Altona Energy Regulatory News (ANR)

17 August 2011

Altona Energy Plc (AIM: ANR)

PRC Confirmation of Arckaringa Coal Assets

Highlights

·; Evaluation report confirming the quality and extent of the Arckaringa coal resources issued by applicable authorities in People's Republic of China ('PRC' or 'China')

·; Evaluation report follows completion of assessment of coal feedstock at Wintinna deposit (EL 4512) for the Arckaringa coal-to-liquids ('CTL') project undertaken by China National Administration for Coal Geology ('CNACG')

·; Report findings concur with Altona prefeasibility study on coal feedstock qualities and suitability for processing to energy/fuel

·; CNOOC-NEIA completed all site assessments in preparation for Arckaringa field work programme

- Applications for relevant licences and permits from South Australian Government currently being finalised

- Approvals process expected to be complete Q4 2011 with work commencing immediately thereafter on site

- Work programme focused on EL 4512 area (Wintinna)

- Assessment to be made on viability of wide range of coal products (including gasification and briquetting)

·; Economic and technical assessment studies are ongoing in China on the options for coal conversion (including CTL and power) and for the selection of the preferred energy and fuels plant configuration

Altona Energy Plc ('Altona' or 'the Company'), the AIM-listed Australia based clean energy company, announces that an Evaluation Report has been issued by applicable authorities in China, that confirms the quality and extent of the coal deposits which underpin the Arckaringa CTL and power project. This Evaluation Report is addition to the CNACG reports which confirmed the findings from Altona's previous studies on the Arckaringa Project. Following receipt of these reports, the Arckaringa Joint Venture ('JV') partner and project manager, CNOOC-NEIA, has established work structures and mobilised additional staff in Beijing and Adelaide in preparation for the next stage of bankable feasibility study ('BFS') development during 2011.

The CNACG reports were commissioned by CNOOC-NEIAcovering the extensive geological, hydrogeological and geotechnical data assembled from past studies for the assessment of the coal feedstock at EL 4512 (Wintinna deposit) to Chinese standards and in preparation for detailed technical studies during the BFS. The first of these technical studies, also completed by CNACG, covers the design of the forthcoming field programme. The positive outcomes from these reports have enabled CNOOC-NEIA to assemble a multidiscipline project team and relocate staff from China to a new office with Arckaringa Energy personnel in Adelaide, forming the South Australian based JV Operating Team. Victor Li is the General Manager of CNOOC-NEIA and is the Project Leader and Head of the Operating Team.

Overseen by CNOOC-NEIA, the next stage of the Arckaringa work programme is scheduled for implementation by the end of 2011, pending approvals and permits from the South Australian Government and relevant agencies. The approvals process is underway with exploration works approval and other permitting requirements having been through preliminary review by the South Australian Government ahead of formal submission, due to take place by the end of August 2011. Consultation with local stakeholders is also underway and forms part of an ongoing community relations programme conducted over the five years since Altona's entry into the region.

2011-2012 CNOOC-NEIA Work Programme

Prefeasibility level economic and technical assessment studies are ongoing in China on the options for coal conversion (including CTL and power), and optimum development of the BFS. In addition, CNOOC-NEIA Beijing personnel, in conjunction with leading Chinese consultants, are carrying out the technical and economic studies for the selection of the preferred energy and fuels plant configuration. A fieldwork programme focussed on the EL 4512 (Wintinna) area will feed further data into these assessment studies. The field work at Wintinna will include:

§ Close spaced coal and geotechnical boreholes in the proposed initial mine development area, for the purposes of firming up mine design parameters and upgrading the JORC resource estimates

§ Extraction of bulk samples of coal for testing in China and Australia, with the main purpose of finalising coal feedstock characteristics for a range of coal conversion options (including gasification, coal drying, briquetting etc)

§ Detailed hydrogeological testing to refine the existing hydrogeological model and lay the basis for the mine dewatering and groundwater management plan

A scope of work has also been completed for infrastructure and transport option studies, plus base line environmental studies. The exploration licence has been renewed for a period of 2 years, ending 6 June 2013, in anticipation of significant expenditures on the BFS.

Focussing on the work ahead, Altona will be presenting on the Arckaringa project and its potential impact on South Australia's energy outlook at the SA Major Projects Conference in Adelaide on 23 August.

Altona's Managing Director, Chris Schrape, commented; "With the endorsement of Chinese authority reportsassessing the quality and extent of the coal feedstock source at Arckaringa, our JV partner and project manager CNOOC-NEIA have mobilised their multi-disciplined team to Adelaide. BFS development work continues in Beijing and the JV Operating Team's work will now target the EL 4512 area for detailed assessment ahead of development. We will work with our partners to assess the best development options for eventual constructions of a major new energy and fuels source in South Australia. On receipt of approvals from the South Australian Government for the field programme, the Arckaringa JV is ready to progress with the next round of development. "

**ENDS**

For further information, please contact:

Notes:

Altona Energy Plc is an AIM listed Australian based energy company. Its asset is an estimated 7.8 billion tonne coal resource (non-JORC) in the Arckaringa Basin of South Australia (JORC-compliant: 1.287 billion tonnes). This is considered by the Board to be one of the world's largest untapped energy banks. Per Jacobs Engineering's study for the Company, assuming a 50% conversion of CTL fuels and 50% to synthetic gas ('Syngas'), Arckaringa total coal resources (both JORC and non-JORC) would represent respectively 28% and 29% of current North Sea remaining proven reserves of 10,900mb of oil and 114,800 bcf of natural gas.

Altona has already accomplished a number of key phases in its development:

·; The Company has agreed the terms of a joint venture agreement with CNOOC-NEI, a subsidiary of Chinese oil major China National Offshore Oil Corporation, to accelerate the Arckaringa Project towards commercialisation.

·; Under the terms of the agreement, CNOOC-NEI will fund the bankable feasibility study ('BFS') for a coal mine and an integrated value-added project.

·; CNOOC-NEI will also act as the operator and take responsibility for assessing the full potential of the coal resource, in return for a 51% interest in the exploration licences.

·; It is envisaged that numerous new additional projects may also be opened up to create a multi-project, multi-national business.

CTL

The quality of the Company's coal is suitable for conversion to synthetic gas ('Syngas'), using existing commercial CTL technologies. The process involves two major stages;

1. gasification to produce Syngas rich in hydrogen and carbon,

2. a liquefication stage where the Syngas is reacted over a catalyst to produce high quality, ultraclean synthetic fuels and chemical feedstocks.

CTL is a prime example of clean coal technology - the associated combined cycle units produce negligible sulphur oxides, significantly less nitrogen oxides and 10-20% less CO2 per unit of power generated than a conventional coal fired plant, whilst carbon capture and storage offers the potential to reduce the overall greenhouse gas emissions from CTL to below the 'well to wheel' level of fuels derived from crude oil. The technology is best demonstrated in South Africa, where currently 30% of the country's gasoline and diesel fuel needs are met through CTL plants.

In accordance with the guidelines of the AIM Market of the London Stock Exchange, Peter Fagiano, Technical Director of Altona Energy Plc, is a chartered engineer with over 45 years experience in the oil and gas and process industry sectors. Mr Fagiano is the qualified persons as defined in the London Stock Exchange's Guidance Note for Mining and Oil and Gas companies who has reviewed and approved the technical information contained in this announcement.