Final Results

Alkane Energy PLC
15 March 2001


15 March 2001

                         ALKANE ENERGY PLC ('Alkane')

           PRELIMINARY RESULTS FOR THE YEAR ENDED 31 DECEMBER 2000


Alkane Energy plc is the UK's leading commercial producer of methane gas from
abandoned coal mines.

                                  Highlights

  * Increase in sales to £1,255,865 (1999: £338,849)
  * Operating loss of £365,411 (1999: £294,061) in line with expectations
  * Cash reserves of £26 million following fund raising on flotation
  * Significant contribution from the Shirebrook Green Energy Park which
    opened in January 2000
  * Aggressive roll-out programme in progress; heads of agreement signed on
    14 new sites
  * Target of 100 or more sites to be developed over the next five years

Commenting on the results, Executive Chairman, Dr. Cameron Davies, said:

'This was a year of great achievement for Alkane including the success of the
Shirebrook Green Energy Park and our stockmarket flotation. We are now in an
excellent position to use our proven concept to roll out further sites and
look forward to the year ahead with confidence.'


Enquiries:

Dr. Cameron Davies                     Tel:     [phone] (today)

Executive Chairman                              01623 421642 (thereafter)

Alkane Energy plc


David Cross

Chief Executive

Alkane Energy plc

Judith Parry/Simon Rothschild          Tel:      [phone]

Millham Communications



Alkane Energy plc

Chairman's Statement

In the year 2000 Alkane passed a further significant milestone in its
development when, in December, it floated on the main market of the London
Stock Exchange. With cash of £26 million at the year end we are now embarking
on a major roll-out programme of opening new sites across our licensed
acreage. This will transform the scale of the company's operations and unlock
the profit potential of the concept of coal mine methane extraction pioneered
by Alkane in the UK.

Financial Highlights

The trading result for the year is as expected. Sales increased from £338,849
to £1,255,865, with a significant contribution from the Shirebrook Green
Energy Park which was opened in January 2000.

Sales growth would have been greater but for the receivership of a customer,
Independent Energy, in September. As explained at the time of flotation,
operations of the Shirebrook and Steetley sites were interrupted following the
receivership with consequent loss of sales, and as a result a bad debt of £
150,000 was incurred.

The operating loss was £365,411 (1999, loss £294,061). This continuing loss
resulted from the receivership of Independent Energy, together with the
increased overheads incurred whilst gearing up towards the roll-out of sites
on a wider scale.

I am pleased to report that gas sales from Shirebrook and Steetley recommenced
in December 2000 under new gas sales agreements.

The net interest charge for the year was £819,298 (1999, £247,936), reflecting
the high rate of interest on pre-flotation debt, which, following the
flotation, has either been converted to ordinary shares or repaid.

The directors are not proposing the payment of a dividend.

Flotation

On 14 December 2000 the Company's shares were admitted to the Official List of
the UK Listing Authority and to trading on the London Stock Exchange's main
market. A placing raised £30 million before expenses and before repayment of
debt. We are pleased to welcome the new shareholders who participated in the
placing and those who have joined us since.

Licences

The results of the 9th Round of onshore licensing were announced in July 2000.
Alkane was awarded a further 7 licences covering a total of 1,495 km(2),
bringing the total number of licences held to 18, with a total area of 4,282
km(2).

In their Competent Person's Report which was included in the Listing
Particulars, Gaffney Cline & Associates reported that in the five licences
where sufficient research had been undertaken the recoverable gas reserves at
30 June 2000 were 471 bcf.

Funding

At the year end we had cash of approximately £26 million. We have repaid £2.8
million of loan stock, together with accrued interest of £0.8 million,
referred to in the Listing Particulars, and the company is now debt free.

Strategy

Alkane's strategy is to:


  * Use the Shirebrook design as the model for future site developments

  * Roll out 100 or more sites over the next five years

  * Seek to acquire more extraction rights over acreage with CMM and CBM
    potential

  * Concentrate on CMM while monitoring technological and market
    developments of the emerging CBM industry in the UK

In the longer term Alkane intends to capitalise on the high level of interest
in the Company's CMM concept and technology shown by overseas markets.

