Altona Energy Regulatory News (ANR)

31 January 2014 

Altona Energy PLC

("Altona" or the "Company")

Exciting future ahead for Arckaringa Project

Altona (AIM: ANR) today confirmed that in anticipation of the termination of the joint venture with China National Offshore Oil Corporation ("CNOOC"), it has already commenced a number of initiatives to progress the Arckaringa project:

· Identified and started discussions with potential new partners

· Parsons Brinckerhoff have been engaged to ensure that the bankable feasibility study ("BFS") is completed with the most cost-effective and relevant scope to maximise potential value:

o The Base case will now focus on joint Coal to Methanol and Coal to Liquids

o The report will cover how Altona could potentially joint venture on infrastructure development with third parties

· Started work on the regulatory approvals required for the reassignment of the 51% interest

Altona's Chief Executive, Chris Lambert, said: "As I promised in the Chairman's year end statement and announced to shareholders at our recent AGM, I have been getting straight down to work to minimise any further delays at Arckaringa. Working with CNOOC was becoming an increasingly frustrating experience all round, particularly for our shareholders, and we are excited to be talking to potential partners who are showing real dynamism and enthusiasm to work with us."

"In parallel we have commenced work with Parsons Brinckerhoff to ensure that the BFS will report on the world class potential that has always existed at Arckaringa and we believe that, by adding a focus on infrastructure to the BFS, we will further increase the viability of the project. It is as economically, environmentally and socially viable as it always has been, we are fully funded through the current licence period, and with the restraints removed, we can now move forward with real purpose once again."

In anticipation of the amicable termination of the joint venture partnership with CNOOC Altona started to work closely with Parsons Brinckerhoff, its Project Management Contractor Engineering consultancy firm, to ensure the Arckaringa project, which remains integral to South Australia's economic future, is fully focussed on maximising value for shareholders. To that end, Altona will ensure that the project focuses on South Australia's current and forecast fuel and energy requirements, maximises national and export market potential and develops infrastructure for the project with a view to attracting third-party users.

To achieve these aims, Altona will, alongside Parsons Brinckerhoff, review and potentially revamp the scope of the BFS. The review of the scope of the BFS will commence this week to ensure that the most compelling investment case is selected. Previously under the CNOOC operated joint venture, the Coal To Liquids and power generation scheme had been the main focus; however since becoming operator Altona's focus for the Arckaringa project will be on the joint Coal to Methanol and Coal to Liquids project, which has the ability to deliver a project with substantially enhanced economics.

Altona is also working with the South Australian and Commonwealth Governments on the regulatory aspects of the transition. In particular, once government have approved the transfer of CNOOC's interest back to Altona, early emphasis will be placed on a revamped drilling program, with a significant increase in activity from the current seven holes to a likely 31 holes, as earlier sought by Altona. Altona is already working with appropriate regulators in anticipation of this drilling programme.

The Company, with the support of Wintask and the South Australian Government via its "Invest in SA" agency, has identified some potential partners for the Arckaringa project. The Board is confident that the return to owning 100% of the Arckaringa project and the latter's status as one of the world's largest untapped energy banks, puts the Company in an excellent position and to this end we have initiated talks with potential interested partners for the project.

An additional focus of the engagement with Parsons Brinckerhoff will be to add a greater emphasis, within the scope of the BFS, into the potential to joint venture the development of certain infrastructure requirements of the project with other stakeholders. The Arckaringa project has a number of value-creating opportunities not only in supplying much needed commodities for consumption by South Australia but also by creating infrastructure that will be required by other South Australian commercial or state enterprises.

Parsons Brinckerhoff has therefore been requested to further investigate the development of a shared infrastructure model that could ultimately result in the creation of a separate Altona subsidiary with the capacity to joint venture with other stakeholders in South Australia. The project will identify those stakeholders who have an aligned interest in the success of the Arckaringa development because they stand to benefit from its myriad outputs and/or in shared infrastructure such as logistics, communications or accommodation infrastructure.

For further information, please visit www.altonaenergy.com or contact:

About Altona

Altona is listed on the London Stock Exchange's AIM market. Its focus is firmly on the evaluation and development of the Company's flagship coal-to-liquids Arckaringa Project to exploit the huge coal resources contained in three exploration licences covering 2,500 sq. kms in the northern portion of the Permian Arckaringa Basin in South Australia. The Project is designed to include a modern, combined-cycle power station adding 560Mw to the national grid and to produce clean burning fuel for Australia and the world from a resource equivalent to 7.8 billion barrels. 

About Parsons Brinckerhoff

Parsons Brinckerhoff is a leader in developing and operating infrastructure around the world, with 14,000 employees dedicated to meeting the needs of clients and communities in the Americas, Europe, Africa, the Middle East, Asia, and Australia-Pacific regions. The firm offers skills and resources in strategic consulting, planning, engineering, program/construction management, and operations for transportation, power, mining, water/wastewater, and community development projects. Parsons Brinckerhoff is the professional services division of Balfour Beatty, an international infrastructure services organisation that also provides construction services, support services, and infrastructure investments. (www.pbworld.com).

-ends-