CBM Partnership Agreement

RNS Number : 4263X

Alkane Energy PLC

15 February 2012

Alkane Energy plc

("Alkane" or "the Company")

Alkane signs coal bed methane partnership with Aberdeen Drilling Management

Alkane, the profitable alternative energy company, has signed a partnership agreement with Aberdeen Drilling Management Limited ("ADM") to explore two of Alkane's Petroleum Exploration and Development Licences ("PEDL"s) with coal bed methane ("CBM") potential in the North West of England and in the East Midlands. ADM will initially complete a geological research programme on the licences before finalising drilling commitments. ADM will farm-in to Alkane's licences and gain up to a 50% share in Alkane's interest in each licence following the completion of a CBM well in the respective licence area. The licences are PEDL 191 in the North West and PEDL 90 in Nottinghamshire, covering a total area of 133 sq. km with an initial estimated gas in place of circa 385bcf (as calculated by Tesla Exploration International Limited, an independent consultancy).

This partnership agreement is Alkane's first in CBM and further delivers on the Company's stated strategy of remaining focused on its core coal mine methane ("CMM") business whilst leveraging its "gas to power" skills into new, related business streams. Working with ADM as an experienced partner to drill these licences allows Alkane to concentrate its financial and management resources on CMM whilst benefiting from ADM's skills and knowledge base.

Neil O'Brien, Chief Executive Officer of Alkane, commented:

"I am delighted to be able to announce this agreement with ADM. This partnership, our first in CBM, is another important step in Alkane's development. Whilst maintaining focus on our core business, we continue to exploit new and related business streams where our skills and capabilities are transferable, and in the case of CBM exploration offer very significant upside potential for the Company.

This partnership further builds Alkane's footprint in the gas to power sector and follows the recent acquisition of Greenpark Energy's CMM operations."