Acquisition and Admission to trading on AIM

Libertas CapitalNominated Adviser & Broker

KP RENEWABLES PLCto be renamed

ISLAND GAS RESOURCES PLC

PROJECT EARTH – LANDKOM INTERNATIONAL PATHFINDER PROOFDRAFT 12-OCTOBER-2007TOTAL SIZE: 512 x 383mmDOCUMENT SIZE: 436 x 303 mm10mm spine, 3mm bleed

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt about thecontents of this document, or the action you should take, you are recommended to seek your own ¢nancial advice immediately from yourstockbroker, solicitor, accountant or other independent ¢nancial adviser who is authorised for the purposes of the Financial Services andMarkets Act 2000 (as amended) (the ‘‘FSMA’’) and who specialises in advising on the acquisition of shares and other securities in theUnited Kingdom.This document, which comprises an admission document required by the AIM Rules for Companies, has been prepared in connectionwith the proposed application for admission of the Enlarged Share Capital to trading on AIM, a market of London Stock Exchange plc.This document is an admission document drawn up in accordance with the AIM Rules and does not constitute a prospectus for thepurposes of section 85(1) of the FSMA.The Directors, whose names appear on page 3 of this document, accept responsibility for the information contained in this documentincluding collective and individual responsibility for the compliance with the AIMRules for Companies. To the best of the knowledge ofthe Directors (who have taken all reasonable care to ensure that such is the case), the information contained in this document is inaccordance with the facts and contains no omission likely to a¡ect its import.Application will be made for the Enlarged Share Capital to be admitted to trading on AIM. AIM is a market designed primarily foremerging or smaller companies to which a higher investment risk tends to be attached than to larger or more established companies.AIM securities are not admitted to the o⁄cial list of the Financial Services Authority (the ‘‘O⁄cial List’’). A prospective investor shouldbe aware of the risks of investing in such companies and should make the decision to invest only after careful consideration and, ifappropriate, consultation with an independent ¢nancial adviser. Each AIM company is required pursuant to the AIM Rules forcompanies to have a nominated adviser. The nominated adviser is required to make a declaration to the London Stock Exchange onadmission in the form set out in Schedule Two to the AIM Rulers for Nominated Advisers. The London Stock Exchange has not itselfexamined or approved the contents of this document. The Enlarged Share Capital is not traded on any other recognised investmentexchange and save for the application for admission to AIM, no such applications have been made or will be made. It is expected thatadmission to AIM will become e¡ective and that dealings in the Enlarged Share Capital will commence on AIM on or around31 December 2007.The whole text of this document should be read and in particular YOUR ATTENTION IS DRAWN TO THE RISK FACTORS SETOUT IN PART II OF THISDOCUMENT.

KPRenewables plc(Incorporated in England andWales with Registered No.04981279)

Proposed acquisition of Island Gas Limited by means of ascheme of arrangement under Section 425 of the Companies Act 1985

Admission to trading on AIMWaiver under Rule 9 of The Takeover Code

Change of Name to Island Gas Resources Plc (‘‘IGas’’)Share Consolidation

Notice of Extraordinary GeneralMeeting

Libertas Capital Corporate Finance LimitedNominated Adviser and Broker

Libertas Capital Corporate Finance Limited (‘‘Libertas Capital’’), which is regulated and authorised in the United Kingdom by theFinancial Services Authority, is acting exclusively for the Company as nominated adviser for the purposes of the AIM Rules forNominated Advisers and the AIM Rules for Companies. Libertas Capital is not acting for any other person and will not be responsibleto any person for providing the protections a¡orded to its customers or for advising any other person on the contents of any part of thisdocument. Libertas Capital is not making any representation or warranty, express or implied, as to the contents of this document. Theresponsibilities of Libertas Capital, as the nominated adviser are owed solely to the London Stock Exchange and are not owed to theCompany or any Director or to any other person, in respect of any decision to acquire Ordinary Shares in reliance on any part of thisdocument or otherwise. Libertas Capital Securities Limited, which is regulated by the Financial Services Authority, is acting exclusivelyfor the Company as broker for the purposes of the AIM Rules for companies and is not acting for any other person and will not beresponsible to any person for providing the protections a¡orded to its customers or for advising any other person on the contents of anyparts of this document. The responsibilities of Libertas Capital Securities Limited, as the Company’s broker are owed solely to theLondon Stock Exchange and not to the Company or to any Director or to any other person, in respect of any decision to acquireOrdinary Shares in reliance on any part of this document or otherwise. Libertas Capital Securities Limited is not making anyrepresentation or warranty, express or implied, as to the contents of this document.This document does not constitute an o¡er to sell, or solicitation of an o¡er to buy, shares in any jurisdiction in which such an o¡er orsolicitation is unlawful and, in particular, is not for distribution into the United States, or issue into Australia, Canada, Japan, SouthAfrica or the Republic of Ireland. The New Ordinary Shares have not been, nor will be, registered in the United States under the UnitedStates Securities Act of 1933, as amended, or under the securities laws of Australia, Canada, Japan, South Africa or the Republic ofIreland. Accordingly, they may not be o¡ered or sold, directly or indirectly, within the United States, Australia, Canada, Japan, SouthAfrica or the Republic of Ireland or to, or for the account or bene¢t of, any person, in or any national, citizen or resident of, the UnitedStates, Canada, Japan, South Africa or the Republic of Ireland. The distribution of this document outside the United Kingdom may berestricted by law and therefore persons outside the United Kingdom into whose possession this document comes should informthemselves about and observe any restrictions as to the Ordinary Shares and the distribution of this document.There is set out at the end of this document Notice of an Extraordinary General Meeting of the Company to be held at the o⁄ces ofMorrison & Foerster MNP, CityPoint, One Ropemaker Street, London EC2Y 9AW at 12.00 midday on 27 December 2007. A Form ofProxy for use at the Extraordinary General Meeting is enclosed. To be valid, Forms of Proxy should be completed and signed inaccordance with the instructions printed thereon and returned as soon as possible and, in any event, so as to be received by theCompany’s registrars, Computershare Investor Services PLC, by not later than 12.00 midday on 21 December 2007. Pursuant toregulation 41 of the Uncerti¢ed Securities Regulations 2001, the time by which a person must be entered in the register of members inorder to have the right to attend and vote at the meeting is 48 hours prior to the time vote at the meeting. Completion and return of aForm or Proxy will not preclude a member from attending and voting at the meeting should they so wish.

TABLE OF CONTENTS

Page

Directors, Secretary and Advisers 3

De¢nitions 4

Admission Statistics 8

Expected Timetable of Principal Events 8

Part I Letter from the Chairman 10

Part II Risk Factors 33

Part III Competent Person’s Report 39

Part IV Financial Information on IGL 81

Part V Financial Information on the Company 101

Part VI Pro Forma Financial Information on the Enlarged Group 123

Part VII Additional Information 128

Part VIII Notice of Extraordinary General Meeting 156

2

DIRECTORS, SECRETARY AND ADVISERS

Existing Directors John Bryant (Non-Executive Chairman)*Peter Redmond (Non-Executive Director)Richard James Armstrong (Non-Executive Director)

* Mr Bryant will stand down as Chairman on Admission but willremain on the Board as Non-Executive Director

Proposed Directors Francis Robert Gugen (Executive Chairman)Andrew Philip Austin (Chief Executive O⁄cer)Brent Cheshire (Technical Director)

Registered O⁄ce 7th FloorAldermary House10-15 Queen StreetLondon EC4N 1TX

Company Secretary Aldermary Secretaries Limited

Nominated AdviserLibertas Capital Corporate Finance Limited16 Berkeley StreetLondonWIJ 8DZ

BrokerLibertas Capital Securities Limited16 Berkeley StreetLondonWIJ 8DZ

Solicitors to the CompanyMorrison & Foerster MNP7th FloorCityPointOne Ropemaker StreetLondon EC2Y 9AW

Solicitors to IGLHunton &Williams30 StMary AxeLondon EC3A 8EP

Auditors to the CompanyMoore Stephens LLPSt Paul’s HouseWarwick LaneLondon EC4M 7BP

Reporting AccountantsMazars LLP3 Sheldon SquareLondonW2 6PS

Solicitors to the Nominated AdviserMemery Crystal LLP44 Southampton BuildingsLondonWC2A 1AP

Auditors to IGLErnst & Young1More London PlaceLondon SE1 2AF

Public RelationsGavin Anderson & Company85 StrandLondonWC2R 0DW

Competent PersonEquipoise Solutions Ltd3ARathbone Square28 Tan¢eld RoadCroydon CRO 1BT

RegistrarsComputershare Investor Services PLCPO Box 1075The PavillionsBridgewater RoadBristol BS99 3FA

3

DEFINITIONS

The following de¢nitions apply throughout this document, unless the context requires otherwise:

‘‘Acquisition’’ the proposed acquisition by the Company of the entire issued and to beissued share capital of IGL pursuant to the Scheme

‘‘Acts’’ or ‘‘Companies Acts’’ the Companies Act 1985, as amended, and the Companies Act 2006

‘‘Admission’’ the admission of the New Ordinary Shares to trading on AIMbecoming e¡ective in accordance with the AIMRules for Companies

‘‘AIM’’ a market of the London Stock Exchange

‘‘AIMRules for Companies’’ the rules for AIM companies issued by the London Stock Exchange (asamended from time to time)

‘‘AIMRules for NominatedAdvisers’’

the rules for nominated advisers issued by the London Stock Exchange(as amended from to time)

‘‘Articles’’ the articles of association of the Company

‘‘bcf’’ billions of standard cubic feet of gas

‘‘Berr’’ The Department for Business, Enterprise and Regulatory Reform

‘‘Board’’ the board of directors of the Company from time to time, including aduly constituted committee of such directors

‘‘CBM’’ Coal BedMethane

‘‘Combined Code’’ the ‘‘Combined Code on Corporate Governance’’ published in July2003 by the Financial Reporting Council as amended in June 2006

‘‘Company’’ or ‘‘KPRenewables’’

KP Renewables plc, a company incorporated in England and Waleswith company number 4981279

‘‘Concert Party’’ the IGL Shareholders

‘‘Conditions’’ the conditions to the Acquisition being (i) the Scheme being approvedby the Court, (ii) the EGM Resolutions being passed at theExtraordinary General Meeting, and (iii) Admission

‘‘Consideration Shares’’ 55,555,365 New Ordinary Shares to be issued fully paid to the SchemeShareholders pursuant to the Scheme

‘‘Court’’ the High Court of Justice in England andWales

‘‘Court Hearing’’ the hearing of the Court for the purposes of considering andsanctioning the Scheme

