Operational Update and Guidance

Dublin

7th January 2013

Petroceltic International Plc

Operational Update, 2013 Production Outlook and Capital Expenditure Programme

Petroceltic International plc (AIM: PCI) ("Petroceltic" or "the Company"), the oil and gas exploration, development and production company focused on North Africa, the Mediterranean and Black Sea regions, today provides an operational update and review of its 2013 production outlook and exploration and development work programme.

Highlights

 2012 production in-line with guidance; 2013 forecast production range of 25.0 to 27.0 Mboepd

 Ten firm wells planned over the course of 2013:

o Five Exploration wells across Egypt, Bulgaria, Romania and Kurdistan

o Five Development wells including completion of the Kaliakra discovery in Bulgaria and four development wells in Egypt

 World class Ain Tsila project moves into 30 year development and exploitation phase post final Algerian approval in December

 Upgrade of production facilities on West Dikirnis and West Khilala fields in Egypt on schedule

 North Tarif-1 Exploration well in Egypt plugged and abandoned

Brian O'Cathain , Chief Executive of Petroceltic commented:

"Today's announcement clearly demonstrates the scale and diversity of the Petroceltic business following the merger with Melrose Resources in October 2012. Our business is now generating strong cash flows, undertaking active exploration in five countries and moving into development of the world class Ain Tsila gas-condensate project. We anticipate an exciting year ahead, with a sustained exploration drilling program which offers exposure to a diversified portfolio of prospects including the company's first well in Kurdistan."

Investor Day

The Company will hold an Investor day in London on 11 February. Further information will be circulated closer to the date and all presentations will be available on the Company's website www.petroceltic.com.

Business Performance and Production Outlook

The merger of Petroceltic and Melrose Resources Plc was completed in October 2012 and the subsequent integration process has gone smoothly with productive sharing of knowledge and expertise. In particular, the complimentary production, development and exploration skills of both organisations have significantly enhanced the operating, technical and financial capabilities of the enlarged business.

Average 2012 production from the Company's interests in Egypt and Bulgaria was in line with prior guidance at approximately 28.5 Mboepd on a working interest basis. The average daily working interest production rate for 2013 is expected to be in the range of 25.0 to 27.0 Mboepd comprising approximately 85 percent gas and 15 percent liquids. Egypt and Bulgaria will contribute 80 per cent and 20 per cent of the total production volume respectively.

Throughout 2012 the Company received regular payments from production in accordance with agreed schedules in both Egypt and Bulgaria and the level of receivables in Egypt has now reduced by approximately one third from its historic peak. These consistently strong cash flows enabled year end net debt to be reduced to approximately US$210 million. The business remains well funded and Petroceltic has already commenced planning for the near term refinancing of its US$300 million bridge facility.

Capital Programme

An active exploration and development programme is scheduled for 2013 with a capital expenditure budget of US$150 million. Exploration drilling and seismic acquisition accounts for approximately 43 percent of the budget with the balance committed to development activities. The overall 2013 programme is summarised as follows:

Exploration

Petroceltic's exploration programme in 2013 comprises five firm exploration wells with one well in each of Bulgaria, Egypt and Kurdistan and two wells in Romania. Additional activity may also be undertaken in Italy, subject to the successful and timely conclusion of the environmental permitting process in respect of the Carpignano Sesia well in the Western Po Valley.

Egypt

In Egypt, drilling of the Mesaha frontier exploration prospect is currently underway. The well has a target depth of 9,900 feet and is currently drilling at approximately 5,000 feet. A further update on the progress of this well is expected during February.

Operational flexibility on the Egyptian rig schedule may also allow drilling of the Sinbelaywan well on the South East El Mansoura concession during 2013. This is an 8.7 MMbbl prospect, which would derisk other prospects in this Cretaceous play fairway, if successful. The Company may farm-down its interest ahead of finalising drilling plans.

The North Tarif exploration well on the El Mansoura concession did not encounter hydrocarbons and has been plugged and abandoned. This is the final exploration well on this mature concession and the exploration licence has now expired.

Bulgaria and Romania

The Company signed a letter of intent with Grup Servicii Petroliere S.A. in late 2012 for the provision of a jack-up drilling rig to perform four well operations in Bulgaria and Romania.

