Interim Results

Immediate Release 30 September 2008





                       Gulfsands Petroleum plc

                    Half-Yearly Financial Report

                     SIX MONTHS TO 30 JUNE 2008

                              Unaudited


Half-Yearly Results for the Six Months Ended 30 June 2008

London, 30th September, 2008:  Gulfsands Petroleum plc  ("Gulfsands",
the "Group" or the "Company" - AIM: GPX), the oil and gas production,
exploration and development  company with activities  in Syria,  Iraq
and the USA,  announces its  half-yearly results for  the six  months
ended 30 June 2008.

Summary

*         Satisfactory underlying financial performance for first
  half of 2008

*         Revenue ($19.7 million) and Net Cash from Operations ($5.3
  million) modestly up from half year 2007

*         Cash Balances at 30 June 2008 (including pending insurance
  recoveries of $4.3 million) in excess of $50 million

*         Operating Loss of $8.6 million reflects cash charge of $2.0
  million in connection with senior executive severance payments and
  staff bonuses, and non-cash charge of $11.9 million in connection
  with grants of executive share options

*         Khurbet East Early Production Facility now producing at a
  stabilised rate in excess of 11,500 bopd gross

*         New Chief Executive Officer and Chief Financial Officer
  have been appointed and both will be functioning from a new London
  office by mid-October

*         Gulf of Mexico damage resulting from Hurricane Ike still
  being assessed

HIGHLIGHTS


+---------------------------------------------------------------+
|                          | H1 2008 $M | H1 2007 $M | Change % |
|--------------------------+------------+------------+----------|
| Revenue                  |       19.7 |       19.3 |     2.1% |
|--------------------------+------------+------------+----------|
| Gross Profit             |        7.8 |        8.2 |   (4.9%) |
|--------------------------+------------+------------+----------|
| Operating (Loss)/Profit  |      (8.6) |        4.0 |      n/a |
|--------------------------+------------+------------+----------|
| Net (Loss)/Profit        |     (10.2) |        1.1 |      n/a |
|--------------------------+------------+------------+----------|
| Net Cash from Operations |        5.3 |        5.2 |     1.9% |
|--------------------------+------------+------------+----------|
| Capital Expenditure      |       11.7 |       10.4 |    12.5% |
|--------------------------+------------+------------+----------|
| Closing Cash Balance     |       47.6 |       21.1 |   125.6% |
+---------------------------------------------------------------+



Gulfsands' Chairman, Andrew West, said:

"The figures  announced  today  represent  a  satisfactory  financial
result for  the Company  during the  first half  of 2008  but are  in
themselves much less important than  the rapid progress we have  made
in bringing the Khurbet East discovery  in Block 26 Syria into  early
production.  With  a new  senior  management team,  substantial  cash
balances, no debt and our share  of 11,500 BOPD of production to  add
to our  existing  Gulf of  Mexico  production,  we are  in  a  strong
position to exploit  the still  greater opportunities open  to us  in
Syria and Iraq."

For further information please contact:

Gulfsands Petroleum
(London)                                             [phone]
4016
Kenneth Judge, Director of Corporate Development                 +44
(0)7733 001 002
Andrew Rose, Chief Financial Officer                           +44
(0)7894 958 991

Buchanan Communications Limited (London)                     +44
(0)20 7466 5000
Bobby Morse
Ben Willey

RBC Capital Markets
(London)                                           [phone]
4804
Andrew K. Smith
Sarah Wharry

These half-yearly results can also be viewed on Gulfsands' website:
www.gulfsands.net










CHAIRMAN'S STATEMENT

The first six months  of 2008 were a  period of substantial  progress
and transformation for the Group.

In addition to recording a satisfactory underlying financial  result,
the Khurbet  East Field  in Block  26 Syria  was prepared  for  early
production which has subsequently come on stream at a stabilised flow
rate of  over  11,500 bopd  gross.   Plans to  relocate  the  Group's
central management function  were initiated, with  the selection  and
appointment of  a new  Chief Executive  Officer and  Chief  Financial
Officer who will both be  fully-operational from a new London  office
by mid-October.   Proceeds  of $18.6  million  were received  from  a
strategic equity private placement.