‘‘Court Meeting’’ the meeting of the Scheme Shareholders to be convened pursuant to anorder of the Court pursuant to Section 425 of the Act for the purposesof considering and, if thought ¢t, approving the Scheme (with orwithout amendment), and any adjournment thereof

‘‘Court Order’’ the order of the Court sanctioning the Scheme under Section 425 of theAct

‘‘CREST’’ the computerised settlement system (as de¢ned in the CRESTRegulations) in the UK operated by Euroclear which facilitates thetransfer of title to shares in uncerti¢cated form (as de¢ned in theCREST Regulations)

‘‘CREST Regulations’’ the Uncerti¢cated Securities Regulations 2001 (SI 2001/3755)

‘‘CVA’’ the company voluntary agreement pursuant to Part I of the InsolvencyAct 1986 of the Company approved on 10 April 2007

‘‘Deferred Shares’’ the deferred shares of 0.95p each in the capital of the Company whichhave no economic value

4

‘‘Directors’’ the Existing Directors and the Proposed Directors of the Company,whose names are set out on page 3 of this document

‘‘Disclosure Period’’ the period commencing on 27 November 2006 and ending on27 November 2007 (the latest practicable date prior to the date of thisdocument)

‘‘E¡ective’’ the Scheme having become e¡ective pursuant to its terms

‘‘E¡ective Date’’ the date on which the Scheme becomes E¡ective which is expected to be17 December 2007

‘‘EGMResolutions’’ the resolutions set out in the Notice of Extraordinary General Meetingattached to this document

‘‘Enlarged Group’’ the Company and its subsidiary undertakings as at the date ofAdmission which shall include IGL

‘‘Enlarged Share Capital’’ the New Ordinary Shares in issue immediately following Admission

‘‘Euroclear’’ Euroclear UK& Ireland Limited

‘‘Existing Directors’’ John Bryant, Peter Redmond and Richard Armstrong

‘‘Existing Ordinary Shares’’ the 84,661,610 Ordinary Shares in issue at the date of this document

‘‘Existing Projects’’ certain opportunities in the wind generation sector which were beingpursued by the Company prior to the date of the CVA

‘‘Extraordinary GeneralMeeting’’or ‘‘EGM’’

the extraordinary general meeting of the Company to be held at 12.00midday on 27 December 2007, notice of which is attached to thisdocument

‘‘Form of Proxy’’ the form of proxy which is enclosed with this document for use byholders of Existing Ordinary Shares in connection with theExtraordinary General Meeting

‘‘FSA’’ the Financial Services Authority

‘‘FSMA’’ the Financial Services andMarkets Act 2000

‘‘GIIP’’ gas initially in place

‘‘IGL’’ Island Gas Limited, a company incorporated in England and Waleswith company number 4962079

‘‘IGL Extraordinary GeneralMeeting’’

the extraordinary general meeting of the IGL Shareholders convened inconnection with the Acquisition (and any adjournment thereof) to beheld directly after the Court Meeting

‘‘IGL Shareholders’’ the holders of IGL Shares

‘‘IGL Shares’’ the outstanding A ordinary shares, B ordinary shares, C ordinaryshares and D ordinary shares, which will be cancelled upon the Schemebecoming e¡ective, and the redeemable preference shares in the capitalof IGL which will be repurchased by IGL upon the Scheme becominge¡ective

‘‘Implementation Agreement’’ the implementation agreement dated 27 November 2007 between theCompany, IGL and others in relation to the Scheme and theAcquisition

‘‘LDZ’’ local distribution zone

‘‘Libertas Capital’’ Libertas Capital Corporate Finance Limited and/or Libertas CapitalSecurities Limited, as the context requires

‘‘Loan Notes’’ the »900,000 of outstanding ¢xed rate convertible unsecured loan notesof the Company

‘‘London Stock Exchange’’ London Stock Exchange plc

5

‘‘New Ordinary Shares’’ ordinary shares of 50p each in the capital of the Company following theconsolidation of the Existing Ordinary Shares pursuant to Resolutions,the Consideration Shares and (for the avoidance of doubt) the NewOrdinary Shares arising from the conversion of the Loan Notes

‘‘Ordinary Shares’’ ordinary shares of 1 pence each in the capital of the Company

‘‘New Articles’’ the new articles of association of the Company proposed to be adoptedby special resolution at the EGM

‘‘Nominated Adviser and BrokerAgreement’’

the agreement between Libertas Capital and the Company, conditionalupon Admission, pursuant to which Libertas Capital agrees to act asnominated adviser and broker to the Company, details of which are setout in paragraph 11.2 of Part VII

‘‘Proposals’’ the Acquisition

‘‘Proposed Directors’’ the proposed executive directors of the Company being togetherFrancis Gugen, Andrew Austin and Brent Cheshire

‘‘Prospectus Rules’’ the prospectus rules produced and implemented by the FinancialServices Authority

‘‘Purchase Price’’ 90p per Consideration Share being the implied price per New OrdinaryShare at which the Consideration Shares will be issued and whichresults from the agreement made between the Company and IGL asregards their respective values

‘‘Reorganisation Record Time’’ the time and date on which the Court Order is delivered to theRegistrar of Companies for registration

‘‘Resolutions’’ the Resolutions to be proposed at the EGM

‘‘Rule 9Waiver’’ the waiver agreed by the Takeover Panel and to be approved byShareholders of the obligations that would otherwise fall upon themembers of the Concert Party and Francis Gugen individuallypursuant to Rule 9 of the Takeover Code as a result of the issue to themof Consideration Shares pursuant to Scheme

‘‘Scheme’’ the scheme of arrangement for the implementation of the Acquisitionunder Section 425 of the Act between IGL and its shareholders, with orsubject to any modi¢cation thereof or any addition thereto or conditionapproved or imposed by the Court and agreed by IGL and theCompany

‘‘Scheme Document’’ the circular addressed to shareholders of IGL proposing the Schemewhich was posted by IGL on 13 November 2007, as amended on22 November 2007

‘‘Scheme Share’’ IGL Shares:

(i) in issue at the date of the Scheme Document;

(ii) issued after the date of the Scheme Document but before theVoting Record Time; and

(iii) issued at or after the Voting Record Time and before theReorganisation Record Time on terms that the original or anysubsequent holders shall be, or shall have agreed in writing bysuch time to be, bound by the Scheme

‘‘Scheme Shareholder’’ a holder of a Scheme Share

‘‘Shareholders’’ the holders of Ordinary Shares of the Company

‘‘Sterling’’ or ‘‘»’’ the legal currency of the UK

‘‘Suspension Price’’ 1.6p per Existing Ordinary Share (equivalent to 80p per New OrdinaryShare) being the mid-market price immediately prior to the suspension

6

of trading of the Existing Ordinary Shares on Monday 19 November2007

‘‘Takeover Code’’ the City Code on Takeovers andMergers

‘‘Takeover Panel’’ the Panel on Takeovers andMergers

‘‘tcf’’ trillions of standard cubic feet of gas

‘‘UK’’ the United Kingdom of Great Britain and Northern Ireland

‘‘UKCS’’ UKContinental Shelf

‘‘US’’ or ‘‘United States’’ the United States of America, its territories and possessions, any stateof the United States of America and the District of Columbia

‘‘Voting Record Time’’ the time ¢xed by the Court and IGL for determining the entitlement tovote, respectively, at the Court Meeting and the IGL ExtraordinaryGeneral Meeting as set out in the notices thereof

‘‘Warrants’’ a total of 440,000 warrants proposed to be issued to John Bryant,Richard Armstrong, David Lindley and Peter Redmond, to subscribefor New Ordinary Shares, further details of which appear inparagraph 4 of Part VII

7

ADMISSION STATISTICS

Number of Existing Ordinary Shares in issue prior to the Acquisition (pre-consolidation)and conversion of Loan Notes 84,661,610

Number of Loan Notes outstanding 900,000

Number of New Ordinary Shares in issue following the Acquisition and conversionof the Loan Notes 59,107,182

Consideration Shares as a percentage of the Enlarged Share Capital 94 per cent.

Market capitalisation (approximate) of the Company followingcompletion of the Acquisition (at the Suspension Price) »47.3 million

Market capitalisation (approximate) of the Company followingcompletion of the Acquisition (at the Purchase Price) »53.2 million

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

Latest time and date for receipt of Forms of Proxy for the EGM 12.00 midday on 21 December 2007

CreditorMeeting 11.45 a.m. on 27 December 2007

Extraordinary General Meeting 12.00 midday on 27 December 2007

E¡ective Date of the Scheme 28 December 2007

Issue of Consideration Shares and New OrdinaryShares pursuant to conversion of the Loan Notes 28 December 2007

Admission e¡ective and dealings recommence in the ExistingOrdinary Shares on AIM and dealings commence in the ConsiderationShares and New Ordinary Shares pursuant to conversionof the Loan Notes on AIM 31 December 2007

CREST accounts credited by 31 December 2007

Despatch of de¢nitive certi¢cates by 31 December 2007

All future dates referred to in this document are subject to change at the discretion of the Company, LibertasCapital Corporate Finance Limited and Libertas Capital Securities Limited.

8

Key Information on Island Gas LimitedIGL is a coal bed methane (‘‘CBM’’) company seeking to produce and market methane gas for industrial anddomestic use from virgin coal seams within its onshore UK acreage. This requires acreage to be explored,appraised and developed and in connection with which Island also provides technical and other relatedservices.

IGL has ownership interests ranging from 20 per cent. to 50 per cent. in eight Petroleum and ExplorationDevelopment Licences (‘‘PEDLs’’) and 50 per cent. ownership of three o¡shore blocks held under oneseaward petroleum production licence (‘‘SPPL’’) in the UK (the ‘‘Licences’’). These Licences cover a grossarea of approximately 1,000 sq km and the risk weighted mid case estimate of IGL’s share of GIIP is 893 bcf,with low and high estimates of 395 bcf and 3,436 bcf respectively. IGL’s joint venture partner that holds theresidual 50 per cent. to 80 per cent. ownership interests in certain of the Licences is Nexen Exploration U.K.Limited, a subsidiary of Nexen Inc, a Toronto and New York Stock Exchange listed global energy companywith a market capitalisation of approximately C$16bn (‘‘Nexen’’).

When IGL became active in CBM, several factors began to change the potential for the development ofCBM in the UK.