In Bulgaria, the Kamchia-1 well is currently scheduled to spud in April 2013. This 27 Bcf prospect is estimated to have a 40 per cent chance of success. 3D seismic has identified a further seven exploration leads and prospects in the vicinity of the Kamchia structure containing combined prospective resources of 102 Bcf of gas. Any discovery would be rapidly developed through the existing Galata infrastructure and facilities.

The Company plans to drill two wells offshore Romania, one on each of the Muridava and Est Cobalcescu blocks (Petroceltic 40 per cent working interest). The prospects to be tested by these wells remain subject to the on-going interpretation of the recently acquired 3D seismic data which has confirmed the presence of the main exploration plays identified in older vintage 2D seismic data. These include Eocene and Cretaceous oil plays and Pliocene and Miocene gas plays with the gross potential resources on the blocks estimated to be in the range of 1 Tcfe to 2 Tcfe. Recent success in adjoining blocks has significantly enhanced the prospectivity of this acreage and the prospect ranking and selection process is currently in progress.

Kurdistan

In Kurdistan, the principal 2013 activity will comprise the drilling of the Shakrok anticline on the Shakrok licence where seismic operations are now complete, with processing ongoing. This prospect, for which a rig has already been contracted, has a scheduled spud date of July 2013 and anticipated duration of approximately 5 months.

There will also be significant work on the Dinarta Block, where seismic activities are expected to resume by April 2013 with a view to finalising a prospect for late 2013 drilling. Rig tendering for a second rig is complete and a rig contract is close to finalisation.

Development

Algeria

Petroceltic's Declaration of Commerciality in respect of the Ain Tsila project was approved by Alnaft in December 2012. This approval enables Petroceltic (56.625 per cent), along with its joint venture partners Sonatrach (25 per cent) and Enel (18.375 per cent), to move into the 30 year development and exploitation phase of the licence, including formalising the operations of the "Groupement" or integrated development team. The planned first gas date for the project remains October 2017 and Petroceltic is currently finalising the appointment of an experienced field development project manager to deliver on this schedule.

Receipt of the Alnaft approval will also support the Company's plan to book commercial reserves in relation to the Ain Tsila project, and to finalise arrangements relating to the contingent consideration due under the Enel farm-in announced in 2011. Further announcements in relation to both these items will be made in due course. Petroceltic also remains committed to undertaking a further 18.375% farm down of its interest in this asset during 2013.

Egypt

The majority of the planned development expenditure, some US$48 million, is allocated to the Company's main producing fields in Egypt. Approximately 50 per cent of this expenditure will go towards the completion of the West Dikirnis Refrigeration and West Khilala compression projects initiated in 2012, along with routine facility enhancements. Both projects remain on schedule with the West Dikirnis project currently entering the commissioning phase and the West Khilala on track for completion bymid year. The remaining 50 per cent is in respect of ongoing development drilling activity on the South Damas, West Dikirnis and West Khilala fields, where a total of four wells is planned.

The first of these development wells has recently commenced on the South Damas gas field in the South East Mansoura concession. This field has out-performed since inception and the additional production well is required to effectively access the proved plus probable reserves of 50 Bcf.

Bulgaria

Development operations in Bulgaria will comprise the completion of the suspended Kaliakra discovery well to achieve production in mid 2013. This operation, coupled with the reinstatement of production from the Galata field, should allow the Company operational flexibility to achieve its 2013 production target.

Petroceltic has also recently signed amendments to its gas sales contracts, with Bulgargaz EAD, the state-owned gas utility company, and Agropolychim, an independent industrial consumer, for the sale of all of its 2013 production. The received price is expected to average approximately US$8.50 per Mcf as compared to the average realised price of US$8.27 per Mcf in 2012.

Ends

For further information, please contact:

Brian O' Cathain /Tom Hickey, Petroceltic International Tel: +353 (1) 421 8300

Philip Dennis / Rollo Crichton-Stuart,

Pelham Bell Pottinger Tel: +44 (20) 7861 3919

Joe Murray / Joe Heron, Murray Consultants Tel: +353 (1) 4980300

John Frain, Davy Tel: +353 (1) 679 6363

Dr. Dermot Corcoran, Head of Exploration, Petroceltic International plc, and the qualified person as defined in the AIM Note for Mining and Oil and Gas Companies, June 2009, 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 North Africa, Mediterranean and Black Sea Regions, and listed on the London Stock Exchange's AIM Market and the Irish Stock Exchange's ESM Market. The Company has production, exploration and development assets in Algeria, Egypt, Bulgaria, Romania, the Kurdistan Region of Iraq and Italy.