Arckaringa Project Update

8 December 2011

Altona Energy Plc (AIM: ANR)

("Altona" or "the Company")

Arckaringa Project Update

Drilling Programme Approval and BFS Work Programme

Altona Energy Plc, the AIM quoted processed fuels and energy developer, today announces key approvals for Bankable Feasibility Study ("BFS") work from the South Australian Government and the ratification of the 2012 work programme with its joint venture ("JV") partner CNOOC-New Energy Investment ("CNOOC-NEI"). The Arckaringa project is a major coal-to-liquids ("CTL") fuel and power project located in South Australia (the "Project").

Highlights

·; Key approvals granted by the South Australian Government for the Arckaringa work programme

Ø Program for Environment Protection and Rehabilitation ("PEPR") approved

Ø Water permitting and work area clearance processes under way - drilling programme contractors to be selected with programme expected to commence as soon as practicable in 2012

·; Approval of key elements of the continuing Stage 1 work programme for completion during 2012 by the Arckaringa Joint Venture Management Committee:

Ø drilling programme, coal sampling and test work

Ø studies covering, inter alia, mine design, environmental impact assessment, preferred coal conversion options, infrastructure requirements product marketing and carbon capture, storage and utilisation

Chris Lambert, Chairman of Altona, commented that:

"Following a year of further delineation work of the coal feedstock sources and suitability for key processed fuels production, our year end JV partner meeting with CNOOC-NEI concluded a detailed work plan for BFS programmes for completion in 2012. Support for new fuels and power sources from the South Australian Government remains extremely strong and CNOOC-NEI have completed all delineation work required for them to push ahead with the next stage of the BFS."

Mr. Liu Suli, Vice President of CNOOC-NEI, commented that:

"The Arckaringa Project is a very important project for CNOOC-NEI. The company is committed to working closely with Altona and is giving high priority to the work needed to establish the feasibility of the Project".

Arckaringa Project - Drilling Programme Approval

The Joint Venture partners have been successful in their application to the Department of Manufacturing, Innovation, Trade, Resources and Energy for the approval of a PEPR, formerly called an Exploration Works Approval, which encompasses a detailed coal and hydro-geological drilling programme. The water permitting and work area clearance processes are already under way in the expectation thatfield work can commence in the first half of 2012. The programme and the resultant reports are anticipated to take approximately six months to complete.

The drilling programme will focus on the EL 4512 (Wintinna) area, feeding further data into the mine design studies and coal conversion studies during the coming year and will include:

·; boreholes to further delineate mine design parameters and upgrade the geological model and JORC resource estimates;

·; bulk sampling of coal to finalise coal feedstock characteristics for coal conversion options (including gasification, coal drying, briquetting etc);

·; detailed hydro-geological testing to refine the model and lay the basis for the mine dewatering and groundwater management plan.

The programme will cover up to 34 boreholes. The first six holes will be multi-purpose, for priority water testing and coal sample extraction, and then will be followed by 16 boreholes variously covering hydro-geological testing/observation, coal drilling and/or geotechnical assessment. The requirement for a further 12 boreholes will be assessed as the drilling programme proceeds. The cost of the drilling, as well as other elements of the 2012 work programme, is covered by CNOOC NEIA's funding commitment for the BFS.

Arckaringa JV Management Committee Meeting and Decisions

At their Joint Venture Management Committee meeting in Beijing on 29 November 2011, Altona and its JV partner, CNOOC-NEI, endorsed the results of the Project BFS work programme for 2011 and approved the key elements of the continuing Stage 1 work programme for completion during 2012.

The reports commissioned by CNOOC-NEI from the China National Administration for Coal Geology ("CNACG"), and subsequently verified by the Mineral Resources and Reserves Evaluation Centre of China's Ministry of Land Resources during 2011, have confirmed the extent of the Arckaringa coal resources (particularly those in the Wintinna deposit), and have underlined CNOOC-NEI's confidence in progressing the work programme at Arckaringa.