1. Developments in Drilling Technology: The application of lateral drilling technology in coals, initiallypioneered in the US, o¡ers the opportunity for CBM developments to:

. access more coal surface from the same mother bore well, thereby providing the potential toaccess more coal at lower cost and to improve production and economics; and

. with a much lower geographical footprint, address one of the hurdles to development in the UK.A higher population density and the intensity of land use make space concerns a bigger issue thanin the US; which can manifest themselves in planning constraints. Lateral wells of which manyhave been drilled in the US, o¡er the potential to reduce the number of surface locations by afactor of 10, when compared with vertical wells draining the same area.

2. Security of Supply concerns: As discussed elsewhere in this admission the political outlook on oil, gasand coal projects in the UK has recently changed to view such projects in a more favourable light as aresult of growing awareness of the UK’s current reliance on energy from these sources in addition tothe country’s increasing dependence in imports of such energy.

3. Entrance of E&P Multi-national corporations to UK CBM: During this period, several largemultinational E&P companies have formed partnerships with existing UKCBM players.

Under certain agreements which IGL has in place with Nexen (the ‘‘Nexen Carry Agreements’’), Nexen willprovide 100 per cent. of the funding required for work programs up to a gross spend of »26.5 million. Inaddition, it is expected to pay IGL a minimum of »500,000 per year in each of 2008 and 2009 for IGL’sconsultancy services in relation to the joint operations. IGL earns further revenue from Nexen by providingpersonnel and other services.

IGL’s immediate objectives are to:

(1) commence initial gas sales from CBM production from at least one property by the end of 2008;

(2) secure routes to market with a focus on electricity generation and access to the gas network;

(3) continue gathering data and production experience to allow a proportion of GIIP to be classi¢ed as‘‘recoverable resource’’;

(4) ful¢l well obligations on licences as necessary to secure ownership into upcoming second terms; and

(5) apply for acreage, together with Nexen, in the recently announced 13th licensing round.

9

PART I

LETTER FROM THE CHAIRMAN

KPRenewables plc(Incorporated in England andWales with Registered No.04981279)

Directors: Registered O⁄ce:

John Bryant (Non-Executive Chairman)*Peter Redmond (Non-Executive Director)Richard Armstrong (Non-Executive Director)

7th Floor, Aldermary House10-15 Queen StreetLondon EC4N 1TX

Proposed Directors:

Francis Gugen (Executive Chairman)Andrew Austin (Chief Executive O⁄cer)Brent Cheshire (Technical Director)

* John Bryant will stand down as chairman on Admission and will remain on the Board as a Non-Executive Director

27 November 2007

To the holders of Existing Ordinary Shares and for information only to holders of options and warrants

Dear Shareholder,

Proposed acquisition of Island Gas Limited by means of a scheme of arrangement underSection 425 of the Companies Act 1985

Admission to trading on AIMWaiver under Rule 9 of The Takeovers CodeChange of name to Island Gas Resources Plc

Share ConsolidationNotice of Extraordinary General Meeting

1. IntroductionOn 19 November 2007 the Company’s Existing Ordinary Shares were suspended from trading as a result ofpress speculation concerning a potential transaction that would constitute a reverse takeover for thepurposes of the AIM Rules. Today the Company announced that it had reached agreement on the terms of arecommended proposal whereby the Company will acquire the entire issued and to be issued share capital ofIGL. Pursuant to the terms of the Acquisition, IGL Shareholders will receive Consideration Shares with anaggregate value of approximately »50 million at the Purchase Price.

The Acquisition is to be implemented by means of a scheme of arrangement under Section 425 of the Act.Pursuant to the AIMRules for Companies, the Acquisition will constitute a reverse takeover. It is, therefore,subject to Shareholder approval which will be sought at an Extraordinary General Meeting to be held at12.00 midday on 27 December 2007 at the o⁄ces of Morrison & Foerster MNP, 7th Floor, CityPoint, OneRopemaker Street, London EC2Y 9AW. The Board unanimously considers that the Resolutions are in thebest interests of the Company and Shareholders as a whole and recommends that Shareholders vote infavour of the Resolutions.

The Acquisition is also a ‘‘qualifying event’’ for the purposes of triggering the mandatory conversion of theCompany’s outstanding Loan Notes which will convert into a total of 81,818,150 Existing Ordinary Shares(equivalent to 1,636,363 New Ordinary Shares) subject to the completion of the Acquisition and the passingof the Resolutions.

The proposed Acquisition constitutes a material change to the Company’s existing operations and will alsoresult in the disposal of the Existing Projects. For this reason the Company is also convening a meeting of theeligible creditors who are party to the CVA to vary and discharge the CVA arrangements.

This document, which comprises an admission document, sets out the background to and reasons for theAcquisition and explains why the Existing Directors consider that the Acquisition is in the best interests ofthe Company and recommend that Shareholders vote in favour of the Resolutions.

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2. Background information on KP RenewablesThe Company was incorporated on 1 December 2003 and was admitted to AIM on 29 July 2005. Its statedstrategy, at that time, was to establish a leading position in the United Kingdom renewable energy sector bydeveloping, building or acquiring a portfolio of renewable energy projects. During the period to May 2006,the Company made good progress in identifying suitable opportunities for development and investment, andentered into a number of signi¢cant development agreements. However, subsequently, the developmentprogramme was restricted as a result of a shortage of funds; the shortage being attributed in part to theillness and subsequent untimely death of the Company’s founder and Chief Executive O⁄cer, Dr JamesRichardWatkins, who had led the Company’s fund raising e¡orts.

The then directors of the Company had been hopeful that they would be able to generate value from itsexisting portfolio of projects but, in view of the ¢nancial position of the Company, there were insu⁄cientresources to devote to those projects to bring them to fruition. The ¢nancial position of the Company wassuch that, on 21 September 2006, the Board requested that the Ordinary Shares be suspended from tradingon AIM pending a decision on re¢nancing.

Following the suspension, the Board continued to seek to realise value for creditors of the Company andShareholders. The then directors continued to seek new equity capital throughout the Autumn of 2006 butwere unsuccessful in doing so. These attempts culminated in the approval of certain proposals by creditorsand by Shareholders at an extraordinary general meeting of the Company held on 10 April 2007.

The proposals are summarised below:

(1) the Company entered into a Company Voluntary Arrangement pursuant to the provisions of theInsolvency Act 1986, whereby creditors agreed to a material compromise in the sums owed to them;

(2) the Company reorganised and increased its share capital to enable it to raise additional funds; and

(3) the Company raised »750,000 of new equity capital to enable it to meet its remaining obligations tocreditors and to progress its original business plan, albeit on a much reduced scale.

Following the implementation of the proposals, Peter Redmond and Richard Armstrong joined the Board,which has since begun to resuscitate the Company’s existing business and has reviewed new projects in wind,biomass and other related areas. On 2 November 2007 the Company announced that it had raised »900,000by the issue of Loan Notes in order to progress its stated strategy. The Loan Notes are convertible on amandatory basis in the event of the Company completing a transaction that would be classi¢ed as a reversetakeover for the purposes of the AIM Rules for Companies. The Loan Notes convert into Existing OrdinaryShares at a price of 1.1p per share (equivalent to 55p per New Ordinary Share).

In the Company’s circular to shareholders dated 16 March 2007, it stated that the Board was givingconsideration to a signi¢cant further fundraising to support investment in a sizable project or to theacquisition of another business and, in the latter event, this would almost certainly be considered a reversetakeover under the AIM Rules. The Board views IGL as an attractive acquisition opportunity due to thescale, the quality of its assets and its management.

With regard to the Existing Projects, the Board recognises the need to focus and intends, subject to theapproval of the Acquisition at general meeting, to dispose of the Existing Projects to allow the ProposedDirectors (see paragraph 10 below) to concentrate their e¡orts on the business of IGL. The Company hasgenerated some income from the Existing Projects and creditors are entitled to 60 per cent. of the netproceeds until such time as they have been discharged in full. Accordingly, the Board has resolved, subject toShareholder and creditor approval, to transfer the Existing Projects to a new wholly owned subsidiary, KPWind and Biomass Limited. KP Wind and Biomass Limited will then be sold to Blenheim Energy Limited.The latter will e¡ectively take over the Existing Projects and will also take over, and manage the delivery ofvalue, where possible, to creditors who elected through the CVA to continue to participate in any revenuesderived from the Existing Projects. KP Wind and Biomass Limited and Blenheim Energy Limited willindemnify the Company against any further liabilities under the CVA.

A meeting of creditors who are party to the CVA has been convened for 11.45 a.m. on 27 December 2007 toapprove modi¢cations to the CVA as follows:

(1) to approve the disposal of the Existing Projects to KP Wind and Biomass Limited and to approve thedisposal of KPWind and Biomass Limited to Blenheim Energy Limited;

(2) to approve the Acquisition as a material changes to the Company’s business; and

(3) to bring the CVA to an end ahead of its originally proposed termination date.

11

The supervisor of the CVA has examined the proposed amendments to the CVA and has recommended thatcreditors vote in favour of them on the grounds that they are in the best interests of creditors. Shareholderswill ¢nd a copy of the detailed proposed amendments to CVA enclosed with this document and which shouldbe read in conjunction with it.

Subject to the requisite approvals from Shareholders and creditors, the CVA will come to an end, theCompany will cease to be bound by any restrictions on the operation of its business contained in the originalCVA and all liability to creditors under the CVA will pass to KP Wind and Biomass Limited and BlenheimEnergy Limited.

3. Background information on IGL3.1 IntroductionIGL is a coal bed methane (‘‘CBM’’) company seeking to produce and market methane gas for industrial anddomestic use from virgin coal seams within its onshore UK acreage. This requires acreage to be explored,appraised and developed and in connection with which IGL also provides technical and other relatedservices. As at the date of this Document the Proposed Directors collectively own over 90 per cent. of IGL.

IGL has ownership interests ranging from 20 per cent. to 50 per cent. in eight Petroleum and ExplorationDevelopment Licences (‘‘PEDLs’’), 100 per cent. ownership of two methane drainage licences (‘‘MDLs’’)and 50 per cent. ownership of three o¡shore blocks held under one seaward petroleum production licence(‘‘SPPL’’) in the UK (the ‘‘Licences’’). These Licences cover a gross area of approximately 1,000 sq km and,according to the Competent Person, the risk weighted mid case estimate of IGL’s share of GIIP is 893 bcf,with low and high estimates of 395 bcf and 3,436 bcf respectively. IGL’s joint venture partner NexenExploration U.K. Limited holds the residual 50 per cent. to 80 per cent. ownership interests in certain of theLicences, Nexen Exploration U.K. Limited is a subsidiary of Nexen Inc, a Toronto and New York StockExchange listed global energy company (‘‘Nexen’’) with a market capitalisation approximately C$16bn.

