Update on Italian Offshore Legislation

Dublin

29 June 2012

Petroceltic International plc

Update on Italian Offshore Legislation

Decree DL 83/2012 (the "Decree") was published on 26 June 2012 in the Italian Official Journal. The new Decree modifies, and in some cases extends restrictions on offshore oil and gas exploration and production originally introduced by DLGS 128/2010 in August 2010. The Decree is effective immediately, but requires formal ratification by the Italian Parliament within 60 days, and may be amended during this period.

Under the Decree, the restriction applicable to offshore exploration and production activities under DLGS 128/2010 will now apply to activities up to 12 miles offshore the Italian coastline. The Decree also imposes an increase of 3% in royalties payable by offshore oil and gas producers. The proceeds of this additional Royalty will enable the Ministry for the Environment, and the Ministry for Economic Development, to support the monitoring and enforcement of marine environmental protection and supervision of environmental safety for exploration and production activities offshore Italy.

The Decree further clarifies the application of certain restrictions imposed under DLGS 128/2010. In particular, these provisions will no longer apply to:

(i) applications for production concessions that were under review at the time DLGS 128/2010 came into force, and any connected or subsequent proceedings;

(ii) any titles, including exploration licences that had already been issued prior to DLGS 128/2010 coming into force; and

(iii) any proceedings connected with or subsequent to such titles, including possible extensions of the same.

Petroceltic Italia S.R.L holds a number of interests which were in existence prior to the enactment of DLGS 128/2010. These include licence BR268, in which the Elsa field is located.

Brian O'Cathain, Chief Executive of Petroceltic commented:

"We are pleased that the Decree clarifies the regulations covering offshore oil and gas activities in Italy in general and in particular Petroceltic' s offshore interests. We fully support the provisions relating to the monitoring and enforcement of marine environmental protection and supervision of environmental safety for offshore exploration and production activities where Italy already has an exemplary record. These new measures will help address concerns about the potential impact of exploration and production on the marine environment, and provide a clear framework for the safe resumption of exploration and development of Italy's valuable natural resources to the benefit of the national and regional communities and economies."

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