Altona Energy Regulatory News (ANR)

7 March 2012

Altona Energy Plc

('Altona' or 'the Company')

Acquisition of PRC Coal Exploration Licences - Signing Ceremony

Further to the announcement of 17 February 2012, Altona, the AIM quoted energy company, announces that the Share Purchase Agreement (the "SPA") covering the conditional purchase of a 95% indirect beneficial interest in two advanced coal exploration licences located in the People's Republic of China ("PRC") ("the Acquisition"), was formally executed at a signing ceremony on 23 February held in the city of Zheng Zhou. A programme for completing the terms of the SPA has been established.

Highlights:

o The SPA was formally signed at a ceremony held in the presence of high level PRC regional government and industry representatives, where the Company received positive support for its development plans (see Note 1 below)

o The completion of the Acquisition will be a transformational move in the status of the Company,

§ providing the potential to move rapidly into production on granting of a Mining Licence and

§ generate strong sustainable cash flows, underpinning the Company's future and participation in the Arckaringa Project with Joint Venture partner CNOOC-NEI

o The Company is evaluating a dual listing on the Hong Kong Stock Exchange ("HKSE"), given the Directors' belief that the Acquisition together with the Arckaringa Joint Venture with CNOOC-NEI, are likely to make the Company eligible for listing on the HKSE, as a means to further strengthen its shareholder base

o A programme and timetable for meeting the conditions under the Agreement is in place, covering the conversion of the Exploration Licences ("EL's") into Mining Licences ("ML's") and subsequent commencement of production

Christopher Lambert, Chairman of Altona, commented:

"The signing ceremony in Zhengzhou was an important and successful event for both parties. Cheerful Jade Investment Holding Ltd, the holder of the ELs, is associated with the Zheng Zhou Zhong Mei Energy Group, which operates coal mines across China. The execution of the SPA in the home city of the Group, in the presence of key government and industry officials, recognises the high standing and strong coal development track record of the Group and bodes well for a successful coal project based on the two advanced exploration licences in Xinjiang. Altona looks forward to working with the Group to complete the ML conversion process and start production as soon as practicable."

"For Altona, the SPA is a potential company changing milestone. It is the result of the Board's strategic decision in early 2011 to pursue commercial opportunities to deliver a stable income stream and reduce dependence on the Arckaringa Project as the sole basis of future shareholder returns. Once production commences, we will be providing coal to meet growing local demand to support local regional economic development. Bringing profitable producing assets on stream, based on a commodity we know well and using our established contacts in China, can help secure Altona's foreseeable funding needs and provide a more stable base for future growth ".

"We continue to actively progress the bankable feasibility studies on our flagship Arckaringa Project with CNOOC-NEI, and look forward to providing an update shortly as part of our Interim results."

In the Company's view, the key benefits of a successful completion of the Acquisition include:

·; a source of revenue and profits that will obviate the need to raise funds from shareholders and arrest further dilution of existing shareholders

·; a stronger platform for Altona's participation in the Arckaringa JV, particularly to cover working capital needs during the BFS

·; the ability to strengthen the Company's shareholder base - for example, holding income producing coal assets in China of the nature and size contemplated by the Acquisition would enable Altona to consider a listing on the HKSE and the Company has engaged a Hong Kong based corporate advisor to assist in the evaluation of this pathway.

The Board believes that the SPA is a suitable vehicle to deliver these benefits, but contains sufficient protections for the Company and its shareholders. The consideration payable has been favourably structured against significant performance milestones, including successfully converting each EL into a ML within a specified timeframe and with the cash consideration only payable out of profits following the commencement of production in respect of each ML. In addition, based on information available from its initial review of the EL's and on the relationships built between Altona's Beijing office and the EL owners, the Directors' believe the risk of non conversion of the EL's to ML's and not reaching the production and profit milestones stipulated in the SPA are low.

Altona's Managing Director, Chris Schrape (who has more than 20 years' senior experience in coal production and marketing and will be leading the SPA due diligence process) commented that: "the current EL owner is part of a group that is already operating several successful coal mines in China and the data available to date indicates that the estimated coal resource in the two EL's is approximately 1.17 billion tonnes (non JORC) and is of marketable quality. Subject to technical due diligence to underpin the development of an approved mine plan and other required documents under a granted ML, the resources should be capable of being brought progressively into open cut production at a competitive cost and with low risk."

A process, including a programme and target timetable, to deliver the conversion to ML's and achieve the SPA production and profit milestones has been established, as set out in Note 2 below. Altona's current management team in Beijing will lead this process, which will include the evaluation and establishment of the management team required for future mine operations.

Based on a successful due diligence, the Company is evaluating the funding options in respect of the Resource Fee that will accompany the ML applications (estimated at £3 million for each EL conversion), which include funding on a "directional add-issuance basis" (repayment against future operating revenue) via financial institutions or potential investors known to the Company. Altona's safeguard under the terms of the SPA is that if the conversion of each EL to ML is not concluded by the Vendor within 3 months of application, then the SPA can terminate and the Vendor must refund the Resource Fee plus interests to Altona.

**ENDS**

Note 1

Attendees for the SPA Signing Ceremony on 23rd February 2012, Zheng Zhou, China

Altona Energy Plc side:

Mr. Chris Lambert, Chairman

Mr. Michael Zheng, Deputy Chairman

Mr. Chris Schrape, Managing Director

Mr. Chen Ningdi (Andy Chen), Chairman of Asiabiz Capital Investment Partners Ltd (Financial Adviser to Altona Energy Plc)

Cheerful Jade Investment Holding Limited Side:

Mr Jing Zhanbin, Chairman, Zheng Zhou Zhong Mei Energy Group

Mr. Cheung Wing Kwong, Chairman, Cheerful Jade Investment Holding Limited

Attendees:

Mr. Niu Xiling, Vice President of the Zheng Zhou City Political Consultative Conference

Mr. Qi Jianzhuang , Deputy Secretary-General of the Henan Provincial People's Congress Standing Committee

Mr. Xiao Jiye, Standing member of Chinese People's Political Consultative Conference (CPPCC) Henan Provincial Committee

Mr. Chen Xiaojie, Deputy Director of the Private Economy Development Center of He Nan Province

Mr. Zhang Rongbin, Director of the General Office of Henan Provincial Party committee

Mr. Zheng Youjun, Director-General of the Zheng Zhou Municipal Bureau of Justice

Mr. Sun Xiaoguang, Director-General of the Zheng Zhou Finance Department

Note 2

 Target Indicative Program and Timetable for Acquisition, ML Conversion and Operations

In accordance with the guidelines of the AIM Market of the London Stock Exchange, Peter Fagiano, Executive Director of Altona Energy Plc, is a chartered engineer with over 45 years experience in the oil and gas and process industry sectors and is a Fellow of the Geological Society of the United Kingdom. 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.