Under certain agreements which IGL has in place with Nexen (the ‘‘Nexen Carry Agreements’’), Nexen willprovide 100 per cent. of the funding required for work programs aggregating to up to »26.5 million. Inaddition, it is expected to pay IGL a minimum of »500,000 per year for each of 2008 and 2009 for IGL’sconsultancy services in relation to the joint operations. IGL earns further revenue from Nexen by providingpersonnel and other services.

Planning permission has so far been granted, and access to land so far has been obtained, for six wells:

. Doe Green, within PEDL 145, planning permission for two wells (land lease secured);

. Fiddlers Ferry, within PEDL145, planning permission for two wells (land lease not in place);

. Mill Farm, within PEDL 92, planning permission for one well (land lease secured); and

. Mostyn Quay, within PEDL 107, planning permission for one well (land lease secured).

Wells have been drilled at Doe Green and Mill Farm. One well at Doe Green is currently on production test.Coring and logging has been carried out at both Doe Green andMill Farm.

IGL’s immediate objectives are to:

(1) commence initial gas sales from CBM production from at least one property by the end of 2008;

(2) secure routes to market with a focus on electricity generation and access to the gas network;

(3) continue gathering data and production experience to allow a proportion of GIIP to be classi¢ed as‘‘recoverable resource’’;

(4) ful¢l all well obligations on licences as necessary to secure ownership into up and coming second terms;and

(5) apply for acreage, together with Nexen, in the recently announced 13th licensing round.

Financial information on IGL is set out in Part IV of this document.

3.2 Introduction to CoalbedMethaneCBM is a natural gas found in seams of coal. However, whereas in a natural gas o¡shore reservoir, such assandstone, the gas is held in the void spaces within the rock, in onshore coal the gas is principally retained onthe surface of the coal within the micropore structure.

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CBM is an unconventional resource because coal is the source, reservoir, trap and seal. Gas is generatedfrom organic matter in swamps during the coali¢cation process that converts peat into coal. Gas is absorbedonto the internal surfaces of the coal in a layer one molecule thick. Hydrostatic pressure of the water trappedwithin the coal holds the gas in place. In a CBMwell, often large volumes of water are initially produced untilthe reservoir pressure is reduced su⁄ciently to allow the gas to desorb from the coal. Consequently, the gasrate increases through time until a peak rate is reached.

Coals are good reservoirs because they can store more gas, for any given volume of reservoir, than canconventional sandstone reservoirs, at relatively low pressures and shallow depths. Most coal basins havealready been mapped, and older wells that have penetrated the coals provide data on depth, thickness andcontinuity of the coal seams. Because of the shallow depths, CBM wells are relatively inexpensive to drill andcan provide very good economics. Modelling of CBM reservoirs suggests that productive lives may be aslong as 40 years.

CBM is produced by drilling into a coal seam, lowering the local pressure and collecting the gas that isreleased through naturally occurring fractures (cleats) or mechanically induced fracturing. The gasextraction process does not detrimentally a¡ect the physical properties of the coal or prejudice it beingworked at some later date by conventional mining methods. The drilling techniques applicable to CBMextraction (including horizontal in-seam drilling) are similar to those used in conventional gas extractionalthough the precise techniques applied vary depending upon the particular attributes of the CBM ¢eld.

Coal is a very complex mixture of organic and inorganic compounds and di¡ers from other sedimentaryreservoirs as the gas is absorbed within the matrix of the rock rather than compressed in pore spaces. Atypical one-foot thickness of coal six hundred feet deep is capable of containing as much gas as a typicalsandstone reservoir ¢ve thousand feet deep. Another unique characteristic of coalbed production is itsproduction behaviour. In most cases, initial production of gas is quite low while water production may behigh. As the water is withdrawn, and the bottom-hole pressure decreases in the reservoir near the well bore,gas production gradually increases. During the ¢rst few producing weeks, months or years the water-production rate will continue to decrease accompanied by an increase in the gas production rate, until apseudo-steady sate occurs for both phases.

The two necessary ingredients for commercial gas production from a coalbed are a su⁄cient quantity of gasin the reservoir, and adequate permeability within the coal to accommodate commercial gas deliverability.Coal is a dual-porosity reservoir- gas is retained in both the fractures and the matrix. Since coal is reluctantto give up any gas until the associated water is removed or the pressure is lowered below a certain criticallevel, the initial gas production rates are usually much lower than the peak rate which will occur weeks oryears later. This low gas production rate is usually associated with a high initial water production rate. As thewell is produced, the water rate gradually diminishes and the gas rate increases, until a pseudo-steady rate isachieved, after which the gas production rate eventually declines. The pattern is in contrast to a conventionalpetroleum or gas reservoir that will typically exhibit its maximum productivity initially and establishimmediate decline.

The CBM industry in the UK is in its infancy, but with the continuing decline in natural gas from the NorthSea, it is likely to become an increasingly attractive alternative potential source of gas. CBM has become asigni¢cant source of gas both in North America and Australia over a relatively short period of time duringwhich both have seen an almost exponential growth in CBM production. Through improvements in drillingand development techniques adopted by a number of world renowned companies, CBM is now a competitivesource of gas.

In the US, CBM accounted for 9.9 per cent. of the total gas production in 2005 and witnessed over 40 assetand corporate transactions since the beginning of 2000 valued at over US$5.7 billion. In 2007, approximately5 per cent. of Canadian gas production is expected to come from CBM. In Queensland and New SouthWalesin Australia, CBM accounted for 25 per cent. and 3 per cent. of the respective gas production in each area

CBMproductionCBM production potential is a product of several factors that vary from basin to basin ç fracturepermeability, coal development, gas migration, coal maturation, coal distribution, geological structure,CBM completion options, hydrostatic pressure and produced water management. In most areas, naturallydeveloped fracture networks are the most sought after areas for CBM development. Areas where geologicalstructures and localised faulting have occurred tend to induce natural fracturing, which increases theproduction pathways within the coal seam. This natural fracturing reduces the cost of bringing the producingwells on line.

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Most coals contain methane, but it cannot be economically produced without open fractures present toprovide the pathways for the desorbed gas to migrate to the well. As long as the pressure exerted by the watertable is greater than that of the gas in the coal, the methane remains trapped in the coal bed matrix. Coalcleats and fractures are usually saturated with water, and therefore the hydrostatic pressure in the coal seammust be lowered before the gas will migrate.

Lowering the hydrostatic pressure in the coal seam accelerates the desorption process. CBM wells initiallyproduce water primarily; gas production eventually increases, and as it does water production declines. Somewells do not produce any water and begin producing gas immediately, depending on the nature of thefracture system. Once the gas is released, it is usually free of any impurities; is of su⁄cient quality, and can beeasily prepared for pipeline delivery.

CBM wells are completed in several ways, depending upon the type of coal in the basin and £uid content.Each type of coal (sub-bituminous to bituminous) o¡ers production options that are di¡erent due to theinherent natural fracturing and competency of the coal seams.

Coals in the UK are potentially analogous to those formed in eastern areas of the US. Many of these easternUS coals do not require signi¢cant amounts of water to be removed to initiate methane production. Thesecoals are often exploited by way of horizontal drain-holes from a single bore-hole. Each individual well mayhave up to 3,500-feet of lateral extent within a single coal seam. Several laterals can be drilled from a singlewellbore to exploit several seams or to take advantage of several cleat (fracture) trends. Each leg would notnecessarily be horizontal but would closely follow the dip of the individual seam. Many of the coal seams areoften less than ¢ve-feet thick, requiring the drilling contractor to exercise great care in steering the drill bit.

See the diagram below:

Operators in Alabama, Arkansas, and Oklahoma have made use of horizontal laterals to enhance CBMproduction. The production of CBM from eastern US coals is similar to the western US coals except for theuse of horizontal well bores and the extensive use of fracturing to enhance production. With the coals beingof higher rank, the methane content per ton of coal is typically higher, but requires in many areas additionalenhancement to the natural fracture content to maximize production. Production rates of CBM depend uponlocal gas content of the coal, local permeability of the coals, hydrostatic pressure in the coal seam aquifer,completion techniques, and production techniques.

Comparison of CBM and conventional gas exploration and productionCoal bed methane can be seen as a non-conventional hydrocarbon resource. In conventional oil and gasreservoirs, hydrocarbons are generated from the thermal and pressure maturation of a suitable organicsource rock, including coals. These hydrocarbons are reservoired within the pore spaces of a suitably porousand permeable rock. As hydrocarbons are more buoyant than the surrounding formation water, some formof structural or stratigraphic trap is required to prevent the hydrocarbons from leaking to surface. As aresult, such traps generally form a fractional subset of the areal distribution of the prospective reservoirinterval.

Within coals, the associated methane is chemically bound within the strata themselves, via a process knownas adsorbtion. It is important to note that as a result, geological structures play no role in the accumulation

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of coal bed methane. Thus, CBM potential is governed by the extent, thickness and depth of the coal seamsthemselves, rather than by the areal extent of potential traps. Coals can be regionally extensive, but aregenerally thin relative to conventional oil and gas reservoirs. For instance, almost all the coals reviewed inthe Competent Person’s Report are less than a few metres in thickness. Coals are often vertically stacked,although this will depend on the basin geometry at the time of deposition. The amount of organic materialwithin individual coal seams, where well lithi¢ed (as with most UK Carboniferous coals), is generally quitehigh. However, ultimate gas contents per coal seam depend on the burial history of the coals.

Absorbed gas escapes from coals as they de-stress, for instance during the drilling or mining process. Ascoals are of low permeability relative to most conventional oil and gas reservoirs, a well developed fracture(cleat) network is essential for the extraction of gas at appreciable rates during de-stressing. This network canbe natural, or generated/enhanced by arti¢cial stimulation. Production rates from CBMwells are commonlylower than those from conventional oil and gas reservoirs.

CBM exploration and development globally and in the UKCBM development is most advanced in the USA where growth in the industry during the last decade,originally encouraged by substantial tax relief, has soared (the tax relief applied only to wells drilled andcompleted by end 1993). According to a report from the U.S. Energy Information Agency, 10 per cent. ofU.S. gas production is supplied from CBM sources. With similar large CBM resources in Australia andnumerous companies currently developing and evaluating commercial projects, CBM is making a signi¢cantcontribution to Australia’s east coast energy requirements. Other coal-rich countries where CBM is likely tohave a major impact include China, India, Ukraine, Romania and Russia.

See the graphs below:

Australian and US Historic and Forecast Production Eastern Australia gas production (PJ per annum)

Source: WoodMackenzie*Coal SeamGas (CSG) is a term synonymous with CBM, commonly used in Australia.

