Interim Results

Alkane Energy PLC
12 September 2001



12 September 2001

                         Alkane Energy plc ('Alkane')

                 Results for the half year ended 30 June 2001


                                  HIGHLIGHTS


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


  * Good progress in the first six months as a public company

  * Profit of £330,076 (first half 2000: £279,342 loss) in line with
    expectations

  * Sales from Shirebrook and Steetley Green Energy Parks ahead of previous
    year

  * Roll out programme active and on target

  * Heads of Agreement signed in respect of the development of 24 new sites,
    development work has already commenced at 6 of these sites

  * More than 20 sites are at the pre-development phase

  * Government acknowledges support for industry and is examining ways in
    which it can support its development



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



' We have made a good start to our first year as a public company and are
delighted to have signed agreements with two major electricity suppliers,
Enron and Scottish & Southern.  Our roll out programme is on target and we
hope to have the first new site open before the year end'



Enquiries:


Alkane Energy plc

Dr. Cameron Davies, Executive Chairman     Tel: [phone] (Today)
David Cross, Chief Executive                    [phone] (Thereafter)


Millham Communications                     Tel: [phone] or
Judith Parry/Simon Rothschild                   [phone]




Alkane Energy plc
Chairman's statement


Alkane has continued to make good progress in the first six months of 2001.
Our financial results are as expected whilst our roll out programme has
continued to gather its anticipated momentum.  We have signed multi-site Heads
of Agreement with two major electricity suppliers, Enron and Scottish &
Southern, and continue to receive interest from other potential customers.



Financial Highlights

I am pleased to report that the Company made a small profit of £330,076 for
the half year compared to a loss of £279,342 in the same period last year.
This was largely due to the benefits of adequate and cost effective funding.
Sales from our Green Energy Parks at Shirebrook and Steetley were ahead of the
previous year.  However, overall sales were lower at £551,829 compared to £
707,282 in the same period last year.  This was due to an exceptional problem,
as previously reported, at our Markham Green Energy Park where air was being
drawn in at another mine which had not been effectively sealed by British
Coal.  Remedial work has been completed and we anticipate that as the methane
content rises, the customer will be able to take more gas.


It is anticipated that expenditure will increase significantly in the second
half of the year as our site development programme accelerates.


The Directors are not proposing the payment of a dividend.


Site Development


Alkane has 18 DTI onshore oil and gas licences covering an area of 4,282 km
(2).  These licences cover an extensive area of coal measures where there is
CMM potential.  Our site development team continues to evaluate this acreage
in order to identify the most appropriate sites that can be developed to meet
our customers' requirements.


Heads of Agreement have been signed for the development of a total of 24 sites
the majority of which are with Enron and Scottish & Southern.


During the half year development work commenced at six new sites, which are
located in Yorkshire, Lancashire and the East Midlands.  We also have more
than 20 other sites in the detailed pre-development phase.



Licences


We continue to evaluate opportunities to acquire new licences for both CMM and
coal bed methane ('CBM').  We anticipate applying for new licences in the 10th
round of UK onshore licensing in October if we consider that they will enhance
our already extensive portfolio.



Government Support


We are encouraged by the drive towards the development of and the appetite for
alternative green energy sources on an international scale.  This has been
recognised by the UK Government through its climate change strategy for
reducing greenhouse gas emissions.  Although CMM has not been included in the
recently announced Renewables Obligation, the Government has publicly
acknowledged its support for the utilisation of CMM for electricity generation
and is currently examining a number of ways in which assistance can be given
to the industry.  Government assistance would enable smaller sites to become
commercially viable.  Alkane was a founder member of the Association of Coal
Mine Methane Operators (ACMMO), which is currently working with the Government
to discuss possible options such as full exemption from the Climate Change
Levy.  We are optimistic that these discussions will reach a positive
conclusion.


Strategy


Our strategy remains unchanged:


*     To use the Shirebrook design and technology as a model for future site 
      developments

*     To roll out 100 or more sites over the next five years

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

*     To concentrate on CMM whilst monitoring technological and market          
      developments in the emerging CBM industry in the UK


We continue to receive many enquiries about our concept and technology from
overseas markets and are pleased to support the DTI in trade missions to
countries such as China.  In the longer term we intend to capitalise on this
interest.


Prospects


We have made a good start to our first year as a public company.  Our
development programme is in line with our plans but we do not expect to see
the real financial benefits of these until the end of 2002 when a large number
of new sites will be operational.


