Interim Results

Petrel Resources PLC
30 September 2003

                              PETREL RESOURCES PLC



     PETREL THE AIM LISTED IRAQI OIL EXPLORER ANNOUNCES INTERIM RESULTS

Western military are sitting on the world's energy treasure chest.  But they
can't open the lid.  We can.  We carry no baggage.  The sanctions and the
secrecy have gone.  Iraq's oil industry must recover.  No western group is
better positioned.  Now is the time.


I returned from Iraq to coordinate with our European technical staff, as
communications remain difficult and insecure.  Much of the new material provided
is confidential and potentially of high commercial value.  We have been
inundated with farm-in proposals from international oil majors.  After six years
of preparation, and successfully negotiating unusual risks, we will make the
most of developments without educating potential competitors.


Our exploration programme in the western desert proceeds.  Mapping and satellite
imaging is underway.  Geological sampling will start as soon as it is safe.  We
are hiring top people.


We are also in detailed discussions on participation in early oil field
development.  Petrel is now pre-qualified, even for giant projects.  I have been
invited to Baghdad three times since June for detailed discussions.  Our
technical people have met dozens of times with Ministry counterparts.  Officials
are most comfortable with people they know.  They seek friends they can rely on,
rather than suppliers who may plead force majeure.  Engineers need to solve
engineering problems.  They lack the time and inclination to educate new players
about Iraq.


Prevailing circumstances are not conducive to oil majors: Exxon Mobil's Chairman
confirmed today that they will not be investing in or despatching foreign
employees to Iraq unless the situation stabilises.  The French Embassy advised
Total-Fina-Elf against working on the ground.


An irony of a campaign fought at least partly to secure energy supplies is that
it put those supplies in jeopardy.  Halliburton and Bechtel contractors operate
only under armed guard.  By contrast, Petrel staff, both Iraqi and
international, travel all over the country, visiting oilfields, tribal groups
and officials.  The majors' work is frozen.  Our work proceeds at accelerated
pace.  We have maybe two years of effective head start as a junior with
excellent local relationships.  We will exploit that advantage by working with
the excellent officials of the Iraqi Ministry of Oil, to play our part in the
necessary development of Iraqi oil.


Actions speak louder than words: we returned to Baghdad as soon as Ministry
officials confirmed they were at their desks.  They confirmed that we were the
first foreign oil company to appear.  Much of their data is destroyed.  We
returned their original seismic and other data.  We were also the first company
to re-start fieldwork, hire and confirm willingness to develop oilfields under
prevailing circumstances.  While others contemplate, we act.


There has been an excellent response from Iraqis of all sects and political
views.  A western neutral has no enemies and no baggage. Data formerly secret is
now open to our technical staff.  Previously unavailable technical material
about rumoured deep wells is now shared.  The world has changed.


Iraq is a kaleidoscope of differing loyalties and aspirations.  But any
administration will have the same objectives: to maximise early cash flow from
oil production with international partners who respect their values and deliver.


It is a time of danger but also opportunity in Iraq.  The problem must be fixed,
which means that the oil must be developed.  No western company is better placed
to participate in this noble project.


Post war Coalition policy in Iraq has not worked.  The oil industry - and
infrastructure generally - operated better pre-war under more trying
circumstances.  Because of the security situation, neither the CPA (Coalition
Provisional Authority) nor the interim Governing Council can function as an
effective government.  Accordingly, responsibility falls back on the 'permanent
government' of ministry officials, committed to re-building Iraq as a sovereign
state.


To calm things and establish a legitimate government Iraq needs early free
elections.  This may not give westerners the result they crave, but it's better
than the alternatives.  On balance, a free and fair process, open to as many
groups as possible, is now the best policy.


Fixing the problem

Iraq has to be fixed: it has too sensitive an address and has too much oil to
continue in chaos.


Few are nostalgic for Saddam's failed economic policy or repressive rule.  Yet
the regime change hasn't worked either.  Most Iraqis are freer but less safe and
worse off than before.  Only the professional army and police can deliver
security.  Slowly the Coalition reverses original policy by re-hiring former
police and military, as well as key managers associated with the previous
regime.


The USA needs a regional presence to influence regional players and secure oil
supplies.  Thinking nationalists realise that a precipitate withdrawal - in the
absence of strong Iraqi security services - would risk Lebanonisation and civil
war.  The solution is for the US military to withdraw into the former British
colonial bases.  This would end civil disturbance, while securing regional oil
flows and deterring foreign threats.