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In Britain, coal from indigenous mines was the chief source of energy used in the UK until the 1970s.Although its use in electricity production continued to rise after that decade, its overall consumptiondeclined. Around the time of coal industry privatisation in 1994 about three-quarters of electricity wasgenerated from coal. However, following privatisation, the electricity supply industry was no longer acaptive market for indigenous coal. In addition the use of coal in electricity generation rapidly declined as itwas replaced by natural gas and, to a lesser extent, by nuclear power.

Source: dti

Pre-2004The era before 2004 was characterised by a number of smaller organisations looking to secure prospectiveCBM acreage but often more directed at Coal Mine Methane operations (gas produced at disused coalmines).

Evergreen Resources was the ¢rst company to drill a dedicated CBM appraisal well in the UK at Sealand,Chester in 1992 and was the most experienced CBM operator as their parent company Evergreen ResourcesInc. of Denver, Colorado was a major CBM developer in the Raton Basin in the US. Evergreen continued to

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drill a series of appraisal wells in the UK until Pioneer Natural Resources acquired the parent organisation in2004, at which point Evergreen Resources’ activity in the UK ended. Evergreen Resources’ activities did notbene¢t from drilling technology that is available today and no laterals were drilled.

Another company that sought to actively pursue CMB in the UK at this time was StrataGas plc, which wasan Ofex listed company that then owned a number of IGL’s Licences and of which Francis Gugen was thenon executive chairman. StrataGas plc was not able to commence operations because it failed to secureplanning permission, after a public enquiry; in part due to special circumstances at the time that led toheightened concerns, such as plans for a nearby underground coal gasi¢cation project, and in circumstancesthat were di¡erent from today as explained under the heading 2004 to date below. The time and expenseincurred in pursuing this planning permission largely exhausted StrataGas plc’s funds, which ceased anymaterial operations in early 2004 and so the company completed a members’ voluntary liquidation in 2005,with the approval of over 99 per cent. of those shareholders voting. In 2004 IGL entered into an agreementwhereby it took over not only those of the Licences that StrataGas plc held but also a number of itsobligations and provided other consideration of cash and shares in IGL giving it a 24 per cent. holding.StrataGas plc’s 24 per cent. holding in IGL was diluted to some 4 per cent. when it chose, aftercommunicating with its shareholders, not to take up a share o¡ering made by IGL to fund its proposedlicence application for PEDL 145. IGL’s directors bought out the remaining shares that StrataGas plc held inIGL from the liquidator in 2005.

2004 to dateAround the period that IGL became active in CBM, several factors began to change the potential for thedevelopment of CBM in the UK.

1. Developments in Drilling Technology: The application of lateral drilling technology in coals, initiallypioneered in the US, o¡ers the opportunity for CBM developments to:

. access more coal surface from the same mother bore well, thereby providing the potential toaccess more coal at lower cost and to improve production and economics; and

. with a much lower geographical footprint, address one of the hurdles to development in the UK.A higher population density and the intensity of land use make space concerns a bigger issue thanin the US; which can manifest themselves in planning constraints. Lateral wells of which manyhave been drilled in the US, o¡er the potential to reduce the number of surface locations by afactor of 10, when compared with vertical wells draining the same area.

2. Security of Supply concerns: As discussed elsewhere in this document, the political outlook on oil, gasand coal projects in the UK has recently changed to view such projects in a more favourable light as aresult of growing awareness of the UK’s current reliance on energy from these sources in addition tothe country’s increasing dependence on imports of such energy.

3. Entrance of E&P multi-national corporations to UK CBM: During this period, several large multi-national E&P companies, have formed partnerships with existing UK CBM players. This o¡ers anopportunity for CBM expertise from other parts of the world to be applied in the UK, along with long-term development and operational experience and commitment.

UKCoal ResourcesNatural gas from the North Sea and other ¢elds provides a clean and, until recently, cheap and readilyavailable fuel. However, o¡shore gas production is rapidly declining and the UK became a net importer ofgas in 2004. According to Berr’s statistics there is now twice as much gas resource potential remainingonshore in the UK, at 90 tcf, as there is o¡shore UKCS.

The Department of Trade and Industry (‘‘dti’’) has sponsored a report ‘‘UK Coal Resource for newExploration Technologies’’. In this report areas of high mean gas content (7m3/tonne) were identi¢ed. IGLhas acreage in 4 of the top 10 areas identi¢ed in England and Wales and in all barring one area in England.IGL has not focused on many of the areas in Wales, which are mostly in South Wales, because of concernsabout the productability of anthracite coals, which characterise many of the SouthWales coals.

3.3 Government energy policyThe political outlook for oil, gas and coal projects in the UK has recently changed whereby such projects arenow viewed in a more favourable light as a result of growing awareness of the UK’s current reliance onenergy from these sources in addition to the country’s increasing dependence in imports of such energy. Inthe UK government’s Energy White Paper for 2007 it recognises that around 90 per cent. of the UK’s energy

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needs are met by oil, gas and coal. As can be seen from the chart below, gas is expected to constitute thehighest consumed fuel in the UK at 40 per cent. of total energy consumption in 2020.

Primary Energy Demand by Fuels (2020)

Source: DTI, 2007

TheWhite Paper states an intention to reduce dependence on imported fossil fuels by ensuring that economicrecovery of the oil and gas from the UK Continental Shelf is maximised. In this context, it asserts the need tomaintain a supportive regulatory environment that attracts a wide range of companies to exploit existing andprospective ¢elds. Particular emphasis has been put on rationalising the UK planning regime for nationallysigni¢cant gas supply infrastructure projects in England to bring all decision making under the proposedindependent infrastructure planning commission and to streamline onshore gas consents regimes.

Planning and regulatory framework related to CBM exploitation

The Government’s current policy on planning control of land-based exploration, appraisal, development andextraction of oil and gas (including gas from coal) resources in England can be found in Annex 4 of MineralPolicy Statement 1 (the ‘‘Policy Statement’’). Each council is required to draw up a minerals exploitationplan to ensure a co-ordinated approach to minerals development within the area. According to the PolicyStatement, oil and gas exploration and extraction operations are regulated by a licensing system operated bythe Secretary of State for Trade and Industry (SSTI), now Berr. Once a licence has been granted, giving thelicensee exclusive rights to search bore for and get petroleum from the licensed area, the licence owner must¢rst obtain planning permission from the relevant local authority and then obtain consent from the SSTI toeither drill a well or develop a CBM project.

Applications and permissions for CBM developments should re£ect the fact that CBM developments do nothave the same discrete phases of exploration, appraisal and production as conventional oil and gasdevelopments. Exploration and appraisal is a single process. The same wells that have been used forexploration/appraisal will often be used, as soon as possible, for production, though there may be anecessary delay for dewatering.

The main environmental impacts associated with CBM development are similar to those for conventional oiland gas. However, particular attention should also be given to the abstraction of any groundwater and itsimpacts, as well as the disposal of water produced during well stimulation and production of gas. TheEnvironment Agency must be consulted and the relevant permission(s) obtained before any disposal orabstraction takes place.

To date IGL has now sought and obtained planning permissions to drill wells from three out of the ¢vecounty councils in which its acreage is situated and with regard to the remaining two county councils, an

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application has been submitted to one council and the other council has jurisdiction over the relatively smallPEDL 116.

Fiscal environmentThe pro¢ts of the Company and IGL are subject to UK Corporation Tax at rates of up to 30 per cent. IGL isan on-shore gas company and it will also be subject to a supplementary charge to tax (SCT), currently 20 percent., in respect of UK upstream gas pro¢ts as and when these are generated. IGL is also subject to businessrates.

3.4 Summary of IGL’s assetsIGL holds onshore and o¡shore CBM interests in the UK, as listed in paragraph 3.4.2 below. These include a20 per cent. non-operated interest in PEDL 40-1, 56-1 (collectively ‘Swallowcroft’), 92-1 (‘Drax’), 145 (‘FourOaks’) and 78-1, 115-1 (‘Greater Swallowcroft’). IGL also have a 50 per cent. non-operated interest in PEDL107, and o¡shore Licences 110/18 (part), 110/19 (part) and 110/23 (part) ç collectively ‘Point of Ayr’.Additionally, IGL has a 20 per cent. non-operated interest in PEDL 115-2 and PEDL 116, which have yet tobe independently evaluated for GIIP. All the licences are Operated by Nexen.

All licences have been acquired for the purposes of exploration for CBM gas resources within coals of theWestphalian A and B Groups, which are Carboniferous in Age. Carboniferous coals form the bulk of themined coal strata in the UK. Thus, signi¢cant coal resource exploration has occurred in areas within oradjacent to the licences which have been historically mined for this coal resource. A large database of drillingresults has resulted from this activity.

3.4.1 Map of IGL’s Licence AcreageThe map below identi¢es the areas over which PEDLs have been granted, which, as explained above, includesome of the most prospective areas for CBM in the UK.

Swallowcrofts comprises: PEDLs 40-1 and 56-1 (collectively ‘‘Swallowcroft’’), PEDL’s 78-1 and 115-1(collectively ‘Greater Swallowcroft’) and PEDL 115-2 (which has yet to be evaluated for GIIP).

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3.4.2 Schedule of LicencesDetails of the Licences under IGL’s ownership and its interest in each licence is summarised in the tablebelow:

Onshore blocks

Licence/BlockArea(km2)

InitialExpiry Date Ownership Operator

OutstandingObligations

PEDL 040-1 45 March 2009 Nexen ^ 80%IGL ^ 20%

Nexen None

PEDL 056-1 18 March 2009 Nexen ^ 80%IGL ^ 20%

Nexen None

PEDL 78-1 100 Sept 2008 Nexen ^ 80%IGL ^ 20%

Nexen 1 Drill orDropWell

PEDL 92-1 200 Sept 2008 Nexen ^ 80%IGL ^ 20%

Nexen None

PEDL 107 21 Jan 2008* Nexen ^ 50%IGL ^ 50%

Nexen 1 Drill orDropWell*

PEDL 115 300 Jan 2008** Nexen ^ 80%IGL ^ 20%

Nexen 1 Drill orDropWellplus lateral

PEDL 116 28 Jan 2008** Nexen ^ 80%IGL ^ 20%

Nexen 1 Drill orDropWell

PEDL 145 74 Sep 2010 Nexen ^ 80%IGL ^ 20%

Nexen None

MDL 036 n/a Apr 2020 IGL ^ 100% n/a None

MDL 038 n/a Jun 2011 IGL ^ 100% n/a None

*Well planned to be spudded in December 2007** Licence extensions under discussion with Berr

The MDLs are of no economic value to IGL, since they cover much of the same area as do certain of IGL’sPEDLs and are a legacy of the past.

