Half Yearly Report

EXILLON ENERGY PLC

26 August 2010

Exillon Energy plc interim results for the six months to 30 June 2010

Exillon Energy plc ("Exillon Energy", the "Company" or the "Group") (EXI.LN), a British independent oil producer with assets in two oil-rich regions of northern Russia, Timan-Pechora ("Exillon TP") and West Siberia ("Exillon WS"), today issues its interim results for the six months to 30 June 2010.

Group highlights

·; Production - significant increase in output recorded

o Exillon Energy has reached a production of 6,500 bbl/day, and is expected to further increase combined production to 9,000 bbl/day in Q4 2010

o The Group started the reporting period with production of 2,400 bbl/day and finished the reporting period with production of 5,500 bbl/day, achieving an average daily production rate of 3,195 bbl/day, an increase of 84% over the comparable period in 2009 (2009: 1,732 bbl/day)

·; Reserves - booked volumes grow at 1P, 2P and 3P levels

o Group 1P reserves increased by 23% to 80 million barrels, 2P reserves increased by 5% to 137 million barrels and 3P reserves increased 6% to 391 million barrels

·; Financial - well funded for operational programmes

o Equity offering raised $32.2 million in the second quarter

o Group cash balance of $35.0 million at 30 June 2010 with $0.9 million of debt

Regional highlights

·; Exillon WS

o Achieved 100% drilling success rate across seven wells drilled in 2010

o Completed 28 km pipeline allowing year round production to start on June 6th

o Current oil production in Exillon WS has reached 3,150 bbls/day, and is expected to increase further to 5,500 bbls/day in Q4 2010

·; Exillon TP

o Acquired the North Kenyunskoye licence adjacent to Exillon TP's ETP V field

o Successfully completed workover of 7 wells in Timan Pechora leading to an increase in production from 2,050 bbl/day to 3,350 bbl/day

Dear Shareholders,

This has been an extremely important period in our company's development. During the first half of 2010 the Group began its transformation from an exploration company to one increasingly focused on delivering long term production growth. Key accomplishments during the first half of the year have included: the drilling of seven successful wells on time and on budget; the completion of a 28km pipeline and the start-up of year round production at Exillon WS; and production growth from 2,400 bbl/day to 6,500 bbl/day.

As we embark on this program of activity to take us into the next stage of our development, it should be noted that the financial results for the period reflect the capital expenditure undertaken and are not representative of the margins we are confident a more production-oriented business will achieve. The Group is sufficiently well funded to finance our ongoing operational program, and we are confident we will be able to access additional funding as needed.

We continue to demonstrate our commitment to growing our output further. We have completed and are currently testing an additional 11 kms of pipeline to a hard road surface, which will allow the Company to reduce the transportation costs by shortening the distance and switching to higher capacity trucks. In addition the pipeline will reduce road maintenance costs that the Group has incurred previously.

Commencement of oil processing at Exillon WS in October 2010 will provide the Company with more options to sell its oil and to reduce transportation and processing costs further. The Group has already signed an agreement and will start trucking about one third of the oil from Exillon WS to a new counterparty. The new transportation route is about 70km closer than Aki Otir, and has significantly cheaper processing costs.

Outlook

In March 2010 the Group received permission from Transneft to build a direct entry point to the Transneft pipeline, which is a key driver to cost reduction in Exillon WS going forward. The Group expects to complete an entry point to the Transneft pipeline in Q2 2011.

In addition, the Group intends to use the net proceeds it received from the Placing in June for development activities, such as seismic, water injection, drilling and infrastructure. With this additional investment, the Group intends to reach a production target of 14,000 barrels per day in the second quarter of 2011.

More generally, we believe the macroeconomic and operational environment continues to be favourable for our business, and we believe we are well positioned to benefit from the stable commodity prices at a time of rapid production growth.

Alessandro Manghi

CEO

MATERIAL EVENTS AND TRANSACTIONS

License Acquisition

On 25 February 2010, the Group acquired the North Kenyunskoe license in a state auction. The North Kenyunskoye license is largely covered by 2D and 3D seismic, and consists of four main structures with recoverable oil reserves and resources estimated at: C2 - 16 mmbbls; C3 - 3.6 mmbbls; D1 - 8.7 mmbbls.