The Board

David Cross joined the board as Chief Executive in May 2000, and at the same
time Stephen Goalby, who had been Financial Controller since February 1999,
joined the board as Finance Director.

Sir David White joined the board in December 2000 as a non-executive director,
bringing extensive commercial experience.

I am also pleased to welcome two appointments in 2001.

Lord Fraser of Carmyllie became a non-executive director in January 2001.
Peter has wide political and commercial experience which will be of great
assistance to the company.

Julie Dawes was appointed company secretary in March 2001. Julie brings
considerable experience, including ten years in the energy sector.

I would like to thank those non-executive directors, Henry Boyd and Donald
Ogilvy Watson, who have now retired from the board. I am grateful for their
contribution to the company prior to the flotation and for the great support
they have given the company through its formative years.

People

We have a small team at Alkane Energy and 2000 was a particularly demanding
year as we went through the flotation process. I thank them for their hard
work and enthusiasm. We are pleased that all our people will be able to share
in the rewards of the progress of the company, either as shareholders or
through share options.

Development Plan and Prospects

The principal driving force behind the future development of Alkane is its
aggressive roll-out programme. The company is rapidly preparing for this
programme by recruiting additional managers and specialists, and by extending
and using its network of contractors.

Since the flotation, Alkane has signed heads of agreement with a number of
potential customers in respect of the development of fourteen sites and
negotiations with other potential customers are continuing. Development work
has commenced at two sites and we have planning applications submitted in
respect of a further five sites. Our sites research programme is gathering
significant momentum, through our in-house team, supported by six regional
teams of consultants.

We have made a good start to our roll-out programme and anticipate that the
first seven sites should become operational by the end of the first quarter of
2002. Thereafter we expect them to form the foundation of the company's sales
and profit growth.



Cameron Davies

Executive Chairman


Alkane Energy plc
GROUP PROFIT AND LOSS ACCOUNT
For the year ended 31 December 2000
                                                         2000             1999
                                                                    (restated)
                                                            £                £
TURNOVER                                            1,255,865          338,849
Cost of sales                                       (631,709)        (273,619)

GROSS PROFIT                                          624,156           65,230

Administrative expenses                             (997,079)        (371,960)
Other operating income                                  7,512           12,669

OPERATING LOSS                                      (365,411)        (294,061)

Bank interest receivable                              102,891           12,280
Interest payable                                    (922,189)        (260,216)

LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION        (1,184,709)        (541,997)
Taxation                                                  432             (31)

LOSS FOR THE FINANCIAL YEAR                        (1,184,277)        (542,028)

ACCUMULATED LOSSES BROUGHT FORWARD                 (1,041,019)        (498,991)

ACCUMULATED LOSSES CARRIED FORWARD                 (2,225,296)       (1,041,019)

Loss per ordinary share - basic and fully diluted      (3.6p)           (1.8p)


STATEMENT OF RECOGNISED GAINS AND LOSSES
                                                         2000             1999
                                                            £                £
Loss for the financial year                        (1,184,277)        (542,028)
Total recognised losses for the year               (1,184,277)        (542,028)
Prior year adjustment                                 339,837                -

Total losses recognised since the last annual       (844,440)        (542,028)
report




Alkane Energy plc
GROUP BALANCE SHEET
at 31 December 2000
                                                          2000             1999
                                                                     (restated)
                                                             £                £
FIXED ASSETS
Intangible assets                                       61,998          114,998
Tangible fixed assets - gas properties               5,555,985        4,400,756
Tangible fixed assets - other                          150,237           32,320
                                                     5,768,220        4,548,074
CURRENT ASSETS
Stock                                                   17,368            8,969
Debtors                                                534,472          198,312
Cash at bank and in hand                            25,957,614          672,294
                                                    26,509,454          879,575
CREDITORS: amounts falling due within one year      (1,037,358)        (662,241)