As regards the e¡ect of the Initial Expiry Date, under the terms of the PEDLs at this date IGL may extend itsholding into a second term of 5 years, except in the case of PEDLs 40-1 and 56-1 which are already in theirsecond term and PEDLs 78-1 and 92-1 where the period is reduced to 3 years because the ¢rst period wasextended by 2 years. Thereafter PEDLs may be extended for 20 years, and for a further period beyond that if¢elds are still in production, provided the licensee has a ¢eld development plan to exploit the acreage. At theend of the ¢rst term licensees are normally required to relinquish some 50 per cent. of the originally heldacreage. IGL’s obligations in this regard have all been satis¢ed, except as regards PEDL 92-1 ç as tobetween 29 km2 and 61 km2 (depending on the interpretation of the rules), PEDL 116 ç 4 km2 and PEDL145 ç 40 km2. However, it is Berr’s general policy not to require relinquishments of acreage that containpetroleum that is part of/contiguous with any prospect or ¢eld under active investigation or development.

O¡shore blocks

Licence/BlockArea(km2)

InitialExpiry Date Ownership Operator

OutstandingObligations

SPPL 1481 190 Mar 2011 Nexen ^ 50%IGL ^ 50%

Nexen 1 Contingentwell

As regards the Initial Expiry Date, under the terms of SPPLs at this date IGL may extend its holding into asecond term of four years, provided the obligations have been satis¢ed. Thereafter licences may be extendedinto a third term of 18 years and for a further period beyond that if ¢elds are still in production, provided thelicensee has a ¢eld development plan to exploit the acreage. At the end of the ¢rst term, licensees arenormally required to relinquish some 50 per cent. of the originally held acreage. However, it is Berr’s general

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policy not to require relinquishments of acreage that contain petroleum that is part of/contiguous with anyprospect or ¢eld under active investigation or development.

3.4.3 Summary of ResourcesAn independent estimation of GIIP for certain CBM interests held by IGL was carried out by EquipoiseSolutions Limited, full details of which can be seen in the Competent Person’s Report in Part III of thisdocument. A summary of the blocks covered by the report and its results can be seen below. According to theCompetentPersonthenet totalmidcaseGIIP,afterapplying the risk factors to the relevantblocks, is 893bcf.

(all ¢gures in bcf) Gross NetRisk

Factor*

RiskWeightedNetMidCase

Area Low Mid High Low Mid High

PEDL 40-1 & 56-1 563 854 1,326 113 171 265 100% 171

PEDL 145 (N ofMersey) 116 181 299 23 36 60 100% 36

PEDL 145 (S ofMersey) 99 444 803 20 89 161 80% 71

PEDL 92-1 383 652 1,134 77 130 227 100% 130

Point of Ayr Onshore (PEDL107)

2 4 10 1 2 5 100% 2

Point of Ayr O¡shore(110/19 Part)

87 162 1,141 43 81 571 100% 81

Point of Ayr O¡shore (110/18Part and 110/23 Part)

120 508 4,340 60 254 2,170 80% 203

PEDL 78-1 309 874 1,794 62 175 359 50% 88

PEDL 115-1 B (W) 226 832 1,923 45 166 385 50% 83

PEDL 115-1 A (E) 106 138 361 21 28 72 100% 28

TOTALGIIP (bcf) 2,011 4,649 13,132 465 1,132 4,274 893

* The risk factor is an estimate to account for the chance of coals being absent or falling outside the cut-o¡ ranges used for GIIPcalculations.

3.4.4 Details of Primary Assets3.4.4.1Four Oaks, PEDL 145

Geologically, the area under licence is formed by strata of Carboniferous and Permo-Triassic Age, gentlydipping to the south and south-east. BGS geological maps show that these strata are cut by a number ofnorth-south striking normal faults, throwing to the east and west, creating a number of normal fault blocksand horsts. The Carboniferous Westphalian coal measures sequence outcrops to the north of the licences.The dip of the strata place the Westphalian at depths greater than 6,500’ to the south of the licence, which iscurrently beyond the maximum depth for CBM exploitation as adopted by Nexen. This has an impact on theGIIP calculations to the south of the river Mersey.

Activity at Four Oaks

Two wells have been drilled at the Doe Green site within PEDL 145. Planning is in place for another twowells within the curtilage of Fiddlers Ferry power station; with commercial arrangements yet to beconsummated for use of this site. At Doe Green a vertical well was drilled and cored. The results of the coringwere as expected and correlated with the other bore hole data locally. A second well was drilled at Doe Greenwith an in-seam lateral leg. This well was successfully de-watered and is currently on production test. Goodquality gas is £owing continuously to surface and the permeability of the coal has been demonstrated.Although, it is too early to conclude on long term production rate potential, it is Nexen and IGL’s intentionto drill additional lateral legs in this well in 2008 and to continue production testing post this drilling.

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3.4.4.2Swallowcrofts and Greater Swallowcroft, PEDLs 040-1, 056-1, 78-1, 115-1

Swallowcroft (PEDLs 040-1 and 056-1): Geologically, the area is formed by a series of open, westwardplunging anticlines and synclines, outcropping rocks of Triassic to Carboniferous Age at surface, with theCarboniferous Westphalian Coal Measures sequence outcropping to the north of the licences. A large fault,the Wem Fault, downthrows Carboniferous strata to the westerly edge of the licences. Althoughquanti¢cation of this throw is di⁄cult, estimates place it at more than 1km, making the Carboniferous stratatoo deep for CBM exploration at present.

Greater Swallowcroft (PEDLs 78-1 and 115-1): Geologically, the area under licence is formed by strata ofCarboniferous and Permo-Triassic Age. Solid geological maps show the area to be generally dipping fromsouth to north, with a complex of north-south trending normal faults, commonly downthrowing to the eastin the case of PEDL 78-1 and to the west in the case of PEDL 115-1.

Activity at Swallowcrofts

Within PEDL 78 a well site has been identi¢ed and planning permission applied for a vertical assay well.Negotiations are on-going with a local landowner and signi¢cant employer within PEDL 056-1 over landaccess and a supply agreement for gas to their facilities. This is likely to become a production site, subject todrilling results.

3.4.4.3 Drax, PEDL 92-1

Geologically, the area under licence is formed by strata of Carboniferous and Permo-Triassic Age, gentlydipping to the south and south-east. Mining in the area focused on Westphalian B coals, which, from theavailable borehole data, are at depths of approximately 200m to 1000m below surface. Although the area hasbeen licensed historically for CBM exploration, no boreholes have been drilled on the licence for thispurpose.

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Activity at Drax

A vertical well, designed primarily to obtain geological data and retain the licence acreage was drilled at MillFarm within PEDL 92 in September 2007. This well has been cored and logged and an injectivity test carriedout. The results of this activity were as expected and correlate with other borehole data locally.

3.4.4.4Point of Ayr, PEDL 107 and SPPL 1481

Geologically, the area under licence is formed by strata of Carboniferous and Permo-Triassic Age, deformedas an upthrown anticlinal structure, plunging northwards. For the most part, the onshore outcrop (withPEDL 107) is composed of strata older than the Westphalian coal measures. Geological structure to theo¡shore is poorly constrained in Blocks 110/18 and 11/23, and is discussed in more detail in the CPR below.

Activity at Point of Ayr

A site has been identi¢ed at Mostyn Docks and land access agreed. Planning permission has been grantedand a well on this site is expected to be spudded by early December. The purpose of this well is to log and corethe coal sequence and obtain data related to the permeability of the coals. This well will satisfy the drill ordrop obligation on PEDL 107.

3.4.4.5Greater Swallowcroft, PEDL 115-2 and Four Oaks PEDL 116

Geologically these areas have not been evaluated for GIIP and there has been no signi¢cant activity in eitherarea to date.

3.4.5 Planning PermissionsIGL recognise that land access and approvals are essential to progress their current envisaged workprogramme. As of the date of this document the Doe Green site on PEDL 145, the Mill Farm site on PEDL98-1 and the Mostyn Quay site on PEDL 107 all have all permissions and relevant leases in place. Anapplication has been submitted for a site within PEDL 78-1, but planning permission has not beendetermined. PEDL 56-1 and PEDL 115-1 are in the lease negotiation stage and/or have planningapplications pending.

3.5 Nexen relationship and agreements3.5.1 Introduction to NexenNexen is co-owner and operator of the Licences other than the MDLs as set out in 3.4.1 above. Nexen is aCanadian-based, global energy company with a market capitalisation of approximately CN$16bn listed onthe Toronto and New York Stock Exchanges. It explores, produces and markets energy globally including inthe regions of the North Sea, the deep-water Gulf of Mexico, the Middle East, o¡shore West Africa and theCanadian Athabasca oil sands. In addition to Nexen’s experience in conventional energy, it is an experiencedCBM explorer and developer having started out with CBM exploration in Alberta, West Canada in 2002. Bythe end of 2006 Nexen held more than 448,000 acres of land in Alberta with CBM potential and has declaredan interest in increasing CBM production to at least 150 mmcf/d. It was Nexen’s extensive CBM experiencethat led it to be selected by IGL to become its operating partner over the Licences.

Nexen has also made signi¢cant investment in the North Sea with approximately 36 per cent. of Nexen’stotal production coming from this region. Its stated strategy for the UK is to continue exploring andexploiting assets near existing infrastructure.

3.5.2 Farm-InThe relationship between Nexen and IGL began in December 2005 when, following a period of due diligenceby Nexen over the Licences, geological data and IGL’s management team, the two parties agreed a farm-inallowing Nexen an 80 per cent. equity interest in and the rights to operate the seven PEDLs then held by IGL,namely, PEDLs 40-1, 56-1, 78, 92-1, 115, 116 and 145. Evidence of the development of the relationshipbetween Nexen and IGL is that they successfully applied together on a 50-50 basis for acreage in the24th Seaward Round in 2007 along with the acquisition of the adjacent on-shore block PEDL 107. Inrelation to these PEDLs Nexen is the Operator of this additional acreage.

Carry AgreementsNexen and IGL also entered into carried interest agreements (the ‘‘Carry Agreements’’) whereby Nexen hasagreed to bear and pay IGL’s 20-50 per cent. share of the costs in relation to operations across the abovelicences incurred before 31 December 2009. Nexen’s obligations under the Carry Agreements are subject to

23

approved budgets and are limited to an aggregate payment of up to »5.75 million, IGL’s share currentlyequates to an investment across all licences of up to »26.5 million. Under the Carry Agreements, no interestwill accrue against IGL until commercial production commences, when IGL may be required, in certaincircumstances and on a PEDL by PEDL basis, to repay carried costs and interest arising postcommencement of production. The arrangements further provide that IGL may choose to meet obligationsrelated to certain PEDLs directly, thereby preserving the value of the Carry Agreements for higher riskactivities in other PEDLs, such as exploration and appraisal activity.