The North Kenyunskoe license acquisition represents a significant addition to the Company's portfolio, and is currently not reflected in the reserve report prepared by Miller and Lents.

Production

Exillon Energy has reached a production of 6,500 bbl/day, where 3,350 bbl/day comes from the Exillon TP fields, and 3,150 bbl/day comes from Exillon WS. With the construction of additional in-field infrastructure, the Group intends to increase production to 9,000 bbl/day in Q4 2010.

Gross production for the six months to 30 June 2010 averaged 3,195 bbl/day. This represents an 84% increase over the comparable period in 2009 when the average daily production rate was 1,732 bbl/day. The Group's revenue for the period comprised revenues from sales of crude oil and amounted to $27.4 million. 96% of the revenue was derived from Exillon TP, which represents just 41.4% of the Group's 2P reserves and 24.9% of the 3P reserves.

Drilling

Exillon WS drilled seven wells during the period, achieving a 100% drilling success rate. The wells were drilled with an average drilling time of 30 days per well, and at an average cost of $1.2 million. Five wells drilled on EWS I fields were tested and achieved an average test flow rate of 668 bbl/day of water-free oil naturally to surface.

*measures average flow rate only for wells drilled on EWS I field

The EWS-15 well, which was spudded on 29 December 2009, was designed to test the northern extension to the EWS I field. The well flowed water-free oil naturally to the surface with a flow rate of 1,140 bbl/day on a 10 mm choke, and was drilled on a turn-key contract for a total consideration of $0.975 million. The well confirmed the presence of 15.2 m of net oil pay within the Jurassic. This is the thickest net oil pay encountered within the EWS I field to date. The average net oil pay within the Jurassic reservoir of the EWS I field, according to the Miller & Lents September 2009 reserves report, is less than 5 m.

The EWS-34 well, which was spudded on 25 March 2010, was drilled on a turn-key contract in 22 days on the western part of the EWS I field for a total consideration of $0.98 million. The new well encountered the main producing Jurassic P reservoir at 1,807m. Results of wire-line logging have confirmed the presence of 6.2m of net oil pay within the Jurassic. The EWS-34 well has also encountered the Pre Jurassic reservoir at 1,817m. The well flowed water-free oil naturally to the surface with a flow rate of 320 bbl/day on an 8 mm choke from the Pre-Jurassic zone.

The EWS-31 well, which was spudded on 30 March 2010, was designed to test an eastern margin of the EWS I field. The well flowed water-free oil naturally to the surface with a flow rate of 960 bbl/day on a 10 mm choke, and was drilled on a turn-key contract in 23 days for a total consideration of $1.19 million. The well confirmed the presence of 5.9 m of net oil pay within the Jurassic.

The EWS-8 well, which was spudded on 17 April 2010, was drilled on the south-western part of the EWS I field. The well flowed water-free oil naturally to the surface with a flow rate of 450 bbl/day on a 10 mm choke, and was drilled on a turn-key contract in 31 days for a total consideration of $1.4 million. The well reached target depth within the Jurassic P reservoir at 1,827 - 1,833m, confirming the presence of 6 m of net oil pay within the Jurassic. The well was drilled directionally 0.5 km to the west from the existing well pad 3 on the EWS I field, and is now being connected to existing production facilities.

The EWS-35 well, which was spudded on 23 April 2010, was drilled on an eastern part of the East EWS I field. The well flowed water-free oil naturally to the surface with a flow rate of 470 bbl/day on a 12 mm choke. Whilst the average net oil pay within the East EWS I field according to the Miller & Lents May 2010 reserves report is 8.2 m this new well has 14.6m of net pay within the Jurassic. The well reached target depth within the Jurassic P reservoir at 1,837m. The well was drilled directionally to the north-west from the existing well pad 30 on the East EWS I field, and is now being connected to existing production facilities. The well was drilled on a turn-key contract in 43 days for a total consideration of $1.7 million.

The EWS-100 well, which was spudded on 6 May 2010, was drilled on the north-western part of the EWS II field on a turn-key contract in 20 days for a total consideration of $1.2 million. The new well encountered producing Jurassic J2-3 reservoir at 1,933m, and producing Jurassic J4 reservoir at 1,970m. Results of wire-line logging have indicated the presence of 4m of net oil pay within the J2-3 horizon and 12m within the J4 horizon. Testing of the well will be completed in Q1 2011 due to the absence of infrastructure at the EWS II field. Whilst the average net oil pay for the Jurassic reservoir within the EWS II field according to the Miller & Lents September 2009 reserves report disclosed at IPO is around 9m, initial indications suggest that this new well has 16m of net pay within the Jurassic. The well was drilled directionally 1.3 km to the north-west from the existing well pad 1 on the EWS II field. On completion of testing of the Jurassic interval the well will be connected to production facilities.