The key elements of the continuing Stage 1 work programme for completion during 2012 include the drilling programme, the coal sampling and test work and the following preparatory studies to underpin the detailed design work in Stage 2 of the BFS:

·; mine design to Chinese standards;

·; preferred coal conversion options (including coal upgrading, CTL and power);

·; groundwater management and utilisation;

·; project infrastructure requirements;

·; transport and port logistics;

·; product marketing;

·; environmental impact assessment;

·; carbon capture, storage and utilisation;

·; ongoing technical support requirements.

Strong Support from the South Australian Government

Recent meetings between Altona and Mr. Tom Koutsantonis, the South Australian Minister for Manufacturing, Innovation, Trade, Mineral Resources and Energy, have underlined the importance of Arckaringa to the State's energy future. At the most recent meeting in Adelaide in November 2011, Mr. Koutsantonis acknowledged:

"Altona Energy's proposal for the Arckaringa Basin is one of the most exciting developments in the State at the moment". Minister Koutsantonis further added: "I am very excited about Arckaringa. It is one of the most important strategic projects in the State and lack of diesel is the number one fuel issue we face".

**ENDS**

For further information, please contact:

Notes:

Altona Energy Plc is an AIM listed Australian based energy company. Altona's primary asset is a 49% interest in the Arckaringa Coal-to-Liquids (CTL) Project, which contains an estimated 7.8 billion tonne coal resource (non-JORC) in the Arckaringa Basin of South Australia (JORC-compliant: 1.287 billion tonnes).

Altona's joint venture partner in the Arckaringa Project is Chinese energy major CNOOC New Energy Investment ("CNOOC-NEI") with a 51% interest. CNOOC-NEI is a subsidiary of Chinese oil major China National Offshore Oil Corporation. Under the Joint Venture Agreement, CNOOC-NEI is funding and operating the bankable feasibility study ("BFS") for the Arckaringa Project with a budget of A$40 million. The Base Case for the Arckaringa BFS is for an integrated coal mine at the Wintinna deposit and a 10 million barrel per year coal-to-liquids plant, with a 560MW co-generation power facility.

The Arckaringa coal deposits are considered by the Board to be one of the world's largest untapped energy banks. Per Jacobs Engineering's study for the Company, assuming a 50% conversion of CTL fuels and 50% to synthetic gas ('Syngas'), Arckaringa total coal resources (both JORC and non-JORC) would represent respectively 28% and 29% of current North Sea remaining proven reserves of 10,900mb of oil and 114,800 bcf of natural gas.

It is envisaged that numerous new additional projects may also be potentially opened up at Arckaringa to create a multi-project, multi-national business.

CTL

The quality of the Company's coal is suitable for conversion to synthetic gas ('Syngas'), using existing commercial CTL technologies. The process involves two major stages;

1. gasification to produce Syngas rich in hydrogen and carbon,

2. a liquefication stage where the Syngas is reacted over a catalyst to produce high quality, ultraclean synthetic fuels and chemical feedstocks.

CTL is a prime example of clean coal technology - the associated combined cycle units produce negligible sulphur oxides, significantly less nitrogen oxides and 10-20% less CO2 per unit of power generated than a conventional coal fired plant, whilst carbon capture and storage offers the potential to reduce the overall greenhouse gas emissions from CTL to below the 'well to wheel' level of fuels derived from crude oil. The technology is best demonstrated in South Africa, where currently 30% of the country's gasoline and diesel fuel needs are met through CTL plants.

In accordance with the guidelines of the AIM Market of the London Stock Exchange, Peter Fagiano, Executive Director of Altona Energy Plc, is a chartered engineer with over 45 years experience in the oil and gas and process industry sectors. Mr Fagiano is the qualified persons as defined in the London Stock Exchange's Guidance Note for Mining and Oil and Gas companies who has reviewed and approved the technical information contained in this announcement.