Everything depends on restoring and expanding oil flows.



Oil industry

Postwar oil-field pacification and reconstruction policy has failed.  Oil
production is roughly a quarter of the 1990 level, and still - after 6 months -
only 40pc of the pre-invasion level.


Urgent reform is necessary.  Without oil there is no electricity, no money and
few well-paying jobs.  Many key managers are prepared to work with interim
authorities to minimise further suffering.  Formerly the skilled 'permanent
government' feared elections as likely to bring fundamentalists to power.  Now
they increasingly support immediate and free elections as the only way to
establish a legitimate government.



Exploration: Block 6 work programme

Ministry executives were delighted to welcome us and receive the seismic and
velocity originals.  They recommended the authorities proceed with finalised
contracts and expect early progress.


They suggest establishing joint teams as the work moves forward: we accepted
their proposal to send (subject to approvals) a number of top scientists to work
with our team.  They have pieced-together roughly 40pc of the well core and
other materials damaged in post-war looting, which will assist detailed mapping
exercises as well as seismic re-interpretation.  They want to work with us
closely, having early and ongoing input rather than hearing our conclusions at
the end.


Previously, large-scale maps were military secrets.  Now government officials
generate topographical, geological and other specialist maps for Petrel.  We
also generate maps from satellite imagery.


The geological field-sampling programme is underway using Iraqi experts.  The
loss of so many quality people from the ministries is a boon for international
investors.


Block 6 is located in the relatively unexplored Palaeozoic Basin of western
Iraq.  Mature oil and gas source rocks occur in Silurian and Middle Ordovician
sediments

.  Proven plays occur in reservoirs of Carboniferous, Silurian and Ordovician
age.


We mapped four major Prospects from seismic lines: Prospects A & D include
deeper Ordovician Palaeo-structural plays, with gas and condensate potential of
Basal Silurian & Ordovician source rock.  Prospect B includes Silurian,
Carboniferous-Devonian, and Permian Triassic Structural plays with oil & gas
potential of Basal Silurian source rock.


Prospect C includes Stratigraphic plays from Silurian source rock below, and/or
down-dip Mesozoic source rocks to the east of the block in the Mesopotamian
Basin.  Further seismic and fieldwork will delineate the prospects' structure
and fine-tune drilling locations.


We plan a deep (5000 metre) well to test potential prospects & plays.



Block 6 is sensitive because of the large structures confirmed by seismic.  If
they are hydrocarbon bearing they will be as large as (giant) river valley
discoveries.  Our block is considered to be best western desert block, though
there are already discoveries on Block 8 (signed by the Indian National Oil
corporation ONGC-Videsh).


Oilfield visits

We were invited by the Oil Ministry to examine a number of potential oilfield
projects.

We visited world-class fields, in the north, south and centre, to assess damage
and prepare for development work.  There is extensive damage to the fields.
Capacity was degraded by sanctions.  The war triggered looting, which collapsed
the system.  Much of the surface engineering is a write-off.


In the coming weeks we will prepare a tender for one or more of these fields.


Next Steps

We will advance as fast as possible with both exploration and the refurbishment
and development of existing oilfields.



David Horgan
Managing Director
September 30, 2003


                        PETREL RESOURCES INTERIM RESULTS 2003
                                                                           
     Financial Information (Unaudited)                                     
                                                      Six Months Ended      
                                                   30.06.03       30.06.02 
                                                     €'000         €'000 
     Group Profit and Loss                                                 
     Operating Profit / (Loss)                       (100)          (117)  
     Investment Income                                 0              0    

     Profit / (Loss) before Taxation                 (100)          (117)  
     Taxation                                          0              0    

     Profit / (Loss) for the period                  (100)          (117)  

     Profit / (Loss) per share                      (.20c)         (.28c)  


                                                   30.06.03       30.06.02 
                                                     €'000         €'000 
     Group Balance Sheet                                                   
     Fixed Assets                                    1,167          1,036  
     Current Assets less Current Liabilities         (104)           25    
                                                     1,063          1,061  
  
   Share Capital and Reserves                        1,063          1,061  


Copies of this announcement will be sent to shareholders and will be
available for inspection at the Company's registered office at 162 Clontarf
Road, Dublin 3, Ireland. 

                                                                              
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Petrel is traded on AIM inLondon(PET)




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