Arckaringa Project Update

3 June 2013

Arckaringa Project Update

South Australian Government renews Arckaringa Exploration Licences

Altona Energy (AIM: ANR) is pleased to announce a two year extension of the Arckaringa Exploration Licences (EL's) until 6 June 2015. The South Australian Government, through the Minister for Mineral Resources and Energy, has granted the extension over all of the areas covered by EL 4511, EL 4512 and EL 4513, following a successful renewal application submitted in May by the Arckaringa JV partners, CNOOC NEIA (51% holder in each of the EL's) and Altona's subsidiary Arckaringa Energy (49%). The two year extension and full area coverage is the most that the Government can grant under the maximum 5 year term for Mineral EL's.

The Government has confirmed that all the required conditions required to justify a two year extension have been met. Together, the JV partners have:

·; fulfilled all statutory reporting obligations since the beginning of the current term of the EL's (7 June 2010)

·; exceeded the minimum combined expenditure threshold for the EL's of AUS$2.07 million ($0.69 million annually in each of the 3 years to date) , with more than 70% of expenditure on essential technical studies (covering geology, exploration and mine design, groundwater, coal conversion technologies)

·; presented a future work program and budget , as approved by the JV partners at their last JV Management Committee meeting, which will continue to exceed statutory requirements and will be invested by CNOOC NEIA as part of its Bankable Feasibility Study (BFS) funding commitment

Altona's Managing Director, Chris Schrape, commented that "the full two year renewal of the three tenements not only enables the joint venture partners to move forward with confidence on the Arckaringa Project BFS but also indicates the importance that the South Australian Government attaches to the Project and the Arckaringa energy resources for future State development".

The work program and budget discussed with the Government chiefly aims to establish the design parameters for the initial box cut and mine plan for the Wintinna deposit, underpin the environmental impact assessment, including groundwater management, and define the coal quality profile for coal conversion options. It includes the following key technical works during the extension period:

·; Engagement of exploration consultants (China)

·; Engagement of a Drilling Services provider for the forthcoming drilling program (Australia)

·; Drilling work preparation (mobilisation, topography surveys, hydrogeology survey, field construction, environmental management controls, rehabilitation plans）

·; Field Drilling (an initial 7 boreholes, including two Large Diameter holes for groundwater pump testing and coal core)

·; Testing and Analysis (coal bulk sample and core testing and analysis, core transportation and storage, hydrogeological model update）

·; Resource estimation in accordance with JORC (2012) guidelines

·; Groundwater disposal and utilization studies

·; Environmental impact assessment

Decisions by the JV partners on additional work and expenditure during the next two years will depend on the results of this scheduled work program, especially the drilling program and associated testing and analysis.

Mr. Schrape commented further that: "CNOOC NEIA has committed significant funding specifically for the upcoming work program, which will not only advance the BFS on several technical fronts but also increase the momentum behind the project".

Details and timing of the drilling program bidding process, which involves an Invitation to Bid (ITB) for five pre-qualified companies and a selection/contracting stage, will be released in a separate announcement as soon as the ITB has been issued by CNOOC NEIA.

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

About Altona Energy

Altona Energy is listed on the London Stock Exchange's AIM market. Its current focus is firmly on the evaluation and development of the Company's 49% interest in its 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. Through its 100% Australian subsidiary Arckaringa Energy Pty. Ltd, Altona Energy has forged a Joint Venture with CNOOC New Energy Investment Co., Ltd., a subsidiary of the China National Offshore Oil Corporation (CNOOC), to complete the Project Bankable Feasibility Study and expedite the Project's development.

In addition to its Arckaringa interest, Altona Energy holds interests in two coal exploration licences in the Xinjiang Autonomous Region of the People's Republic of China. These interests are expected to provide early cash flow to enable the Company to progress the Arckaringa project and to continue to investigate additional opportunities to deploy the management team's expertise in clean energy.

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