Financial

Underlying   financial   performance   for   the   six   months   was
satisfactory.  Revenue ($19.7 million)  and net cash from  operations
($5.3 million) were both up modestly  compared to the same period  in
2007.

Gross profit  ($7.8 million)  was slightly  lower than  for the  same
period in 2007 ($8.2  million) due to the  expensing of plugging  and
abandonment costs  in the  Gulf  of Mexico,  which more  than  offset
savings in operating costs.

An operating loss of $8.6 million was incurred as a result of charges
associated  primarily  with  the  senior  management  transition,  as
included in administrative expenses, which included a cash charge  of
$2.0 million in respect of a combination of severance payments to the
former Chief Executive Officer and Chief Financial Officer and  staff
bonuses. In addition, a non-cash charge of $11.9 million was incurred
in respect of the grant of 5,193,750 executive share options.   These
options included those awarded to the new Chief Financial Officer and
replacement options granted to a  key senior executive in respect  of
old options which expired during an extended close period at the  end
of 2007.

Without such  charges, the  Group would  have reported  an  operating
profit in excess of the $4.0  million reported for the first half  of
2007.

The net loss of  $10.2 million reflected these  same charges and  the
Group would otherwise  have reported a  net profit in  excess of  the
$1.1 million reported for the comparable period in 2007.

Capital expenditure ($11.3 million) was $2.8 million greater than for
the comparable period in 2007. Of  this $7.7 million was in Syria  in
connection with the early development of the Khurbet East field,  and
$3.4 million was development and exploration expenditure in the  Gulf
of Mexico.

Cash balances at  30 June  increased to $47.6  million.  This  figure
does not include a  further $4.3 million  received after the  interim
date in  full and  final settlement  of insurance  claims related  to
damage suffered to the Group's Gulf of Mexico assets during the  2005
hurricane season.  Shareholders'  equity and total  assets both  also
increased substantially during  the period.  The  Group continues  to
have no indebtedness.

Syria

The first six months  of 2008 have been  marked by rapid progress  in
bringing online  the Khurbet  East Field  in Block  26.   Development
approval was granted in February and in the ensuing five months three
successful appraisal /  production wells were  drilled and the  Early
Production Facility  completed.  With  the completion  of  production
testing in early September, the result of this work undertaken in the
first half is that  gross production is now  running at a  stabilised
rate in excess  of 11,500  bopd from five  wells.  The  oil is  being
trucked 33 kilometres on  a dedicated road  to a production  facility
owned by  Syria Petroleum  Company,  the state  oil company  and  the
Group's highly co-operative partner in Block 26.

Cash flow from the Khurbet East Production will enhance significantly
the Group's financial performance and cash reserves during the second
half of 2008.

Work is  underway to  expand  the capacity  of the  Early  Production
Facility to 18,000  bpd as  an interim  expansion prior  to the  full
development of the Khurbet East  Field.  Additionally, it is  planned
to drill a  further exploration well  in Block 26  before the end  of
this calendar year.

United States

Production in  the  first  half attributable  to  Gulfsands'  working
interest, net of royalties, was 1,333 boed of which 438 bopd was  oil
and the remainder gas. Comparable figures for the first half of  2007
were 1,920 boed of  which 604 bopd  was oil. In  addition a total  of
726,000  gallons  of  natural  gas  liquid  products  were  produced,
compared with 1,869,000  gallons in  the same period  last year.  The
average realised price was  $114/bbl for oil  and $10.1/mcf for  gas,
compared with $61/bbl and $7.7/mcf respectively in the first half  of
2007. These  improved  prices more  than  offset the  drop  in  daily
production.

The drop in production is a consequence of two principal factors.

