Announcement of Redundancies

Alkane Energy PLC
27 March 2003

27 March 2003

                 Alkane Energy Plc ('Alkane' or 'the Company')

                          Announcement of Redundancies

Alkane Energy plc, the UK's leading commercial producer of Coal Mine Methane 
('CMM') from abandoned coal mines, today regrettably announces a significant
reduction in its workforce.

In the preliminary results of 13th March 2003, the Company announced a revised
strategy and an examination of the cost base in response to continuing low
wholesale electricity prices in the UK and the lack of meaningful support from
the UK Government for the CMM industry making the development of further UK CMM
sites commercially unviable.

On a positive front the Directors are encouraged by the opportunities for
profitable enterprise offered by CMM projects outside the UK, by landfill
methane and exploitation of the company's modular containerised systems.  The
first such development, a CMM project in Germany, was announced on 10th March
2003.  As CMM is included in the German Renewable Energy Law this project will
receive a guaranteed price for electricity generated of £46/MWh compared with
just £17/MWh in the UK.

Development activity on further CMM sites in the UK will cease, as the Company
redirects its focus towards more immediately viable markets.  As a consequence,
we have adopted various cost cutting measures both in terms of personnel and
overheads of our business in the UK amounting to cash savings of approximately
£900,000 per annum.  The number of employees in our development team, engineers
and support staff will be reduced by 50 percent from 24 to 12.

Commenting, David Cross, Chief Executive said:

'It is most regrettable but necessary for us to take this action which is as a
consequence of the Government's lack of support for this UK developed green
energy technology.  Last year CMM capture reduced carbon emissions by the
equivalent of 510,000 tonnes of carbon dioxide.  These emissions are a
Government liability and will eventually have to be captured at huge cost to the
Treasury.

We will continue to lobby the Government for CMM to be included in the
Renewables Obligation alongside landfill methane, enabling CMM capture
technology to contribute to the achievement of the UK's carbon emissions
reduction targets.  In the meantime we look forward to developing our business
in markets where green premium prices can be secured.'



For further information:
Alkane Energy plc
Dr Cameron Davies, Chairman                          Tel: [phone]
David Cross, Chief Executive

Binns & Co PR Ltd
Judith Parry/Sophie Morton                           Tel: [phone]
Dr Ben Willey                                        Tel: [phone]


Editor's Notes:


Alkane Energy plc, the UK's leading commercial producer of coal mine methane 
('CMM') from abandoned coal mines, was listed on the main market of the London
Stock Exchange in December 2000.  At the same time the company raised £30m
through an institutional placing at a placing price of 90p.

Alkane has used its unique extraction concept in the development of four 'Green
Energy Parks' in the East Midlands & Yorkshire where CMM is captured from
abandoned coal mines and is sold to a third party for conversion of electricity
on site or sold as a fuel for industrial processes.

Alkane has licences to acreage in the UK covering 5,590 km(2), which include
over 300 abandoned coal mines, many of which hold the potential for CMM capture
and generation of electricity.

CMM is a noxious and dangerous gas which escapes into the environment from vents
on abandoned coal mines.  It is 23 times more damaging to the atmosphere that
carbon dioxide in terms of global warming.  Alkane's four capture projects
achieved an emissions reduction equivalent to 510,000 tonnes of CO2.  CMM
continues to escape to atmosphere for 100 years after a mine has been closed
off. The company's activities are therefore of great benefit to the environment.

Alkane has been severely hit by the collapse in wholesale electricity prices
caused by the NETA (New Energy Trading Arrangements), which has also been
mentioned as a contributory factor in the near-collapse of British Energy.  This
has made the development of new CMM sites commercially unviable.

Alkane is currently lobbying the government through ACMMO (the Association of
Coal Mine Methane Operators) for support in the development of this new
industry.   Full exemption from Climate Change Levy, which was announced in the
budget in April, has been incorporated in the Finance Act 2002 and EU state aid
clearance is awaited.

On 10th March 2003 Alkane announced its first CMM project in Germany. Alkane has
signed an agreement with A-TEC Anlagentechnik GmbH ('A-TEC') and Pro2
Anlagentechnik GmbH ('Pro2') of Germany to develop a 2.7MW generation facility
in Gelsenkirchen in the Nordrhein-Westfalen region of Germany. The project has
access to 15.7km2 of licence area which incorporates several abandoned mines.
The contract period with A-TEC is ten years. The project is the first of its
type where Alkane will be generating and selling electricity.



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