Refinancing

Cardinal Resources plc
22 December 2006



LONDON -  22 December 2006


Cardinal Resources plc (AIM:CDL) ('Cardinal' or 'the Company'), an independent
oil and gas production and exploration company operating in Ukraine, today
announces that Cardinal and Silver Point Finance ('Silver Point') have amended
and restated the existing US$38 million bridge financing facility entered into
in December 2005 ('Bridge PIK Notes') and have increased the facility by US$17.5
million to US$55.5 million.

The revised Bridge PIK Note financing transaction will allow the Company to
access additional finance to continue its drilling and workover programme in
Ukraine in line with its business plan, which the Directors believe should
enable the Company to meet its stated production targets and fulfil its
financial obligations, thereby increasing shareholder value.

The Directors believe that shareholder value will be maximised through
achievement of two key objectives:-

   1.  Completion of the Rudis workovers and drilling programme together with 
       the tie in of the new and renewed wells to the new gas plant and 
       existing Ukrainian pipeline; and

   2.  Re-instatement of the Company's net profit interest in the
       Rudivsko-Chernovozavodske Field ('RC Field') to 45% 
       ('RC re-instatement').

Cardinal aims to achieve these two objectives within the next 6 to 12 months.

The Company has expanded the engagement of its nominated adviser, Nabarro Wells
& Co. Limited, to assist the Company in considering strategic alternatives to
maximise shareholder value. This exercise is expected to conclude after the
Company's work towards its two key objectives has progressed significantly.

Purpose of New Funding

The new funding will be used to:

   •   Accelerate the work programme on the 3 Rudis licence areas, on which 
       Cardinal owns the licences and controls operations;

   •   Re-instate the US$5 million recently drawn from the RC re-instatement 
       facility and restore the full $14.1 million facility for the 
       RC re-instatement; and 

   •   Settle fees and expenses relating to the transaction and provide for 
       general corporate and capital expenditure purposes.

The work programme on the Rudis properties for 2007 includes drilling four new 
wells and completing seven well workovers. In addition, the Company remains on
schedule to start the gas processing facility now being built to process gas 
from the Rudis properties.

Commenting on today's announcement, Robert J. Bensh, Cardinal's Chairman and
Chief Executive Officer said, 'The work programme on the Rudis properties is
progressing well. The additional funding from Silver Point enables Cardinal to
increase the pace of the work there to meet our production targets by the end of
2007. We are pleased Silver Point is willing to finance our development
programme and has confidence in supporting Cardinal in its growth plans in
Ukraine.'

Background

The Company announced on 27 November 2006 its need to access additional capital
both to fund its development of the Rudis properties and for the RC
re-instatement. In early December 2006, Cardinal drew down US$5 million of the
US$14.1 million facility which had previously been set aside for the RC
re-instatement, on payment of a fee to Silver Point. The US$5 million drawn down
has been reinstated as part of the revised Bridge PIK Note in order that
Cardinal will still have the funds to proceed with the RC re-instatement if this
becomes possible in 2007. As part of the US$5 million draw down, the Company and
Silver Point agreed to waive certain financial covenants under the Bridge PIK
Notes until 31 December 2006. Covenant waivers were necessary because Cardinal
has not yet been able to consummate the RC re-instatement during the course of
2006 as envisaged in December 2005 when the Bridge PIK Notes were announced.
With the agreement of Silver Point and as announced in March and May 2006,
Cardinal has been developing the Rudis assets acquired in September 2005 (which
Cardinal controls), rather than the RC Field assets, for the benefit of
shareholders.

The Directors were of the view that failure to access additional finance to
continue the drilling programme in December 2006 would prevent the Company from
executing its business plan which would damage shareholder value. Further, the
Directors were concerned that, if the revised Bridge PIK Note financing
transaction had not been entered into or if covenant waivers were not granted
beyond 31 December 2006, this could have resulted in the Company not being able
to meet its financial obligations as they fall due.

Summary of the proposed new and restated financing agreements

Cardinal today issued US$17.5 million in additional Payment-in-Kind (PIK) Notes
to Silver Point ('New PIK Notes'). Subject to potential adjustment mentioned
below, the New PIK Notes will carry a coupon of 15% per annum with interest
payable on a quarterly basis by issue of further PIK Notes (on the same terms)
or in cash, at Cardinal's option. The existing Bridge PIK Notes and the New PIK
Notes (together the 'Bridge Notes') will have to be redeemed in full by 31 March
2008, three months later than the original redemption date of 23 December 2007.