First, during 2007, against the backdrop of very high operating costs
in the  Gulf  of  Mexico  and  relatively  low  returns  compared  to
opportunities in Block 26 Syria, the Group curtailed its  exploration
and development expenditure  in the US.   Given the relatively  short
life nature of the  Group's producing Gulf  of Mexico reserves,  this
inevitably had  the effect  of accentuating  natural field  decline.
During 2008,  the  Group has  once  again increased  its  exploration
expenditure and the  two exploration successes  announced during  the
first half should begin to  make a significant contribution to  daily
volumes before year end.

Secondly, technical problems  at two  of the  Group's most  important
producing wells have had a serious impact on output.  As Gulfsands is
not the  operator  of  any  of its  Gulf  of  Mexico  interests,  the
resolution of such problems is a matter over which we have little  if
any effective influence.

At the time of  writing, it is  still too early  to assess fully  the
damage to offshore  infrastructure in  the Gulf  of Mexico  resulting
from Hurricane Ike.  It is clear that, in common with its peers,  the
Group will  suffer  some reduction  of  output for  an  indeterminate
period.   The  severity  and  duration  of  that  reduction  will  be
determined as rapidly as possible in the coming weeks and all actions
possible will be taken to mitigate the effects.  The Group's  Houston
office is back in  operation following modest damage  and only a  few
days of  power  outages.  The  Group  carries  substantial  insurance
against wind damage  to facilities but  does not insure  for loss  of
production.

Iraq

In recent months the pace  and substance of the Group's  negotiations
with the  Iraqi  Government over  the  Maysan Gas  Project  has  been
stepped up  considerably.   The recent  announcements  of  agreements
between the Oil Ministry and other international oil companies attest
to the progress that is at last starting to be made towards the  long
term  development  of   Iraq's  natural   resources  and   associated
infrastructure.   There  is   reason  for   cautious  optimism   that
significant  progress  is  now   being  made  towards  a   definitive
agreement.  The Group  is also  in early  discussions with  potential
funding partners for the Project.

Outlook

The financial  position  and  outlook  for  the  Group  are  strong.
Irrespective  of  fluctuations  in  world  oil  prices,  the  Group's
production in Khurbet  East means  that Gulfsands  is now  generating
substantial free cash flow and will continue to do so with  increased
momentum as we move towards full development of the field.

It is management's considered view that  the Group has only begun  to
scratch the surface of the true exploration potential of Block 26 and
ensuring that we move forward expeditiously to realise this potential
is your Board's single  highest priority.  For  the longer term,  the
Board is confident  that the  strong relationships  and goodwill  now
established in both Syria and Iraq, supported by our strong  inherent
cash generating ability, are  capable of translation into  additional
value opportunities.

Andrew West

Chairman

29 September 2008
CONSOLIDATED INCOME STATEMENT

FOR THE SIX MONTHS ENDED 30 JUNE 2008




                                     6 months ended       Year ended
                                                          31 December
                                30 June 2008 30 June 2007        2007
                          Notes  (Unaudited)  (Unaudited)   (Audited)
                                       $'000        $'000       $'000
Revenue                     2        19,699       19,253      37,309
Cost of sales
 - Depreciation                      (2,098)      (2,199)     (5,034)
 - Impairment                             -            -        (947)
 - Other cost of sales               (9,838)      (8,811)    (15,883)
Gross profit                          7,763        8,243      15,445

Administrative expenses
before share based
payments                             (4,819)      (3,394)     (7,204)
Share based payments       10       (11,878)        (328)       (882)
Total administrative
expenses                            (16,697)      (3,722)     (8,086)
Hurricane repairs -
credit/(charge)                         335         (517)     (1,856)

Operating (loss)/profit              (8,599)       4,004       5,503

Unwinding of discount on
decommissioning             8        (1,128)      (2,153)     (1,475)
Finance income                          403          432       1,190

(Loss)/profit before
taxation                             (9,324)       2,283       5,218