NET CURRENT ASSETS                                  25,472,096          217,334

TOTAL ASSETS LESS CURRENT LIABILITIES               31,240,316        4,765,408

CREDITORS: amounts falling due after more than one
year
Convertible loan stock held by shareholders                  -       (5,507,863)

PROVISIONS FOR LIABILITIES AND CHARGES               (129,778)                -

NET ASSETS                                          31,110,538        (742,455)

CAPITAL AND RESERVES
Called up share capital                                446,794          150,413
Share premium account                               32,889,040          148,151
Profit and loss account                             (2,225,296)      
(1,041,019)

TOTAL EQUITY SHAREHOLDERS' FUNDS                    31,110,538        (742,455)




Alkane Energy plc
GROUP STATEMENT OF CASH FLOWS
for the year ended 31 December 2000
                                                          2000             1999
                                                             £                £

NET CASH OUTFLOW FROM OPERATING ACTIVITIES (NOTE A)   (41,301)        (274,260)

RETURNS ON INVESTMENTS AND SERVICING OF FINANCE
Interest received                                       34,656           12,280
Interest paid                                        (911,458)        (125,208)
                                                     (876,802)        (112,928)
TAXATION
Corporation tax                                            329          (2,182)

CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT
Payments to acquire tangible fixed assets - gas     (1,390,341)      (2,402,725)
properties
Payments to acquire tangible fixed assets - other     (23,835)         (17,150)
Receipt of grants                                            -           91,389
                                                    (1,414,176)      (2,328,485)
NET CASH OUTFLOW BEFORE FINANCING                   (2,331,950)      (2,717,855)

FINANCING
Issue of ordinary share capital                     28,037,270                -
Issue of convertible loan stock                      2,380,000        2,620,000
Repayment of convertible loan stock                 (2,800,000)                -
                                                    27,617,270        2,620,000
INCREASE/(DECREASE) IN CASH                         25,285,320         (97,855)


RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET
DEBT
                                                          2000             1999
                                                             £                £
Increase/(decrease) in cash                         25,285,320         (97,855)
Cash outflow/(inflow) from loans                       420,000       (2,620,000)
CHANGE IN NET DEBT ARISING FROM CASH FLOWS          25,705,320       (2,717,855)
Loans converted into shares                          5,000,000                -
NET DEBT AT 1 JANUARY                               (4,747,706)      (2,029,851)
NET DEBT AT 31 DECEMBER (NOTE B)                    25,957,614       (4,747,706)


NOTES TO THE STATEMENT OF CASH FLOWS

A      Reconciliation of operating loss to net cash outflow from operating
activities
                                                         2000              1999
                                                            £                 £
Operating loss                                      (365,411)         (294,061)
Depreciation                                          147,442           110,351
Amortisation                                           31,000            31,000
(Increase) in stock                                   (8,399)           (8,969)
(Increase) in debtors                               (267,925)          (83,938)
Increase/(Decrease) in creditors                      421,992          (28,643)

Net cash outflow from operating activities           (41,301)         (274,260)




B    Analysis of net funds/(debt)
                                                                 
                                At       Converted                           At
                         1 January            into                  31 December
                              2000          shares     Cash flow           2000
                                 £               £             £              £

Cash at bank and in hand   672,294               -    25,285,320     25,957,614
Loans                   (5,420,000)      5,000,000       420,000              -
                        (4,747,706)      5,000,000    25,705,320     25,957,614


General Notes:

1. The preliminary financial statements for the year ended 31 December 2000
were approved by the board of directors on 14 March 2001.

2.

(a) The preliminary financial information set out above does not constitute
full accounts within the meaning of section 254 of the Companies Act 1985.

(b) Statutory accounts in respect of the year ended 31 December 1999 have been
delivered to the Registrar of Companies and those accounts were subject to an
unqualified report by the auditors.

(c) Copies of the Report & Accounts will be sent to shareholders shortly and
will be available from the company's registered office, 5 Acorn Business Park,
Commercial Gate, Mansfield, Nottinghamshire NG18 1EX.