Altona CTL and LNG Report

28th August 2012

THE FUTURE OF AUSTRALIA'S CLEAN ENERGY

Altona Energy ("the Company") puts the case for Arckaringa coal delivering South Australia's future clean energy requirements at a conference in Brisbane

Altona Energy (AIM: ANR) is pleased to announce that at the Australian Syngas Association inaugural annual conference in Brisbane held today, Chris Schrape, the Company's Managing Director, made a presentation featuring a paper on the future of Australia's clean energy and the part that the Company's 49% owned Arckaringa coal-to-liquids project could play. The paper compares current and planned LNG projects with coal-to-liquids projects and provides economic analyses of the two technologies. The Executive Summary is reproduced below and the full report is available from the Company's web site at www.altonaenergy.com

EXECUTIVE SUMMARY

·; The report has been written to put the case for the co-development of the Liquid Natural Gas (LNG) and Coal to Liquid (CTL) industries in Australia, and to compare the respective strengths and weaknesses of the two sectors.

·; Australia has clear ambitions to become the leading supplier of LNG in the world, with some AUS$170bn of investment already committed and another AUS$100bn for further LNG investment planned. Indeed, Australian LNG projects under construction now represent more than 70 per cent of all LNG plants under construction globally.

·; However, a Business Council of Australia report recently noted that resources projects in Australia are 40 per cent more expensive than in the USA, and that the Australian labour-force on such projects is 60 per cent less productive that its US counterparts.

·; And these worrying statistics are only likely to get worse in the medium term, with substantial reductions in US shipping time and costs to Asia when the Panama canal widening is completed in 2014 which would allow lower cost USA LNG to become commercially available in Australia's prime market.

·; There may be an alternative solution however: the CTL industry. Coal is cheap to produce, is more predictable than LNG in terms of quality and reserves, and Australia has plenty of it, being the largest exporter in the world.

·; Coal has always been considered as a polluting source of energy, but now coal gasification is gaining far more friends in the environmental world internationally, for the production of chemicals, electricity and synfuels (coal-based synfuels contain no carcegenes, aromatics or sulphur and minimum particulates)

·; Gasified coal can be converted into Diesel, Naptha, Jetfuel, Methanol, Gasoline, Fertilisers, Petrochemicals and electricity. The by-products are CO2, water and sulphur dioxide (SO2), which can be processed into commercial products. The only effluent is an inert vitrified ash, which is used in construction and for road fill.

·; There is enormous potential in the CTL market: the Arckaringa coal asset in South Australia alone could sustain fuel production of some 30,000 Barrels per Day (BPD) for 70 years or, in other words, the total amount of fuel imported by Australia in 2011

·; It is clear that Australia can establish CTL as a key plank in its long term clean energy strategy to provide a reliable and stable source of chemicals, energy and fuels; firstly to meet its own energy needs, and secondly to export to its Asian neighbours.

The paper's author, Executive Technical Director Peter Fagiano, commented: "A rational overview of economic and political issues will allow CTL to be established as a long term stable source of chemicals, energy and fuels to meet firstly, the needs of Australia and where appropriate, the surplus to be exported to the Asian region. CTL is set to become an integral component of Australia's energy future."

For further information, please visit www.altonaenergy.com or contact:

About Altona Energy

Altona Energy is listed on the London Stock Exchange's AIM market. Its current focus is firmly on the evaluation and development of the Company's 49% interest in its flagship coal-to-liquids Arckaringa Project to exploit the huge coal resources contained in three exploration licences covering 2,500 sq. kms in the northern portion of the Permian Arckaringa Basin in South Australia. The Project is designed to include a modern, combined-cycle power station adding 560Mw to the national grid and to produce clean burning fuel for Australia and the world from a resource equivalent to 7.8 billion barrels. Altona Energy has forged a Joint Venture with CNOOC New Energy Investment Co., Ltd., a subsidiary of the China National Offshore Oil Corporation (CNOOC), to complete the Project Bankable Feasibility Study and expedite the Project's development.

In addition to its Arckaringa interest, Altona Energy holds interests in two coal exploration licences in the Xinjiang Autonomous Region of the People's Republic of China. These interests are expected to provide early cash flow to enable the Company to progress the Arckaringa project and to continue to investigate additional opportunities to deploy the management team's expertise in clean energy.

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