2010.

Capital expenditure during the six month period was US$49.6m which was primarily invested in drilling operations in the Isarene permit in Algeria.

Outlook

The first half of 2011 was primarily focused on:

·; the safe and timely progress of the enlarged appraisal drilling and testing work programme in Algeria;

·; the signature of the farm out agreement with Enel for a 18.375% interest in the Isarene block; and

·; the acquisition of an interest in two highly prospective exploration blocks in the Kurdistan Region of Iraq.

With Algerian drilling operations continuing and at least three further well results and four test results forthcoming over the next six months, our objective will be to maintain and exploit the momentum created. In the next six months we will focus on:

·; completion of our appraisal work programme in Algeria;

·; completion of the Enel farm-out and receipt of associated funds;

·; initiation of a further farm-out process in Algeria; and

·; commencing operations in the Kurdistan Region of Iraq in partnership with Hess.

Petroceltic has demonstrated its ability to conclude high-value transactions in respect of its Algerian interests, and to access exploration acreage in the Kurdistan Region of Iraq, an area of proven world class prospectivity. The support of shareholders has been critical to this, with a $60 million placing also completed. We look forward to continuing to grow our business through successful and safe operations and the focused pursuit of suitable business development opportunities.

 On behalf of the Board of Directors;

Robert Arnott Brian O'Cathain

Chairman Chief Executive