The EWS-101 well, which was spudded on 26 May 2010, was drilled on the north-eastern part of the EWS II field on a turn-key contract in 18 days for a total consideration of $1.1 million. The new well encountered producing Jurassic J2-3 reservoir at 1,957m, and producing Jurassic J4 reservoir at 1,970m. Results of wire-line logging have indicated the presence of 4.6m of net oil pay within the J2-3 horizon and 9m within the J4 horizon. Testing of the well will be completed in Q1 2011 due to the absence of infrastructure at the EWS II field. Whilst the average net oil pay for the Jurassic reservoir within the EWS II field according to the Miller & Lents May 2010 reserves report is around 9m, technical analysis suggested that this new well has 13.6m of net pay within the Jurassic. The well was drilled directionally to the north-east from the existing well pad 1 on the EWS II field. On completion of testing of the Jurassic interval the well will be connected to production facilities.

Reserves

Based on the updated reserves report effective 1 May 2010 prepared by Miller & Lents, the Group's 1P reserves increased by 23% to 80 million barrels, 2P reserves increased by 5% to 137 million barrels and its 3P reserves increased 6% to 391 million barrels.

Reserve growth mainly originated from Exillon WS, where the total proved ("1P") recoverable oil reserves increased 64% from the previous estimate to 40 million barrels. The estimate of the total proved plus probable ("2P") recoverable oil reserves within Exillon WS has increased 9% from the previous estimate to 80 million barrels, and the estimate of the total proved plus probable plus possible ("3P") recoverable oil reserves within Exillon WS has increased 8% from the previous estimate to 294 million barrels. This increase in reserves is attributable to the first three wells that have been drilled in Western Siberia in 2010, and does not take into account results of additional successful wells drilled after the reporting date.

Operational Management Structure

On 15 March 2010, Exillon moved its operational management centre to Urai (Khanty-Mansiysk Autonomous Okrug, Western Siberia, Russian Federation), close to its Exillon WS assets. The move will reduce administrative costs and improve management oversight, ensuring that the Company has the right management on the ground. Earlier in the year, the Company appointed Yuri Ovcharov to replace David Sturt, who stepped down as Chief Operating Officer. Yuri brings with him an outstanding track record of success throughout his 25 years in the international oil and gas industry. His unparalleled understanding of the geology of the Company's assets and his technical expertise make him the ideal fit for this position.

Placing of Shares

The Group placed 12,552,082 new ordinary shares to institutional investors (the "Placing"). The price per share was 170 pence, resulting in proceeds to the Company of $32.2 million. In addition, as part of the Placing, the Company's Chairman and principal shareholder, sold 9,740,953 ordinary shares in which he had a beneficial interest leaving him with a beneficial interest of 49.9% in the Company's outstanding issued share capital.

CURRENT OPERATIONS AND OUTLOOK

In Q4 2010 the Group intends to increase production to approximately 9,000 bbl/day and achieve considerably higher margins on selling crude oil.

The Group intends to use the net proceeds it received from the Placing in June to fund activities, such as seismic, water injection, drilling and infrastructure. With this additional investment, the Group intends to reach a production target of 14,000 barrels per day in the second quarter of 2011. The Group also expects additional infrastructure investment to improve its economic efficiency.

 The Group continues to assess additional financing opportunities to accelerate development further.

About Exillon:

Exillon Energy is a British listed independent oil producer with assets in two oil-rich regions of Northern Russia: Exillon TP in Timan-Pechora and Exillon WS in West Siberia. Exillon Energy plc is incorporated in the Isle of Man, with an operational centre in Urai, Russian Federation. For further information please visit: www.exillonenergy.com 

FINANCIAL REVIEW

The interim condensed consolidated financial information of Exillon Plc for the 6 month period ended 30 June 2010 have been prepared in accordance with IAS 34 "Interim Financial Statements". Condensed consolidated financial information and notes on pages 11 through to 25 should be read in conjunction with this review which has been included to assist in the understanding of the Group's financial position at 30 June 2010.

