RNS Number:6321X
Alkane Energy PLC
15 April 2004

15 April 2004



                          Alkane Energy plc ("Alkane")
        Announces Acquisition of Farmatic Biotech Energy UK Ltd ("FBE")


Alkane is pleased to announce that it has acquired an 83% interest in FBE
through an investment of #150,000 of new shares in FBE.


FBE was the UK subsidiary of Farmatic Biotech Energy ag ("Farmatic ag"), a
German company involved in supplying, owning and operating Anaerobic Digestion
(AD) plants. AD is a process whereby organic matter (agricultural and food
waste) is broken down by bacteria to produce biogas (methane), which can be used
to produce electricity and heat, and also a biofertiliser which can be applied
safely to agricultural land to replace  inorganic fertiliser.


The electricity generated from biogas is included in the UK's Renewables
Obligation and qualifies for Renewable Obligation Certificates (ROCs).  These
are currently selling at about #45/MWh in addition to the wholesale price of
about #22/MWh.  As well as income from electricity and heat sales, biogas plants
obtain income from taking and recycling food and agricultural wastes, which can
add as much income as that from energy sales.


FBE has been active in the UK for three years and Farmatic ag built the UK's
first large scale centralised AD plant at Holsworthy in Devon.   FBE is
currently developing another plant at Fivemiletown, Northern Ireland, in
conjunction with Biogas (Ireland) Ltd ("BI").  The company, established
specifically for this project, has been awarded a Government grant of #3.1
million towards the total #6.5 million cost.  Alkane, through FBE, expects to
invest up to #700,000 into BI giving it a majority interest in the company.  The
Fivemiletown plant is expected to become operational in 2006 and in addition to
deriving revenue from taking and recycling food wastes, it will also have an
electricity generation capacity of 1.9MW.   FBE is also progressing with a
biogas plant in north Wales, which it hopes to open in 2006.


FBE's former German parent company, Farmatic ag, ceased all its operations in
March 2004 having become financially overstretched due to a rapid growth rate
and too many early stage projects.  The remaining 17% of FBE is owned by its
Managing Director, Jorgen Fink.  FBE will now source the equipment for its
projects from other companies with similar manufacturing and technical
capabilities.


Alkane has also provided a loan of #100,000 to FBE which, with the investment,
will be used for working capital and to fund FBE's planned investment in the
first phase of the Fivemiletown project.


This investment, the planned investment in BI and in due course other biogas
projects follows from Alkane's strategy, announced in March 2003, of
diversifying from its original business of coal mine methane in the UK.  In
September 2003 Alkane acquired a controlling interest in Pro2 Anlagentechnik
GmbH ("Pro2"), a German green energy company specialising in the capture and use
of methane.  Pro2 is already active in the fast growing biogas sector, and will
provide the generating engines for Alkane's biogas projects.


FBE has been renamed Alkane Biogas Ltd.


Commenting on the acquisition, Dr. Cameron Davies, Executive Chairman of Alkane
Energy plc said:


"Through our acquisition of Alkane Biogas Ltd we are delighted to be entering
into the pioneering UK biogas market.  The industry, whilst in infancy in the
UK, is already established as a high growth sector elsewhere in the EU.  This
sector benefits from government support and favourable legislation both here and
in Europe. This move reaffirms our diversification strategy which includes the
recent incorporation of Pro2 into the Alkane group.  Pro2 will be providing the
generating equipment for the Fivemiletown and all Alkane's future biogas
projects."


For further information:


Alkane Energy plc
David Cross, Chief Executive                          01623 827927
Cameron Davies, Executive Chairman

Buchanan Communications
Sophie Morton                                         01943 883990



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            The company news service from the London Stock Exchange
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