Cardinal Resources Finance Limited ('Cardinal Finance') - Cardinal's UK
subsidiary that holds the Company's assets - has issued a further 38.5 million
warrants to Silver Point to subscribe for further shares in Cardinal Finance
('New Warrants'). 7.7 million of these New Warrants became exercisable today and
the remaining 30.8 million New Warrants will become exercisable as to 20% (i.e.
7.7 million shares) every 91 days after today until all 38.5 million are
exercisable. If a refinancing of the Bridge Notes takes place prior to the right
to full exercise of the warrants having occurred, unexercised warrants will be
automatically cancelled. The right to exercise will occur in entirety on a
change of control of the Company, on an event of default, or on the RC
re-instatement. This provision allows Cardinal to access required funds to
continue the drilling programme whilst maximising flexibility for the Company to
pursue other financing alternatives. The right to exercise the warrants in
stages is designed to allow for any refinancing proposal completed within a
reasonable time frame to reduce the number of outstanding warrants arising from
the New PIK Note financing. The New Warrants will have a term of five years from
today at a subscription price equivalent to 20p. When combined with the existing
75.9 million Cardinal Finance warrants issued in December 2005 ('Existing
Warrants'), the New Warrants, if fully exercisable, will increase Silver Point's
rights to subscribe from approximately 32.2% of Cardinal Finance to
approximately 40.6% of Cardinal Finance on a fully diluted basis.

In tabular form, the position is as follows:


                             Before     22 December      After 91 days      A year later
                          signature            2006                         or on change
                       of financing                                           of control            
                        transaction                                            or the RC
                                                                           reinstatement

Shares in issue         114,554,108     114,554,108        114,554,108       114,554,108

Existing non PIK Note
related options and
warrants outstanding
(investors and
management)             46,331,300       46,331,300         46,331,300       46,331,300

Cardinal Resources   4,389,875 (at    6,289,875 (of      6,289,875 (of    6,289,875 (of
plc warrants                27.5p)  which 1,900,000 which 1,900,000 at  which 1,900,000
issued to Silver                            at 20p)               20p)          at 20p)
Point

Fully diluted
total at
Cardinal
Resources plc
level                  165,275,283      167,175,283        167,175,283      167,175,283

Cardinal Finance    75,948,391 (at   83,648,391 (of     91,348,391 (of  114,448,391 (of
Warrants at                 27.5p)  which 7,700,000   which 15,400,000 which 38,500,000
subsidiary level                            at 20p)            at 20p)          at 20p)

Fully diluted
total as if
Cardinal
Finance
warrants had
been issued as
Cardinal
Resources plc
warrants               241,223,674      250,823,674        258,523,674      281,623,674



Taken together, the new and the amended and restated financing agreements
provide inter alia the following:

   .   The term of the Bridge Notes is extended from 23 December 2007 until 
       31 March 2008.

   •   The coupon for the Bridge Notes will remain at 15%, unless regulatory 
       and shareholder approval to convert the Existing Warrants and the New 
       Warrants to Cardinal warrants is not obtained by 31 July 2007, in which 
       event the coupon increases from 15% to 20% per annum and the 20% coupon 
       will be retroactive on the Bridge Notes from today; charged by way of a 
       fee to Silver Point equivalent to that retroactive interest; and the 
       coupon will then be increased by a further 1% per annum for every 
       quarter after July 2007 until maturity.

   •   In addition, Cardinal has issued 1.9 million new warrants in the parent 
       company ('New PLC Warrants') to Silver Point at an exercise price of 20p.
       This exercise price represents a premium of 8.1% to the closing price of 
       Cardinal shares on 21 December 2006 and a premium of 60% to the closing 
       price of Cardinal shares on Friday 24 November 2006, the last business 
       day before Cardinal's announcement of 27 November 2006. The New PLC 
       Warrants will have a five year term from today. Silver Point will also 
       retain the 4,389,875 warrants over Cardinal shares granted on 1 December 
       2005 ('PLC Warrants') which remain at a price of 27.5p.  The term of 
       such warrants shall remain unchanged at 5 years from 23 December 2005. 
       In total therefore, Silver Point will have warrants to 5.2% of Cardinal's
       undiluted share capital.