Summary

The Group maintained a healthy financial position due to its issuance of new shares in 2010 and its rising production. In June 2010, the Group issued 12,552,082 of new shares with total proceeds of $32.2 million. Costs related to the issuance of new shares amounting to $1.9 million were recorded in the share premium account as directly attributable to the equity cost.

During the reporting period, Group production rose to 5,500 bpd following completion of workovers of 7 wells in Exillon TP and the start of production in Exillon WS.

The Group started to hedge from July a portion of its production. The Group seeks to lock in a positive arbitrage that occasionally exists between export and domestic routes, and enters into a hedge with the purpose of locking in the arbitrage that exists on the trading day.

Income statement

The Group recognized a loss before tax of $9.1 million (2009: $5.2 million loss before bargain purchase gain recognised on the acquisition of 50% of Exillon WS in January 2009 and acquisition of Exillon TP in April 2009). Revenue for the 6 month period ended 30 June 2010 comprised revenues from sales of crude oil and amounted to $27.5 million (2009: $5.6 million), of which $19.6 million or 71% came from export sales and $7.9 million or 29% came from domestic sales. The increase in revenue is driven by higher production volumes. The Group achieved an average realized crude oil price for export sales of $71/bbl (2009: $53/bbl) and for domestic sales of $28/bbl (2009: $25/bbl).

Cost of sales, net of depreciation, depletion and amortisation increased to $12.2 million or 44% of Group's revenue (2009: $3.2 million or 58% of Group's revenue) due to an increase in production of 279% to 578,306 bbl (2009: 152,574 bbl).

The Group's depreciation, depletion and amortisation costs primarily relate to the depreciation of proven and probable reserves and other production and non-production assets. These costs totalled $3.3 million (2009: $0.98 million) or 12% of Group's revenue (2009: 18%). The increase in DD&A costs is driven by higher production volumes.

Selling expenses for the 6 month period ended 30 June 2010 of $13.1 million (2009: $1.53 million) or 48% of Group's revenue (2009: 27%), comprised export duties of $10.3 million (2009: $0.9 million), which represented 53% of the Group's export sales (2009: 34%); transportation services of $1.7 million (2009: $0.6); and other selling expenses of $1.1 million (2009: $0.03 million). Export duty rates increased from the beginning of period by 9%, from $267 per ton to $292 per ton.

Administrative expenses increased by 72% to $7 million (2009: $4.1 million). This is explained by an increase in the total number of employees and ensuing increase in base salaries including associated taxes of $1.6 million. Business travel expenses increased by $0.6 million due to more intensive travel than anticipated. Rent expenses increased by $0.6 million due to providing apartments for employees and rent of the office in Dubai. We believe that going forward, the relocation of our operational management centre to Urai will bring down related administrative costs.

As a result of the above, the Group reported a loss after tax of $8.67 million compared to six months ended 30 June 2009 loss of $5.1 million before bargain purchase. Despite these losses, the Group continues to be well funded and able to finance ongoing operational programmes.

Financial position

In June 2010, the Group issued 12.5 million ordinary shares at a value of $30.3 million net of transaction fees to fund exploration and development activity. With the Group's loss for the six months period of $8.67 million, the Group equity attributable to shareholders increased by $154 million (64%) to $394 million.

As at 30 June 2010, the Group had cash and cash equivalents of $35 million (30 June 2009: $2.3 million; 31 December 2009: $34.3 million) with outstanding borrowing of $0.9 million, equivalent to a net cash position of $34.1 million.

The increase in the cost of property, plant and equipment has been driven by the construction of pipeline, drilling of wells and other field developments in Exillon WS, and the purchase of the North Kenyunskoye license. This was offset by a translation difference due to the strengthening of the US Dollar against the Russian Rouble.

Principal risks and uncertainties

The principal risks and uncertainties affecting the business activities of the Group are set out on pages 24 to 25 of the Directors' Report section of the Annual Report for the year ended 31 December 2009, a copy of which is available on the Company's website at www.exillonenergy.com. The Board continually assesses and monitors the key risks of the business. The principal risks and uncertainties that could have a material impact on the Group's performance over the remainder of the financial year have not changed from those which are set out in the Group's 2009 Annual Report.