Management Services AgreementsThis agreement is more fully described in paragraph 12.3(a)(ii) of Part VII of this document. In respect ofthis agreement there are provisions in relation to change of control of IGL which have been waived for thepurposes of the Acquisition. Further, the agreement provides that the Proposed Directors must form themajority of the board of IGL (which will be the Company’s wholly owned subsidiary following completion ofthe Acquisition) for a minimum period related to that for which the management fees are paid. Theseprovisions fall away at the latest on 31 December 2009. Following 2 January 2008 the remainingmanagement fees outstanding will be »500,000.

3.5.3 Responsibilities of Nexen as operatorWith Nexen being the nominated operator under the joint operating agreements (the ‘‘JOAs’’) for each of theLicences that requires an operator, IGL has limited responsibilities and burdens in relation to the Licences.Nexen conducts the operations by itself, with overall supervision of an operating committee, for eachLicence, composed of representation from both IGL and Nexen (the ‘‘Operating Committee’’). The operatoris only authorised to make such expenditures as are approved by the relevant Operating Committee, which inthe case of each of the JOAs requires the a⁄rmative vote of IGL to achieve approval.

The operators key duties and responsibilities can be summarised as follows:

(1) Annual submission of development program and budget to each Operating Committee for approval;

(2) Preparation and submission of authority for expenditure to the relevant Operating Committee forapproval, prior to any major capital expenditure;

(3) Provide to IGL reports, data and information concerning the operations;

(4) Procuring services and material relevant to the operations, subject to certain noti¢cation procedures;

(5) Procuring any necessary governmental or statutory consents or permissions, subject in certaincircumstances, to prior approval be the relevant Operating Committee; and

(6) Execution of approved capital and operating plans in accordance with good oil ¢eld practice.

However, IGL retains control over its own gas sales and relations with Berr regarding IGL’s Licenceholdings.

4. Further information on IGLThe Competent Persons Report on IGL is contained in Part III of this document. This report was preparedby Equipoise Solutions Limited and provides details of key Licence terms and estimates of GIIP.

5. Objectives and StrategyThe Enlarged Group has clear objectives for 2008. As stated above, these are to:

(1) commence initial gas sales from CBM production from at least one property by the end of 2008;

(2) secure routes to market with a focus on electricity generation and access to the gas network. IGL hasidenti¢ed four alternative routes to market and in conjunction with Nexen are evaluating the potentialfrom each. These are:

. Direct gas sales to the gas network;

. On-site generation of electricity;

. On-site compression and subsequent sales as compressed natural gas;

. Sales to local customers;

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(3) continue to gather data and production experience to allow a proportion of GIIP to be classi¢ed as‘‘recoverable resource’’;

(4) ful¢l well obligations on Licences as necessary to secure ownership into up coming second terms; and

(5) apply for acreage, together with Nexen, in the recently announced 13th licensing round.

Sequestration potentialIn the UK, proposals have been made to ¢t plant to certain of the existing coal-¢red power stations that willbe capable of removing up to 90 per cent. of the carbon dioxide emissions from the stations where such plantis ¢tted. The storage of such carbon dioxide in coal is being considered

The Directors believe that IGL’s acreage may in the future have the potential to be developed for thesequestration of carbon dioxide (CO2), as its coal in situ may be capable of absorbing injected CO2. Anysequestration in the UK would be subject to the characteristics of the coals that can only be assessed as IGLputs its UK acreage into production. Accordingly, sequestration in coal remains totally unproven in the UKat present. The potential value of the Licences could be enhanced as sequestration resources given theproximity of IGL’s acreage to much of the UK’s coal-¢red power plant. IGL has no current plans to developsequestration as its focus is on developing the UK’s ¢rst commercial CBM gas production.

6. Current trading and prospectsThe Company has been working towards rejuvenating its existing business and has reviewed new projects ina number of energy related areas. A number of smaller projects from the Company’s existing portfolio havebeen advanced following a period of inactivity due to ¢nancial constraints. Some revenue has been generatedfrom the Existing Projects but 60 per cent. of the net revenue will £ow to former creditors under the terms ofthe CVA. Future revenues from such projects are uncertain.

With regard to the CVA, agreement has been reached with all the Company’s creditors who had proved inthe CVA. The proposed variations to the CVA will bring the CVA to an end and the Company will no longerbe bound by the conditions set out in the CVA. The Existing Projects will, subject to creditor andShareholder approval, be transferred to a new wholly owned subsidiary of the Company, KP Wind andBiomass Limited and this Company will immediately be sold to Blenheim Energy Limited. Blenheim EnergyLimited and KP Wind and Biomass Limited will indemnify the Company against any further liability tocreditors arising under the CVA and will discharge any remaining obligations to creditors arising out of theExisting Projects.

The Company published its interim results on 28 September 2007 which show a pro¢t before taxation of»370,214, a result largely grounded on an exceptional pro¢t created by adjustments to prior provisions madein connection with the CVA and capital reorganisation.

The Acquisition will not have any e¡ect on any employees of IGL. The Company has no employees as at thedate of this document. Prior to completion of the Acquisition the Company has no ¢xed business premisesand accordingly the Acquisition will have no e¡ect on the location of its places of business.

The Company will continue to pursue further equity capital investment with particular emphasis ondeveloping an institutional shareholder base and potentially accelerating the development of the business ofthe Enlarged Group. Accordingly, the Resolutions to be proposed at the EGM include a disapplication ofpre-emption rights in respect of issues of New Ordinary Shares for each at 20 per cent. of the Enlarged ShareCapital of the Company.

7. Summary terms of the AcquisitionIf the Acquisition proceeds, IGL Shareholders will receive:

for each A ordinary share in IGL held after the Scheme becomes e¡ective ç 70,707 Consideration Sharesfor each B ordinary share in IGL held after the Scheme becomes e¡ective ç 92,592 Consideration Sharesfor each C ordinary share in IGL held after the Scheme becomes e¡ective ç 92,592 Consideration Sharesfor each D ordinary share in IGL held after the Scheme becomes e¡ective ç 256,410 Consideration Shares

Assuming a maximum number of 55,555,365 Consideration Shares will be issued pursuant to theAcquisition, the IGL Shareholders will hold New Ordinary Shares representing approximately 94 per cent.of the Enlarged Share Capital. Based on the Purchase Price of 90 pence per Ordinary Share , the Acquisitionvalues existing issued share capital of IGL at approximately »50 million (»47.3 million at the Suspension

25

Price). The outstanding »44,000 redeemable preference shares in IGL will be purchased at par by IGL inaccordance with the Scheme.

In the event that the Scheme does not become e¡ective or fails for any other reason, the Company and themajority IGL Shareholders have reserved the right to attempt to complete the acquisition by private treaty.

Save as disclosed in Part I of this document (particularly as regards the acquisition of IGL and the transfer ofthe Existing Projects to KP Wind and Biomass and the Associated ion-sale to Blenheim Energy Limited),there will be no other major changes introduced to the business of the Company. The Consideration Shareswill rank pari passu in all respects with the New Ordinary Shares resulting from the consolidation of theExisting Ordinary Shares. The Acquisition is conditional upon the Conditions being satis¢ed by 31 January2008. Assuming that the Conditions are satis¢ed by that date, it is anticipated that dealings in theConsideration Shares will commence on 31 December 2007.

8. Board of DirectorsMr John Bryant, Non-Executive Chairman, aged 61Mr Bryant was appointed to the Board in May 2004. He is Chairman of Gas Turbine E⁄ciency plc and is aNon-Executive Director of Weatherly plc. These are both quoted on AIM. He is also a board member ofthe Attiki Gas Company, which supplies natural gas to Athens and the surrounding districts.

John Bryant previously served as President of Cinergy Global Resources Corp, responsible for allinternational business and global renewable power operations of this US based electricity and gas utilityprovider. Before joining Cinergy, John was Executive Director with Midlands Electricity plc. He has beeninvolved in developing a number of large gas ¢red power stations both in the UK and overseas, together withboth electricity and gas distribution in Europe and Africa, renewable power in Europe and North Americaand gas and electricity trading. His prior experience was at British Sugar plc, Drexel Limited, the BritishOxygen Company and Unilever plc. Drexel, where he was President, was a global oil and gas equipmentmanufacturing and servicing company.

Mr Bryant holds an MSc from Reading University and a BA from Nottingham University, and is a Fellowof the Institute of Directors and a Fellow of the Royal Society of Arts.

MrRichard Armstrong, Non-Executive Director, aged 59Mr. Armstrong is an associate with Fiske plc, the AIM quoted stockbrokers. He is a former equity analystwith extensive experience in reconstructing and raising capital for turnaround situations especially in thequoted microcap sector, including Optimisa plc, Weatherly International plc and Artilium plc.

MrPeter Redmond, Non-Executive Director, aged 61Mr. Redmond has over 20 years’ experience in corporate ¢nance and venture capital. After leavingDurlacher Limited in 2003, he joined Merchant House Group plc and is now Chief Executive O⁄cer of itscorporate ¢nance subsidiary, Merchant Capital Limited. He has been active in reconstructing a number ofAIM companies as investing companies in recent years including Optimisa plc, Weatherly International plcand Artilium plc; and each of these have since successfully acquired or established operating businesses.Mr Redmond is a director of AIM quotedWeatherly International plc and Bella Media plc.

9. Proposed DirectorsAs part of the Proposals, Francis Gugen, Andrew Austin and Brent Cheshire have agreed to join the Boardof the Enlarged Group.Mr Gugen, Mr Austin andMr Cheshire are all currently directors of IGL.

Mr Francis Gugen, Proposed Executive Chairman, aged 58Francis Gugen is the founder, majority owner and Executive Chairman of IGL. Francis has over thirty yearsoil and gas industry experience. Between 1982 and 2000 he helped grow Amerada Hess in North WestEurope, ultimately becoming CEO. He is a member of the CBI’s Energy Policy and Economic a¡airsCommittees. Mr Gugen is also a past President of the UK O¡shore Operators Association, past chair of theindustries representation on the UK Government Oil & Gas Task Force (now known as Pilot) and of theCBI’s Environmental A¡airs Committee.