Taxation                               (870)      (1,220)     (2,557)

(LOSS)/PROFIT FOR THE
PERIOD                      2       (10,194)       1,063       2,661

Attributable to:
Equity holders of the
Company                             (10,194)       1,063       2,661

(Loss)/earnings per share
(cents):
Basic                       3         (9.02)        1.03        2.48
Diluted                     3         (9.02)        1.02        2.37



The results shown above relate entirely to continuing operations.
CONSOLIDATED BALANCE SHEET

AS AT 30 JUNE 2008




                                                          31 December
                                30 June 2008 30 June 2007        2007
                          Notes  (Unaudited)  (Unaudited)   (Audited)
                                       $'000        $'000       $'000
ASSETS
Non-Current Assets
  Property, plant &
  equipment                 4        48,492       45,583      46,925
  Intangible assets         5        36,261       22,108      28,593
                                     84,753       67,691      75,518

Current Assets
  Trade and other
  receivables               6        13,497       11,861      11,154
  Cash and cash
  equivalents                        47,613       21,101      34,611
                                     61,110       32,962      45,765
Total Assets                        145,863      100,653     121,283

LIABILITIES
Current Liabilities
  Trade and other
  payables                  7        (8,740)     (13,071)     (6,672)
  Provision for
  decommissioning           8        (2,520)      (3,089)     (2,512)
                                    (11,260)     (16,160)     (9,184)

Non-Current Liabilities
  Deferred tax liability             (2,671)        (838)     (1,932)
  Provision for
  decommissioning           8       (10,197)      (8,947)     (9,475)
                                    (12,868)      (9,785)    (11,407)
Total Liabilities                   (24,128)     (25,945)    (20,591)
NET ASSETS                          121,735       74,708     100,692

EQUITY
Capital and reserves
  Share capital             9        12,709       11,047      11,997
  Share premium                      98,036       56,506      79,389
  Share-based payments
  reserve                            13,611        1,179       1,733
  Merger reserve                     11,709       11,709      11,709
  Retained losses                   (14,330)      (5,733)     (4,136)
SHAREHOLDERS' EQUITY                121,735       74,708     100,962










CONSOLIDATED CASH FLOW STATEMENT

FOR THE SIX MONTHS ENDED 30 JUNE 2008




                                     6 months ended        Year ended
                                                          31 December
                                30 June 2008 30 June 2007        2007
                                 (Unaudited)  (Unaudited)   (Audited)
                          Notes        $'000        $'000       $'000
Cash flows from operating
activities
Operating (loss)/profit              (8,599)       4,004       5,503
Depreciation               4&5        2,098        2,199       5,034
Impairment charge                          -           -         947
Share-based payment
charge                     10        11,878          328         882
Change in fair value of
derivatives                               -         (101)          -
Non-cash bonus                            -            -         252
Loss on disposal of
assets                                    5            2           2
Increase in receivables              (2,342)      (2,232)     (2,266)
Increase/(decrease) in
payables                              2,226          991      (5,399)
Net cash from operations              5,266        5,191       4,955

Interest received                       403          432       1,190
Taxation paid                          (284)        (860)       (356)
Net cash from operating
activities                            5,385        4,763       5,789

Investing activities
Exploration and
evaluation expenditure      5        (7,605)      (7,018)    (13,511)
Oil and gas properties
expenditure                 4        (3,444)      (1,513)     (5,175)
Other capital expenditure              (295)           -         (45)
Plug and abandonment
costs paid                  8          (398)      (1,855)     (2,752)
Net cash used in
investing activities                (11,742)     (10,386)    (21,488)

Financing activities
Proceeds from issue of
ordinary share capital               19,359            -      28,831
Share issue costs                         -            -        (250)
Net cash from financing
activities                           19,359            -      23,581

Increase/(decrease) in
cash and cash equivalents            13,002       (5,623)      7,887

Cash and cash equivalents
at beginning of period               34,611       26,724      26,724
Cash and cash equivalents
at end of period                     47,613       21,101      34,611




CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE SIX MONTHS ENDED 30 JUNE 2008




                                      Share  Merger
                     Share   Share    based reserve Retained
                   capital premium payments           losses    Total
                     $'000   $'000    $'000   $'000    $'000    $'000
Six months ended 30 June
2008
At 1 January 2008  11,997  79,389    1,733   11,709  (4,136) 100,692
Share options
exercised              89     730        -       -         -     819
Share issues less
costs                 623  17,917        -       -         -  18,540
Share based
payment charge          -       -   11,878       -        -   11,878
Loss for the
period                  -       -        -       -  (10,194) (10,194)
At 30 June 2008    12,709  98,036   13,611  11,709  (14,330) 121,735


Six months ended 30 June
2007
At 1 January 2007  11,047  56,506      851  11,709   (6,797)  73,316
Share based
payment charge          -       -      328       -        -      328
Profit for the
period                  -       -        -       -    1,064    1,064
At 30 June 2007    11,047  56,506    1,179  11,709   (5,733)  74,708



NOTES TO THE HALF-YEARLY FINANCIAL REPORT
FOR THE SIX MONTHS ENDED 30 JUNE 2008



1.      Basis of preparation
This half-yearly financial report, which includes a condensed set  of
financial statements of the  Company and its subsidiary  undertakings
("the Group") has been prepared using the historical cost  convention
and  in  accordance  with   the  International  Financial   Reporting
Standards ("IFRS") including IAS 34 'Interim Financial Reporting' and
IFRS 6  'Exploration  for and  Evaluation  of Mineral  Reserves',  as
adopted by the European Union ("EU")

This condensed set of financial  statements for the six months  ended
30 June 2008 is unaudited and does not constitute statutory  accounts
as defined in Section 240 of the Companies Act 1985.  They have  been
prepared using accounting  bases and policies  consistent with  those
used in the preparation  of the audited  financial statements of  the
Company and the Group for the  year ended 31 December 2007 and  those
to be  used in  the  year ending  31  December 2008.   The  financial
statements for the year ended 31 December 2007 have been delivered to
the  Registrar  of  Companies  and  the  auditors'  report  on  those
financial statements was unqualified and did not contain a  statement
made under  Section 237(2)  or Section  237(3) of  the Companies  Act
1985.

This half-yearly  financial  report  was approved  by  the  Board  of
Directors on 29 September 2008.


2.      Segmental information

The Group  operates a  single class  of business  being oil  and  gas
exploration and production.  All revenue  relates to income from  the
Group's oil and gas assets, and arose in USA.

The Group (loss)/profit  for the period  is analysed by  geographical
area as follows:


                                                        Year ended 31
                               Six Months ended 30 June   December
                                       2008        2007          2007
                                      $'000       $'000         $'000
USA                                  5,991       6,096        10,541
Syria                                 (488)       (332)         (932)
Iraq                                  (320)       (313)         (758)
Common costs                       (13,782)     (1,447)       (3,348)
Group's (loss)/profit before
interest                            (8,599)      4,004         5,503
Net finance costs and
unwinding of discount                 (725)     (1,721)         (285)
Taxation                              (870)     (1,220)       (2,557)
(Loss)/profit for the period       (10,194)      1,063         2,661




NOTES TO THE HALF-YEARLY FINANCIAL REPORT
FOR THE SIX MONTHS ENDED 30 JUNE 2008

3.      (Loss)/earnings per share

The calculation of the basic and diluted (loss)/earnings per share is
based on the following:


                             Six months ended 30 June   Year ended 31
                                                             December
                                     2008          2007          2007
                                    $'000         $'000         $'000
                              except  per   except  per   except  per
                            share amounts share amounts share amounts
(Loss)/profit attributable       (10,194)        1,063         2,661
to equity holders
Basic (loss)/earnings              (9.02)         1.03          2.48
(cents per share)
Diluted (loss)/earnings            (9.02)         1.02          2.37
(cents per share)