   •   Both the subscription price for the Existing Warrants, at 27.5p, and the 
       term, 5 years from 23 December 2005, will remain unchanged.

   •   If all Existing Warrants and New Warrants (assuming all 38.5 million New
       Warrants were exercisable) were converted into Cardinal warrants, Silver 
       Point's interest in the Company - together with the PLC Warrants and 
       New PLC Warrants - would amount to approximately 42.9% of the Company's 
       fully diluted share capital. The equivalent figure at 23 December 2005, 
       before adjustment, was approximately 34%.

   •   As with the Existing Warrants, the New Warrants will have pre-emption 
       rights over new share issues by Cardinal Finance and tag along rights 
       in the event of any sale of Cardinal Finance. The New Warrants will 
       also carry the same put option as carried by the Existing Warrants 
       allowing sale of the New Warrants to Cardinal in the event of a change 
       of control of Cardinal or on the expiry of the applicable five year 
       warrant term, at a price equal to the percentage of the Company's value 
       that the warrants represent (assuming full exercise) less an amount 
       equal to the subscription price payable upon exercise. In the case of a
       change of control, to the extent that consideration is non-cash, Cardinal
       is entitled to satisfy amounts due under the put option with a 
       proportionate share of such consideration. The change of control 
       provisions of the Existing and the New Warrants are designed to place 
       the Existing Warrants and the New Warrants in a similar position to a 
       holder of PLC Warrants; however, they do not represent any barrier to 
       a change of control. Silver Point has the right to transfer Cardinal 
       Warrants without restrictions and Cardinal Finance warrants subject to
       Cardinal's pre-emption rights.

   •   Silver Point will now have the right to appoint one Observer to each of 
       the Boards of Cardinal and Cardinal Finance; but no longer has a right 
       to two Board seats. The right to appoint an Observer will cease when 
       Silver Point holds less than 25% of the Cardinal Finance warrants.

   •   On Admission the Company stated that it would seek capital growth through
       reinvestment of cash flows and that dividends would be unlikely in the 
       early years. The Directors have not recommended a dividend since 
       flotation and both the Company's distributable reserves and the terms 
       of the PIK Note preclude it.  Cardinal will have the right to redeem the
       Bridge Notes and New PIK Notes beginning 23 December 2006,(i) at a price
       of 120% until 21 December 2007; and (ii) thereafter,on payment of an 
       early redemption fee of 50% of remaining annual interest due at the time 
       of the redemption.

   •  The arrangement fee for the New PIK Notes is 4% of the facility amount.
      The commitment fee on the US$14.1 million for the RC re-instatement has 
      risen to 2.45% from 1%.

As a result of a term of the Silver Point Bridge PIK Note which confers a voting
right but no economic interest in Cardinal Finance, Silver Point is regarded as
a related party of Cardinal for the purposes of AIM Rule 13.

After exploring available alternatives and taking into account the forthcoming
covenant waiver deadline of 31 December 2006, the Directors of Cardinal
consider, having consulted with its nominated adviser, that the terms of the
transaction are fair and reasonable insofar as its shareholders are concerned.

                                     ###


For further information please contact:

Cardinal Resources                             Brunswick Group
Charles Green / Franziska Stahlknecht          [phone]
[phone]                           [e-mail]
[e-mail]             

Nabarro Wells & Co. Limited
John Wilkes / Marc Cramsie
[phone]
[e-mail]

Notes to Editor

Cardinal Resources plc

Cardinal Resources plc is an independent oil and gas production and exploration
company with assets in Ukraine. Cardinal is an experienced operator in the
country focused on expanding its existing operations through the farm-in or
acquisition of additional upstream oil and gas assets that can be further
developed through the application of modern technology and expertise.

Silver Point Finance

Silver Point Finance structures and provides custom financing for large and
middle market companies across all industries.

                                      ###

This release may contain certain forward-looking statements. These statements
relate to future events or future performance and reflect management's
expectations regarding Cardinal's growth, results of operations, performance and
business prospects and opportunities. Such forward-looking statements reflect
management's current beliefs, are based on information currently available to
management and are based on reasonable assumptions as of this date. No
assurance, however, can be given that the expectations will be achieved. A
number of factors could cause actual results to differ materially from the
projections, anticipated results or other expectations expressed in this
release. While Cardinal makes these forward-looking statements in good faith,
neither Cardinal, nor its directors and management, can guarantee that the
anticipated future results will be achieved.


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