Final Results

Kern River PLC
30 March 2000


                               KERN RIVER PLC                                
    Preliminary statement of results for the year ended 30 September 1999     

CHAIRMAN'S STATEMENT

The Board remains focused on maximising value for shareholders from the two
oil fields in which Kern River holds majority operating interests through its
subsidiary, CSV Holdings Inc. ('CSV').

For the year ending 30th September 1999 the Group incurred an overall loss of
£199,721 (1998 : £146,693).  Income stemmed from the Starks field in Louisiana
where we achieved Gross Oil production of some 61,000 barrels, compared with
69,000 barrels in the previous year.

The results reflect the fact that, during that same period, everyone in the
upstream oil industry was being affected by the depressed market prices for
Crude Oil.  In the case of Kern River it was again possible to minimise such
losses through low corporate overheads and by effecting ultra tight controls
to ensure maximum operational efficiency.
 
Oil Price

For the twelve month period of this report, oil values were their lowest for
several years.  At the beginning of the period (October 1998) CSV was
realising an average of only $12.50 per barrel for Louisiana Crude.  These
prices continued to fall and reached a low of $8.50 per barrel by March 1999.

Your Directors share growing confidence within the oil industry that much of
the universal improvement to Crude Oil prices since the Summer of 1999 will be
sustained.  By September (our year end) we were able to realise $19.80 per
barrel and prices have continued to rise.  In January 2000, our gross revenues
were in excess of $140,000, the most ever achieved in a month and equating to
an average price of $22.50 per barrel for Starks production.
  
The Group's Reserves and their Value

Independent Engineers have reviewed the level of our Proven Reserves
(confirmed at 5.3 million barrels) and their worth, which they assess to have
a Net Present Value of $33.6 million (£21 million); NPV after discount @ 10%
per annum.  These assessments were based on constant oil prices of $18.50 per
barrel at Nukern and $20.83 per barrel at Starks.

The on-shore location and nature of our Proven Reserves are an added
attraction to low risk investment.  There are also opportunities to prove up
further oil  reserves, especially at Starks. 

The Starks Field, Louisiana

For Starks, the independent assessment confirmed Net Proven Reserves of 1.06
million barrels as at 1st October 1999 providing a Net Present Value of $7.37
million (£4.6 million); NPV after discount @ 10% per annum.  It is clear that
the Starks field would benefit from a progressive increase in the number of
producing wells from its soundly mapped and predictable reservoir.

At Starks, further exciting opportunities exist for expansion of the reserve
base by way of step-out drilling.  The rim of the dome is virtually unexplored
for oil, yet lies within the leasehold of the Group.  We feel an intensive
geological study of the rim area could point to additional reserves.

The Nukern Lease, Kern County, California

For Nukern, the independent assessment confirmed Net Proven Reserves of 4.27
million barrels as at 1st October 1999 providing Net Present Value of $26.3
million (£16.4 million); NPV after discount @ 10% per annum. 

Natural drive production at Nukern has protected CSV ownership of the lease. 
Only small quantities of this heavy oil can be produced by 'natural drive' so
production has to be stimulated by heating the oil in the ground.  

Circumstances are now more favourable to go forward with investment in the
steamflood technique for Enhanced Recovery which has been employed so
successfully by Arco and Texaco on neighbouring leases.  Our earlier studies
confirm this to be the way to ensure the best economic return.  Whilst it
remains necessary to invest in steam generation on the Nukern lease, much of
the other infrastructure for steam injection into the wells, oil/water
separation, water injection and oil storage is already in place.

Loan Note

Ultrasis plc, formerly Villiers Group plc ('Ultrasis'), is one of our major
shareholders.  The $2.5 million loan from a subsidiary of Ultrasis was due to
be paid in two equal instalments, the first (for $1,250,000) being payable on
20th October 2000 and the second on 20th April 2001.  To compensate for low
oil prices during the year ending 30th September 1999, we drew down £140,000
on the conditional loan facility from Ultrasis to fund our Working Capital
requirements.  Since then a further £100,000 has been drawn down against this
facility.