The Board continually assesses and monitors the key risks of the business. In accordance with DRT 4.2.7, we summarise below the principal risks that could have a material impact on our business for the remaining six months of the year:

o The Group may be adversely affected by a substantial or extended decline in the prices for crude oil.

o The Group's business depends on exploration and production licences issued by the Russian authorities, which could be suspended, restricted, terminated or not extended.

o Leases relating to some of the Group's oil wells have expired, which may result in a potential inability to operate these wells

o Fluctuations in currency exchange rates may materially and adversely affect the Group's financial results and condition.

o The Group relies on the services of third party providers.

o Most of the crude oil produced by the Group is transported via a single pipeline system operated by an external provider.

o The Group's oilfields are located in areas subject to variable weather conditions which may limit production during certain times of the year.

o The Group could be subject to claims and liabilities under environmental, health, safety and other laws and regulations.

o The Group faces drilling, exploration and production risks which may prevent it from realising profits and may result in substantial losses.

o The Group does not carry the types of insurance normally carried by a business of its size and nature.

o The Company will be subject to restrictions on foreign ownership in future.

o There are high levels of inflation in Russia.

o Russian tax law and practice are not fully developed and are subject to frequent changes.

Directors

The names and functions of the directors of Exillon Energy plc are as listed in the Group's Annual Report for 2009.

Statement of directors' responsibilities

The Directors of the Company as listed on pages 18 to 19 of the Group's 2009 Annual Report, hereby confirm that to the best of their knowledge:

(a) the condensed consolidated interim financial statements have been prepared in accordance with IAS 34 and give a true and fair view of the assets, liabilities, financial position and profit and loss of the Group as required by DTR 4.2.4; and

(b) the interim management report includes a fair review of the information required by DTR 4.2.7 (being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year) and DTR 4.2.8 (being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period).

On behalf of the board of directors of Exillon Energy plc.

Alessandro Manghi

Chief Executive Officer

Contact details:

Exillon Energy plc

Nurlan Assilbekov

Investor Relations +971 56 657 0440

+44 79 2001 5131

Media Contact

Tom Blackwell +44 207 920 2330

Disclaimer

This statement may contain forward-looking statements concerning the financial condition and results of operations of the Group. Forward-looking statements are statements of future expectations that are based on the management's current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements. No assurances can be given as to future results, levels of activity and achievements and actual results, levels of activity and achievements may differ materially from those expressed or implied by any forward-looking statements contained in this report. The Company does not undertake any obligation to update publicly or revise any forward-looking statement as a result of new information, future events or other information.

Independent review report to Exillon Energy plc

Introduction

We have been engaged by the company to review the condensed set of financial information in the half-yearly financial report for the six months ended 30 June 2010, which comprises the Consolidated Balance Sheet, the Consolidated Statement of Comprehensive Income, the Consolidated Statement of Cash Flow, the Consolidated Statement of Changes in Equity and related notes. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial information.

Directors' responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.

As disclosed in note 2, the annual financial statements of the group are prepared in accordance with IFRSs. The condensed set of financial information included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting".

Our responsibility

Our responsibility is to express to the company a conclusion on the condensed set of financial information in the half-yearly financial report based on our review. This report, including the conclusion, has been prepared for and only for the company for the purpose of the Disclosure and Transparency Rules of the Financial Services Authority and for no other purpose. We do not, in producing this report, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial information in the half-yearly financial report for the six months ended 30 June 2010 is not prepared, in all material respects, in accordance with International Accounting Standard 34 and the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.

PricewaterhouseCoopers LLP Chartered Accountants

London 25 August 2010

(a) The maintenance and integrity of the Exillon Energy plc website is the responsibility of the directors; the work carried out by the auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred to the financial statements since they were initially presented on the website.

(b) Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

The notes on pages 15 to 25 are an integral part of this condensed consolidated financial information

The notes on pages 15 to 25 are an integral part of this condensed consolidated financial information.

The notes on pages 15 to 25 form an integral part of this condensed consolidated financial information

The notes on pages 15 to 25 form an integral part of this condensed consolidated financial information

notes to the financial information

7. revenue

8. cost of sales, net of depreciation, depletion and amortisation

9. selling expenses

10. administrative expenses

11. earnings per share

Basic earnings per share ('EPS') is calculated by dividing net profit for the period attributable to ordinary equity shareholders of the Group by weighted average number of ordinary shares outstanding during the period.