Our objective is for seven new sites to become operational by the end of the
first quarter 2002 increasing to at least 16 new sites by the end of the year.
It is possible that the first of these will open before the end of this
year.


The Company continues to be optimistic about the energy market and the
commercialisation of its product whilst making a positive impact on the
environment.



Dr. Cameron Davies

Chairman




GROUP PROFIT AND LOSS ACCOUNT
For the six months ended 30 June 2001


                                      Six months     Six months          Year   
                                        ended 30       ended 30      ended 31
                                       June 2001           June      December
                                      (unaudited)          2000          2000
                                                £             £             £
 
TURNOVER                                  551,829       707,282     1,255,865
Cost of sales                           (246,020)     (309,922)     (631,709)

GROSS PROFIT                              305,809       397,360       624,156

Administrative expenses                 (674,735)     (267,321)     (997,079)
Other operating income                      6,325         5,954         7,512

OPERATING (LOSS)/PROFIT                 (362,601)       135,993     (365,411)

Bank interest receivable                  692,677         7,875       102,891
Interest payable                                -     (423,210)     (922,189)

PROFIT/(LOSS) ON ORDINARY ACTIVITIES      330,076     (279,342)   (1,184,709)
BEFORE TAXATION

Taxation                                        -             -           432

PROFIT/(LOSS) ATTRIBUTABLE TO             330,076     (279,342)   (1,184,277)
SHAREHOLDERS

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

ACCUMULATED LOSSES CARRIED            (1,895,220)   (1,320,361)   (2,225,296)
FORWARD

Earnings/(Loss) per ordinary                0.37p       (0.93p)       (3.56p)
share - basic
Earnings/(Loss) per ordinary                0.36p       (0.93p)       (3.56p)
share - fully diluted


STATEMENT OF RECOGNISED GAINS
AND LOSSES

                                       Six months    Six months          Year   
                                         ended 30         ended         ended 
                                        June 2001       30 June   31 December
                                      (unaudited)          2000          2000
                                                £             £            £
Profit/(Loss) for the period              330,076     (279,342)   (1,184,277)

Total recognised gains/                   330,076     (279,342)   (1,184,277)
(losses) for the period
Prior period adjustment                         -       339,837       339,837

Total recognised gains/                   330,076        60,495     (844,440)
(losses)




GROUP BALANCE SHEET
At 30 June 2001

                                        As at 30      As at 30         As at 31
                                       June 2001          June         December 
                                     (unaudited)          2000             2000 
                                               £             £                £
                                                                               
FIXED ASSETS

Intangible assets                         46,500        77,498           61,998
Tangible fixed assets - gas            8,008,364     4,948,030        5,555,985
properties
 - other                                 226,828        36,116          150,237

                                       8,281,692     5,061,644        5,768,220

CURRENT ASSETS

Stock                                     16,068        15,726           17,368
Debtors                                  599,550       460,304          534,472
Cash at bank and in hand              24,026,246       360,630       25,957,614

                                      24,641,864       836,660       26,509,454
CREDITORS: amounts falling due       (1,266,530)     (636,360)      (1,037,358)
within one year

NET CURRENT ASSETS                    23,375,334       200,300       25,472,096


TOTAL ASSETS LESS CURRENT             31,657,026     5,261,944       31,240,316
LIABILITIES


CREDITORS: amounts falling due
after more than one year
Convertible loan stock held by                 -   (6,283,741)                -
shareholders

PROVISIONS FOR LIABILITIES AND         (188,146)             -        (129,778)
CHARGES


NET ASSETS                            31,468,880   (1,021,797)       31,110,538


CAPITAL AND RESERVES

Called up share capital                  448,139       150,413          446,794
Share premium account                 32,915,961       148,151       32,889,040
Profit and loss account              (1,895,220)   (1,320,361)      (2,225,296)

TOTAL EQUITY SHAREHOLDERS' FUNDS      31,468,880   (1,021,797)       31,110,538




GROUP STATEMENT OF CASH FLOWS
For the six months ended 30 June 2001


                              Six months ended      Six months    Year ended 31
                                  30 June 2001   ended 30 June         December 
                                   (unaudited)            2000             2000 
                                             £               £                £

 NET CASH (OUTFLOW)/INFLOW FROM      (305,120)         138,757         (41,301)
OPERATING ACTIVITIES

RETURNS ON INVESTMENTS AND SERVICING OF
FINANCE

Interest received                      606,024           7,875           34,656
Interest paid                        (184,544)        (86,260)        (911,458)