Repayment of the £240,000 Working Capital loan has been set for October 2001
whilst repayment of the original loan has been deferred to 1st October 2001
for the first instalment and 1st April 2002 for the second instalment.

The Way Ahead
 
The Board continue to take a very positive view of the size, nature and
location of the Group's Reserves.  Kern River is a prime candidate to benefit
from the return in confidence to the Oil Sector and your Directors are
actively reviewing options for the next steps in the development of our
reserves.  Our various investigations include the possibility of farming out,
or perhaps to secure joint venture partners, at one or other or even both
fields.


I would like to take this opportunity to acknowledge those shareholders who
have continued to support Kern River during these past twelve months.

Neville A. Brown, 
Chairman
30 March 2000

KERN RIVER PLC

CONSOLIDATED PROFIT AND LOSS ACCOUNT                     
Year ended 30 September 1999

                                                     1999        1998
                                            Note        £           £

TURNOVER                                          340,147     387,138

Cost of sales                                     475,227     399,379
                                                  -------     -------

GROSS LOSS                                       (135,080)    (12,241)

Administrative expenses                            60,901     154,150
                                                  -------     -------
OPERATING LOSS                                   (195,981)   (166,391)
 
Interest receivable                                 4,083      19,817
Interest payable                                   (4,005)       (119)
                                                  -------     -------
LOSS ON ORDINARY ACTIVITIES                     
BEFORE TAXATION                                  (195,903)   (146,693)

Tax on loss on ordinary activities         2       (3,818)          -
                                                  -------     --------
LOSS FOR THE YEAR                                (199,721)   (146,693)
                                                  =======     =======

LOSS PER SHARE - basic                     3        1.74p      1.28p
                                                    =====      =====
LOSS PER SHARE - diluted                   3        1.74p      1.28p
                                                    =====      =====

All disclosures relate only to continuing operations.



STATEMENT OF TOTAL RECOGNISED 
GAINS AND LOSSES
                                                     1999        1998
                                                        £           £

Loss for financial year                          (199,721)   (146,693)

Currency translation differences                  126,445    (203,795)
                                                  -------     -------
Total recognised gains and losses of the year     (73,276)   (350,488)
                                                  =======     =======

KERN RIVER PLC

CONSOLIDATED BALANCE SHEET
As at 30 September 1999

                                                     1999        1998
                                                        £           £
FIXED ASSETS
Tangible assets                                 6,373,538   6,052,941
                                                ---------   ---------

CURRENT ASSETS
Debtors                                            62,403      70,869
Cash at bank and in hand                           96,797     202,919
                                                 --------    --------
                                                  159,200     273,788
CREDITORS - amounts falling due 
  within one year                                 165,482      73,094
                                                 --------     -------
NET CURRENT (LIABILITIES)/ASSETS                   (6,282)    200,694
                                                 --------     -------
TOTAL ASSETS LESS CURRENT LIABILITIES           6,367,256   6,253,635

CREDITORS - amounts falling due 
  after more than one year                      1,658,004   1,471,107
                                                ---------   ---------
TOTAL NET ASSETS                                4,709,252   4,782,528
                                                =========   =========


CAPITAL AND RESERVES

Called up share capital                         2,875,000   2,875,000
Share premium                                     381,325     381,325
Merger reserve                                  2,197,944   2,197,944
Exchange equalisation reserve                    (225,337)   (351,782)
Profit and loss account                          (519,680)   (319,959)
                                                ---------   ---------
EQUITY SHAREHOLDERS' FUNDS                      4,709,252   4,782,528
                                                =========   =========



KERN RIVER PLC 

CONSOLIDATED CASHFLOW STATEMENT
Year ended 30 September 1999

                                                     1999        1998
                                            Note        £           £

NET CASH OUTFLOW FROM OPERATING ACTIVITIES    6   (17,530)   (155,595)

RETURNS ON INVESTMENTS AND SERVICING 
 OF FINANCE                                   7     4,078      19,613

CAPITAL EXPENDITURE AND FINANCIAL 
  INVESTMENT                                  7  (230,141)   (341,696)