                                     2008          2007          2007
Weighted average number of
shares:                            Number        Number        Number
For basic (loss)/earnings
per share                    112,976,368   103,018,750   107,223,298
Options outstanding            3,118,533     1,120,712     5,184,859
For diluted (loss)/earnings
per share                    116,094,901   104,139,462   112,408,157


The calculation of basic (loss)/earnings per share is based on the
(loss)/profit attributable to equity shareholders and the weighted
average number of ordinary shares in issue during the year. The
diluted (loss)/earnings per share is calculated using the weighted
average number of ordinary shares in issue on the assumption of
conversion of all dilutive potential ordinary shares. The diluted
loss per share has been kept the same as the basic loss per share as
the conversion of the share options decreases the basic loss per
share, thus being anti-dilutive.

4.      Property, plant and equipment

                                   Oil and gas
                                  properties - Other plant &
                                           USA     equipment    Total
                                         $'000         $'000    $'000
Cost:
At 1 January 2008                      67,628           310   67,938
Additions                               3,444           220    3,664
Disposals                                   -           (22)     (22)
At 30 June 2008                        71,072           508   71,580

Accumulated
depreciation/impairment:
At 1 January 2008                     (20,847)         (166) (21,013)
Depreciation charge for the
period                                 (2,020)          (66)  (2,086)
Disposals                                   -            11       11
At 30 June 2008                       (22,867)         (221) (23,088)
Net book value at 30 June 2008         48,205           287   48,492

Net book value at 31 December
2007                                   46,781           144   46,925

NOTES TO THE HALF-YEARLY FINANCIAL REPORT
FOR THE SIX MONTHS ENDED 30 JUNE 2008


5.      Intangible assets


                          Exploration and evaluation Computer
                                      assets - Syria Software   Total
                                               $'000    $'000   $'000
Cost:
At 1 January 2008                            28,576       50  28,626
Additions                                     7,605       75   7,680
At 30 June 2008                              36,181      125  36,306

Accumulated
depreciation:
At 1 January 2008                                 -      (33)    (33)
Charge for the period                             -      (12)    (12)
At 30 June 2008                                   -      (45)    (45)
Net book value at 30
June 2008                                    36,181       80  36,261

Net book value at 31
December 2007                                28,576       17  28,593


Commercial oil production commenced in July 2008 at the Khurbet East
Field in Syria, which is likely to result in substantially all the
assets currently classified above as Exploration and Evaluation
Assets being reclassified as Oil & Gas Properties within Property,
Plant & Equipment (note 4).

6.      Trade and other receivables


                                30 June  30 June  31 December
                                   2008     2007         2007
                                  $'000    $'000        $'000

Trade receivables                 3,880    3,704        4,491
Other receivables                 5,903    3,757        3,701
Underlift                           919      919          919
Corporation tax recoverable          70      740            -
Prepayments and accrued income    2,725    2,741        2,043
                                 13,497   11,861       11,154


Underlift arose  as  a result  of  the  acquisition of  oil  and  gas
properties in  May  2004.  Underlift  represents  a right  to  future
economic benefit (through  entitlement to  receive equivalent  future
production), which constitutes  an asset.  This amount  is due  after
more than one year.

Other receivables includes an insurance receivable of $4.3 million at
30 June  2008 which  represents  amounts recoverable  from  hurricane
repairs carried out  by the  Group following  Hurricanes Katrina  and
Rita in 2005. This amount has now been received in full.


