Impact of Budget Statement

Alkane Energy PLC
17 April 2002


17 April 2002



                               Alkane Energy plc

    Coal Mine Methane to be Granted Full Exemption From Climate Change Levy

Alkane Energy plc ('Alkane'), the UK's leading commercial producer of Coal Mine
Methane ('CMM') from abandoned coal mines, has welcomed the announcement today
by HM Government that the Finance Bill 2002 will contain measures to exempt
electricity generated from CMM from Climate Change Levy.  It is proposed that
this will be effective from Summer 2002.

This will correct the anomaly that currently exists whereby CMM used directly as
an industrial fuel is exempt from Climate Change Levy but distributed
electricity generated from CMM is not.  The Association of Coal Mine Methane
Operators ('ACMMO') has been lobbying on behalf of the industry for some time
for this anomaly to be rectified.

Alkane currently has a total of five Green Energy Parks which are located in
Nottinghamshire, Derbyshire and Yorkshire.  At two of these sites CMM is
collected and used directly as an industrial fuel by the customer.  At the other
three sites, CMM is supplied to the customer for conversion on-site into
electricity.

Climate Change Levy is currently paid on the electricity generated by industrial
and commercial users of the electricity.  Exemption from the tax will therefore
directly benefit Alkane's customers at the Shirebrook, Steetley and Wheldale
Green Energy Parks as they will be able to sell CCL exempt electricity.  In
anticipation of this change, Alkane's contracts in respect of CMM sales for
electricity generation provide for Alkane and the customer to share any
beneficial change in the tax regime, and the exemption represents an increase in
the revenue from gas sales of around 15% for those three sites.

Commenting on the Government's proposal to fully exempt CMM from Climate Change
Levy, Dr Cameron Davies, Chairman of Alkane Energy, said:



'We are delighted with this proposal and see it as positive support for this
newly established green UK industry.  The Government has now publicly recognised
the case for CMM capture and we hope that additional financial incentives will
be forthcoming to further encourage the development of this exportable
technology.'



Enquiries:



Alkane Energy plc

Dr Cameron Davies, Chairman                      Tel: [phone]

David Cross, Chief Executive

Binns & Co PR Ltd

Judith Parry                                     Tel: [phone]

Sophie Morton



EDITOR'S NOTES



Alkane Energy plc is the UK's leading commercial producer of coal mine methane
('CMM') from abandoned coal mines.  It was listed on the main market of the
London Stock Exchange in December 2000 and currently operates five Green Energy
Parks in the East Midlands and Yorkshire.  Methane is extracted at these sites
by Alkane and converted into electricity by the customer or used directly as a
fuel.



Methane is a natural product of the decay of organic matter.  Some of this
methane escapes as coal is mined.  Once the mine is closed the void space in the
old mine workings act as a giant underground gas holder.  CMM extraction at
commercial levels is achieved by applying a vacuum to these old mine workings.



Alkane currently holds onshore licences covering 5,816km2, which give it
exclusive production rights over the largest licensed acreage relating to
potential CMM extraction in the UK.  There are over 1,000 abandoned coal mines
in total in the UK and at least 400 of these are located on Alkane's acreage.



Alkane now has five operational sites in the East Midlands and Yorkshire and
plans to roll out a further 100 sites using its concept over the next five
years.



                      This information is provided by RNS
            The company news service from the London Stock Exchange