                                       421,480        (78,385)        (876,802)

TAXATION

Corporation tax                              -               -              329

CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT

Payments to acquire tangible fixed (1,987,845)       (805,683)      (1,390,341)
assets - gas properties
 - other                              (88,149)         (6,353)         (23,835)
                                   (2,075,994)       (812,036)      (1,414,176)

NET CASH OUTFLOW BEFORE            (1,959,634)       (751,664)      (2,331,950)
FINANCING


FINANCING

Issue of ordinary share                 28,266               -       28,037,270
capital
Issue of convertible loan                    -         440,000        2,380,000
stock
Repayment of convertible loan                -               -      (2,800,000)
stock

                                        28,266         440,000       27,617,270
(DECREASE)/INCREASE IN CASH        (1,931,368)       (311,664)       25,285,320



RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT



                              Six months ended   
                                       30 June   Six months ended    Year ended 
                                          2001            30 June   31 December 
                                     (unaudited)             2000          2000 
                                             £               £                £

(Decrease)/increase in cash        (1,931,368)       (311,664)       25,285,320
Cash (inflow)/outflow from                   -       (440,000)          420,000
loans

CHANGE IN NET DEBT ARISING FROM    (1,931,368)       (751,664)       25,705,320
CASH FLOWS

Loans converted into shares                  -               -        5,000,000

NET FUNDS/(DEBT) AT START OF        25,957,614     (4,747,706)      (4,747,706)
PERIOD


NET FUNDS/(DEBT) AT END OF          24,026,246     (5,499,370)       25,957,614
PERIOD



NOTES TO THE ACCOUNTS
At 30 June 2001



1. Basis of preparation

These unaudited interim financial statements, which are for the six months
ended 30 June 2001, do not constitute Statutory Accounts within the meaning of
Section 240 of the Companies Act 1985.  They have been prepared using the
accounting policies set out in the group's 2000 statutory accounts.

The statutory accounts for the year ended 31 December 2000 received an
unqualified auditor's report and have been delivered to the Registrar of
Companies.

2.             Turnover

Turnover is attributable to one continuing activity, the extraction and sale
of gas from coal measures for power generation and burner tip use.  All
turnover is derived from within the United Kingdom.



3. Earnings PER SHARE

The earnings per ordinary share is based on a profit of £330,076 (six months
ended 30 June 2000 - loss of £279,342; year ended 31 December 2000 - loss of £
1,184,277) on a weighted average of 89,503,601 ordinary shares (six months
ended 30 June 2000 - 30,082,600; year ended 31 December 2000 - 33,259,907).

Diluted earnings per share for the six months ended 30 June 2001 are based on
a dilution by 3,128,976 ordinary shares in respect of share options held by
directors and employees.  The loss attributable to ordinary shareholders and
number of shares for the purpose of calculating the diluted loss per ordinary
share for the six months ended 30 June 2000 and the twelve months ended 31
December 2000 are identical to those used for the basic earnings per share.
This is because the exercise of share options would have the effect of
reducing the loss per ordinary share and is therefore not dilutive under the
terms of FRS14 'Earnings per Share'.



4.  RECONCILIATION OF OPERATING LOSS TO NET CASH FLOW FROM OPERATING
    ACTIVITIES
                                      Six months ended  Six months        Year
                                          30 June 2001    ended 30    ended 31
                                                  2001        June    December
                                            (unaudited)       2000        2000  
                                                     £           £           £
Operating (loss)/profit                      (362,601)     135,993    (365,411)
Depreciation                                    83,362      69,571      147,442
Amortisation                                    15,498      15,500       31,000
Decrease/(increase) in stock                     1,300     (6,757)      (8,399)
Decrease/(increase) in debtors                  21,575   (261,992)    (267,925)
(Decrease)/increase in creditors              (64,254)     186,442      421,992

Net cash (outflow)/inflow from               (305,120)     138,757     (41,301)
operating activities



5.  ANALYSIS OF NET FUNDS/(DEBT)
                                As at 30       As at 30                   As at 
                               June 2001           June             31 December 
                             (unaudited)           2000                    2000
                                       £              £                       £

Cash at bank and in hand      24,026,246        360,630              25,957,614
Convertible secured loan               -    (5,860,000)                       -
stock

Net funds/(debt)              24,026,246    (5,499,370)              25,957,614



General Note:


Copies of the interim report will be posted to shareholders on 18 September
and will be available from the company's registered office from this date.