NOTES TO THE HALF-YEARLY FINANCIAL REPORT
FOR THE SIX MONTHS ENDED 30 JUNE 2008



7.      Trade and other payables



                            30 June  30 June  31 December
                               2008     2007         2007
                              $'000    $'000        $'000

Trade payables                6,071    8,772        6,194
Other payables                2,660    4,100          270
US Corporation tax payable       -        -            56
UK Corporation tax payable        9      199          152
                              8,740   13,071        6,672



8.      Provision for decommissioning

The provision for decommissioning relates to the expected future
costs of plugging and abandoning the oil and gas properties held by
Gulfsands Petroleum USA, Inc and Darcy Energy LLC.  At 30 June 2008
the oil and gas properties have estimated plugging and abandonment
dates between 2008 and 2035. The portion of the provision for
decommissioning expected to be settled within a year totalling
approximately $2.5 million is included in current liabilities and the
remainder totalling approximately $10.2 million is included in
non-current liabilities in the consolidated balance sheet at 30 June
2008.


The provision for decommissioning was as follows:
                                                     $'000
At 1 January 2008                                  11,987
Liabilities settled during the period                (398)
Unwinding of discount on decommissioning provision  1,128
At 30 June 2008                                    12,717
Less: current portion                              (2,520)
Non-current portion                                10,197






NOTES TO THE HALF-YEARLY FINANCIAL REPORT
FOR THE SIX MONTHS ENDED 30 JUNE 2008



9.      Share capital

                                30 June         30 June   31 December
                                   2008            2007          2007
                                 Number          Number        Number
Authorised:
Ordinary Shares (par value
5.714 pence per share)     175,000,000     175,000,000   175,000,000
                           175,000,000     175,000,000   175,000,000


                                30 June         30 June   31 December
                                   2008            2007          2007
                                  $'000           $'000         $'000
Allotted, called up and
fully paid:
117,472,500 (30 June 2007
-  103,018,750; 31
December 2007 -
111,178,750) ordinary
shares of 5.714 pence each      12,709          11,047        11,997

The movements in share capital and options are
summarised below:
                                              Number of     Number of
                                        ordinary shares share options
At 1 January 2008                          111,178,750     5,413,750
Shares issued for cash                       5,500,000             -
Share options granted                                -     5,193,750
Share options                                  793,750      (793,750)
exercised for cash
Share options expired                                -      (568,750)
At 30 June 2008                            117,472,500     9,245,000



10.       Share based payments


                                        30 June  30 June  31 December
                                           2008     2007         2007
                                          $'000    $'000        $'000
 Charge in respect of share options      11,878      328          882
granted


A charge of $11.8 million was recognised during the period in respect
of the grant of 5,193,750 options under its Share Option Plan.  Given
that approximately 90% of the options granted vested immediately, the
aggregate fair value of those options was expensed during the  period
as required by IFRS  2. The estimated fair  value of the options  was
calculated using  a  Black-Scholes  option pricing  model,  using  an
underlying share price volatility of  68.63% and a risk-free rate  of
4.42%

NOTES TO THE HALF-YEARLY FINANCIAL REPORT
FOR THE SIX MONTHS ENDED 30 JUNE 2008


10.    Share based payments (continued)

The share options granted during the period were as follows:


Number of options Grant date   Option price Fair value Maturity
        1,000,000   8 May 2008 £1.75        $2.30      5 years
        3,625,000 13 May 2008  £1.88        $2.37      5 years
          568,750 17 May 2008  $0.43        $4.23      1 month


The options granted on 17 May 2008 were issued to Nordman Continental
SA, a company owned by a discretionary trust of which the children of
Mr.  Mahdi  Sajjad,  a  director   of  the  company,  are   potential
beneficiaries. They were granted to replace a like number of  options
which expired unexercised on 1  January 2008. These options were  not
exercised in the two months prior to expiry because Mr. Sajjad was in
possession of unpublished price sensitive information throughout that
period (i.e. close period under  AIM rules). The replacement  options
were exercised immediately upon granting of the options.

11.       Post balance sheet events

Subsequent to 30 June  2008, a further  1,745,000 share options  were
granted, of which 1,500,000 were to Richard Malcolm conditional  upon
him taking  up his  appointment  as Chief  Executive Officer  of  the
Group. 175,000 options have  also been exercised  since 30 June  2008
raising cash proceeds of $99,750.

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