The following reflects the income and adjusted share data used in the EPS computations:

12. Property, plant and equipment

* Included within oil and gas properties as at 30 June 2010 $3,311 thousand and as at 31 December 2009 $1,746 thousand relates to decommissioning costs.

13. Inventories

14. trade and other receivables

In determining the recoverability of a trade receivable, the Company considers any change in the credit quality of the trade receivable from the date credit was initially granted up to the reporting date. The concentration of credit risk is limited due to the customer base. Accordingly, the management of the Group believes that there is no further credit provision required in excess of the allowance for doubtful debts.

15. other assets

16. provision for decommissioning

In accordance with the licence agreements the Group is liable for site restoration, clean up and abandonment of the wells upon completion of their production cycle. The provision for future site restoration relates to obligations to restore the oilfield after use. Primarily all of these costs are expected to be incurred at the end of the life of wells up to 2027. They depend on the estimated lives of the wells, the scale of any possible contamination and the timing and extent of corrective actions.

The unwinding of the discount related to future site restoration and abandonment reserve is included within finance costs. The management believes that this estimate of the future liability is appropriate to the size of the fields.

17. trade and other payables

Long-term payables represent payables to Zarubezhneft, which had arisen from the purchase of oil well #15 in January 2009. The amount is payable in monthly installments of $189 thousand until the end of April 2011.

18. borrowings

The movement of borrowings are presented below:

There is no difference between the carrying amount and fair value of borrowings.

OJSC Center Finance - Interest-free loan from OJSC Center Finance was obtained in 2008 by Exillon TP and is repayable on demand.

Short term loan from Majority Shareholder - On 11 November 2009, the Company received a short-term loan of $500 thousand from the Majority Shareholder. The loan was interest free and was repaid on 13 January 2010.

Tredall Ltd. - On 8 December 2009 the Company entered into a loan agreement with a related party, Tredall Ltd, for $40 thousand with 0.35% per annum interest rate, which was repaid on 2 February 2010. Also, the Group received financial support of $400 thousand with 0.35% per annum interest rate, which was repaid during 2009. On 1 December 2009 the Group entered into a loan agreement, for $100 thousand with 0.35% per annum interest rate, which was repaid on 2 February 2010.

Caspian Minerals LLP - Interest free loan from Caspian Minerals LLP was obtained in August 2009 by Regional Resources LLC and was repaid on 8 February 2010.

19. Share capital

The amount of share capital available for issue at the date of this consolidated financial information and the issued share capital of the Company are as follows:

The total number of allotted ordinary shares is 138,072,911 with a par value of $0.0000125 each.

Issuance of new shares - on 24 June 2010, the Company issued 12,552,082 of new shares with a par value of $0.0000125 each at £1.70 for total proceeds of £21,339 thousand or $32,190 thousand. Costs related to the issuance of new shares are taken against share premium amounted to $1,939 thousand.

20. COMMITMENTS AND CONTINGENCIES

Capital commitments - The Group has capital commitments outstanding against major contracts.

21. TRANSACTIONS WITH RELATED PARTIES

For the purposes of the financial statements, parties are considered to be related if one party has the ability to control the other party, is under common control, or can exercise significant influence over the other party in making financial and operational decisions. In considering each possible related party relationship, attention is directed to the substance of the relationship, not merely the legal form. The nature of the related party relationships for those related parties with whom the Group entered into significant transactions or had significant balances outstanding are detailed below or elsewhere in this report. The balances and transactions are predominantly with entities under common control or joint ventures.

The Group's outstanding balances with related parties were as follows:

Transactions with related parties during the period were as follows:

Compensation of key management personnel - Key management personnel consist of independent non-executive directors, executive directors, directors and presidents of operational subsidiaries. Compensation of key management personnel is set by senior executives of the Group. Compensation of key management includes salary and other short-term benefits. Total compensation to key management personnel included in administrative expenses in the consolidated statement of comprehensive income was $1,244 thousand for the 6 months ended 30 June 2010 (2009: $1,103 thousand).

22. controlled entities and joint ventures

A list of the principal subsidiaries and joint ventures for the period is set out below:

* Entities where the Group holds less than 50% interest are consolidated by virtue of the Group having the ability to exercise effective control.