TAX PAID                                           (3,818)        -
                                                 --------     -------
NET CASH OUTFLOW BEFORE FINANCING                (247,411)   (477,678)

FINANCING                                     7   140,000         -
                                                 --------     -------
DECREASE IN CASH                                 (107,411)   (477,678)
                                                 ========     =======

RECONCILIATION OF NET CASHFLOW TO 
  MOVEMENT IN NET DEBT

DECREASE IN CASH IN YEAR                         (107,411)   (477,678)

CASH INFLOW FROM INCREASE IN NET DEBT            (140,000)      -
TRANSLATION DIFFERENCES                           (45,608)     95,822
                                                ---------    ---------
MOVEMENT IN NET DEBT IN THE YEAR                 (293,019)   (381,856)

NET DEBT AT 1 OCTOBER 1998                     (1,268,188)   (886,332)
                                                ---------    --------
NET DEBT AT 30 SEPTEMBER 1999                  (1,561,207) (1,268,188)
                                                =========   =========
           

KERN RIVER PLC

NOTES TO THE PRELIMINARY STATEMENT

1.   NATURE OF THE FINANCIAL INFORMATION

The financial information set out above does not constitute full accounts for
the purposes of section 240 of the Companies Act 1985. The financial
information has been extracted from the Company's accounts for the year ended
30 September 1999 on which the auditors, BDO Stoy Hayward, have given an
unqualified report.

As referred to in the Chairman's Statement, the Group has agreed with Ultrasis
plc, a major shareholder in the Company, an extension of the repayments
totalling $2.5million and £140,000 due to Ultrasis group. As a result $1.25
million and £140,000 are now due to be repaid in October 2001, and the balance
of $1.25 million in April 2002. Accordingly, after making enquiries, the
Directors have formed a judgement at the time of approving the accounts that
there is a reasonable expectation that the Group has adequate resources to
continue its operations for the foreseeable future. For this reason, the
Directors continue to adopt the going concern basis in preparing the accounts.

2.   TAX ON LOSS ON ORDINARY ACTIVITIES

                                                     1999        1998
                                                        £           £
Overseas tax                                        3,818          -
                                                   ======       =====

No liability to UK corporation tax arises on the results for the year.  The
Company has tax losses available for offset against future taxable profits in
the UK.

3.   LOSS PER SHARE

The calculation of loss per share and the diluted loss per share is based on
the loss for the year of £199,721 and on the weighted average number of
ordinary shares in issue of 11,500,000. (1998: Loss of  £146,693, shares in
issue 11,500,000).

4.   DIVIDENDS

No dividend is proposed.

5.   FOREIGN CURRENCIES

The results of subsidiary undertakings reporting in foreign currencies are
translated at the average rate ruling in the accounting period (US$1.63: £1;
1998 US$1.66: £1) and the assets and liabilities at the rate ruling at the
balance sheet date (US$1.65: £1; 1998 US$1.70: £1).

6.   RECONCILIATION OF OPERATING LOSS TO NET CASH OUTFLOW FROM OPERATIONS


                                                     1999        1998
                                                        £           £
Operating loss                                   (195,981)   (166,391)
Depreciation and depletion charges                102,766      92,984
Decrease in debtors                                 8,466     (31,086)
Increase/(decrease) in creditors                   67,219     (51,102)

                                                  -------     -------
Net cash outflow from operating activities        (17,530)   (155,595)
                                                  =======     =======


7.   ANALYSIS OF CHANGES IN CASHFLOWS DURING THE YEAR

                                                     1999        1998
                                                        £           £
RETURNS ON INVESTMENTS AND SERVICING OF FINANCE 
Interest received                                   4,083      19,732
Interest paid                                          (5)       (119)
                                                    -----      ------
                                                    4,078      19,613
                                                    =====      ======
CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT 
Purchase of tangible fixed assets                (230,141)   (341,696)
                                                 ========     =======
FINANCING
Working capital loan                              140,000       -
                                                  =======     =======


Copies of the report and accounts of the Company for the year ended 30
September 1999 are being sent to shareholders

For further information please contact:

Neville A. Brown                                    01277 227686

Garry Butterfield                                   01902 456767