Mr Gugen is a chartered accountant having worked for Arthur Andersen for eight years until 1982,principally as an oil & gas specialist. He is currently a Non-Executive Director, Vice Chairman of the Boardand Chairman of the audit committee of Petroleum Geophysical Services ASA and a Non-Executive

26

Director and member of the audit committee of the Britannia Building Society. Until 2006 he served as Non-Executive Director of North Sea gas ¢elds and pipelines operator CH4 Energy Limited before it wasacquired in 2006 by Venture Petroleum Plc for Euro 224 million. CH4, which was formed in late 2002, hadpreviously been ¢nanced by private equity investors 3i and Trust Company of the West, majority owned bySociete Generale. Mr Gugen is also the non executive chair of Chrysaor Limited a new company focused ondeveloping North Sea oil and gas ¢elds, with »100 million of backing from Barclays Capital and privateequity investors Natural Gas Partners IX, LP and of Fraudscreen Limited a new ¢nancial services business.

Mr Gugen will assume the role of Executive Chairman of the Enlarged Group subject to his appointmentbeing approved at the EGM. Mr Gugen will devote such time to the Enlarged Group as is required todischarge his duties which is expected to be not less than one and a half days per week.

MrAndrew Austin, Proposed Chief Executive O⁄cer, aged 42Andrew Austin is the Chief Executive O⁄cer of IGL. Mr Austin specialises in energy projects in the gas,electricity and renewables sector. He has been involved in ventures as principal and has also raisedsubstantial funds of private and public equity for clients during the course of his career to date. Mr Austinspent 17 years working in investment banking in the City of London with Merrill Lynch, Nomura, Citibankand Barclays Capital. Latterly he was General Manager of Creditanstalt Investment Bank in London. Healso has six years of management and consultancy experience with clean tech companies including GenericsGroup andWhit¢eld Solar.

Mr Austin will assume the role of Chief Executive O⁄cer of the Enlarged Group subject to his appointmentbeing approved at the EGM.

Mr Austin has been an executive director of IGL since 2004 and has been responsible for day to dayoperations and business development throughout that period.

MrBrent Cheshire, Proposed Executive Technical Director, aged 52Brent Cheshire is the Technical Director of IGL. After 14 years at Shell, Mr Cheshire joined Amerada Hessin 1991, where he had a range of roles culminating in Senior VP E&P Worldwide Technology and CEOScandinavia. Mr Cheshire has signi¢cant experience in geology, drilling technology and project managementand is managing director of DONG E&P (UK) Limited, under arrangements that allow him to devoteappropriate time to IGL.

He was responsible for Amerada’s entry into Denmark through identifying the potential of the un-drilledSouth Arne prospect, managing its acquisition and developing its production. Mr Cheshire is a petroleumengineer having graduated as a geologist from Durham University. Since leaving Amerada, Mr Cheshire hasbeen a senior adviser to the Danish Oil and Natural Gas company assisting it with the design andimplementation of its growth strategy.

Mr Cheshire will assume the role of Executive Technical Director of the Enlarged Group subject to hisappointment being approved at the EGM. Mr Cheshire will devote such time to the Enlarged Group as isrequired to discharge his duties which is expected to be two days per week.

10. WarrantsIt is proposed that in recognition of the services of Peter Redmond, Richard Armstrong and John Bryant, theExisting Directors and David Lindley who recently stepped down from the Board, that warrants be grantedto these individuals in recognition of the work carried out by them in orchestrating the reconstruction andre¢nancing of the Company. Each individual will receive 110,000 Warrants of which 82,500 are exercisableinto New Ordinary Shares at a price of 55p per New Ordinary Share and 27,500 are exercisable at a price of75p per New Ordinary Share. The Warrants are in all cases exercisable for a period of 3 years, ending on thethird anniversary of Admission. The lowest exercise price for the ¢rst tranche of Warrants is based upon theprice at which the Company raised »900,000 by way of the Loan Note Issue. The Warrants collectivelyrepresent 0.74 per cent. of the Enlarged Share Capital.

11. Lock-ins and orderly market arrangementsFollowing Admission, the Directors (and persons connected and/or associated with them) will be interested,in aggregate, in 50,367,973 New Ordinary Shares representing approximately 85.2 per cent. of the EnlargedShare Capital. Details of these shareholdings are set out in paragraph 9.1 of Part VII of this document.

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Each of the Directors have undertaken to the Company and Libertas Capital that, save in certain limitedcircumstances, he will not dispose of any of the New Ordinary Shares held by him after Admission for aperiod of twelve months following Admission in the case of each Proposed Director and six months afterAdmission in the case of each Existing Director (the ‘‘Directors Lock-up Period’’). In all cases the DirectorsLock-up Period may be waived or shortened in respect of some or all of the New Ordinary Shares byagreement between Libertas Capital and the Director or Directors concerned. Each of the ExistingDirectors/Proposed Directors has further undertaken to the Company and Libertas Capital that, in the 6months following the Directors Lock-up Period in respect of the Existing Directors and the 12 monthsfollowing the Directors Lock-up Period in respect of the Proposed Directors, any sale of New OrdinaryShares held by him will be e¡ected through Libertas Capital in such orderly manner as Libertas Capital mayreasonably require with a view to maintaining an orderly market in the share capital of the Company.

Each member of the Concert Party, other than the Proposed Directors whose arrangements are describedabove (the ‘‘Other Concert Party Members’’), is expected, as part of the Scheme, to undertake to theCompany and Libertas Capital that, save in certain limited circumstances, he will not dispose of any of morethan 15 per cent. of the New Ordinary Shares held by him after Admission for a period of twelve monthsfollowing Admission. Such period may be waived or shortened in respect of some or all of the New OrdinaryShares by agreement between Libertas Capital and the other Concert Party Member or Members concerned.Each of the Other Concert Party Members is also expected, as part of the Scheme, to further undertake to theCompany and Libertas Capital that, in the 24 months after Admission, any sale of New Ordinary Sharesheld by him will be e¡ected through Libertas Capital in such orderly manner as Libertas Capital mayreasonably require with a view to maintaining an orderly market in the share capital of the Company.

In all cases the lock-ins and orderly market arrangements do not prevent the restricted party from accepting,or agreeing to accept, an o¡er made for the entire issued share capital of the Company.

12. Dispensation from Rule 9 of the Takeover CodeUnder Rule 9 of the Takeover Code, if a person acquires, whether by a series of transactions over a period oftime or not, an interest in shares, which, taken together with shares in which he and persons acting in concertwith him are already interested, carries 30 per cent. or more of the voting rights of a company which is subjectto the Takeover Code then that person must normally make a general o¡er for all the remaining shares in thecompany to acquire their shares. Similarly, when any person or persons acting in concert are interested inshares which carry an aggregate not less than 30 per cent., but not more than 50 per cent., of the voting rightsof such a company, a general o¡er will normally be required if any further interests in shares are acquired byany such person. However, where an obligation to make a mandatory o¡er under Rule 9 of the Takeover Codearises following a new issue of shares the Panel will normally consent to a waiver of that obligation providedthat, amongst other things, this is approved by a vote of the independent shareholders of the Companyconcerned.

An o¡er under Rule 9 must be in cash and at the highest price paid within the preceding twelve months forany shares in the company by the person required to make the o¡er or any person acting in concert with him.A concert party arises where persons acting in concert pursuant to an agreement or understanding (whetherformal or informal) co-operate, to obtain or consolidate control of that company or to frustrate thesuccessful outcome of an o¡er for a company. Control means an interest or interests in shares carrying 30 percent. or more of the voting rights of a company, irrespective of whether the interest or interests give de factocontrol.

For the purposes of the Takeover Code, the IGL Shareholders are deemed to be acting in concert with eachother and are a Concert Party.

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Full details of the resultant maximum potential shareholdings of the Concert Party followingimplementation of the Scheme:

Name

No. ofConsideration

Shares

No. ofConsiderationShares as % ofthe EnlargedShare Capital

Resultant %of the

EnlargedShare Capital

Andrew Austin 11,429,253 19.4 19.4Brent Cheshire 11,429,253 19.4 19.4Francis Gugen 27,419,097 46.4 46.4Leigh Dyson 648,144 1.0 1.0Edward Lasseter 648,144 1.0 1.0Andrew Purcell 648,144 1.0 1.0Michael Smith 769,230 1.4 1.4Roger Smith 2,564,100 4.4 4.4

Total 55,555,365 94.0 94.0

Further details of, and information concerning, the Concert Party is set out in paragraph 7 of Part VIII ofthis document.

Following implementation of the Scheme, the members of the Concert Party will between them holdapproximately 94 per cent of the Enlarged Share Capital of the Company and could thus be required by thePanel to make a general o¡er under Rule 9 of the Takeover Code for the issued share capital of the Companynot already owned by them. In addition Mr Gugen will hold approximately 46.4 per cent of the EnlargedShare Capital of the Company and could thus individually be required by the Panel to make a general o¡erunder Rule 9 of the Code for the issued share capital of the Company not already owned by him.

The Takeover Panel has agreed, however, to waive the requirement that would otherwise arise under Rule 9of the Takeover Code as a result of the Concert Party and/or Mr Gugen individually acquiring NewOrdinary Shares pursuant to the implementation of the Scheme subject to the approval of Shareholders.Accordingly Resolution 2 is being proposed at the Extraordinary General Meeting and will be taken on apoll.

Following implementation of the Scheme and the approval by Shareholders of the waiver of Rule 9 themembers of the Concert Party will between them hold more than 50 per cent, of the Company’s voting sharecapital and as a result, the Concert Party will be able to increase their aggregate interest in shares withoutincurring any further obligation under Rule 9 to make a general o¡er for so long as they continue to be treatedas acting in concert (although individual members of the Concert Party will not be able to increase theirindividual percentage shareholdings through or between a Rule 9 threshold without Panel consent).

Personal pro¢les of Mr Gugen, Mr Austin and Mr Cheshire are set out in paragraph 10 above. The othermembers of the Concert Party are consultants to IGL, or were directors of StrataGas plc, brief biographicaldetails of these individuals are set out in paragraph 7 of Part VII of this document.

13. Dividend policyThe Company has not paid any dividends since its incorporation. The Directors intend to devote theCompany’s cash reserves to appraisal and development activities in the short to medium term and intend tocommence the payment of dividends only when they consider it to be commercially prudent to do so, havingregard to the availability of the Company’s distributable pro¢ts and the retention of funds required to¢nance future growth.

14. Board Composition and Corporate GovernanceThe Board of Directors will be composed of 6 members at Admission. Each Director has one vote, with theChairman having a casting vote so long as Francis Gugen, Andrew Austin and Brent Cheshire together holdmore than 75 per cent. of the Company’s ordinary shares in issue. The Board of Directors has established anaudit committee, a remuneration committee and a nomination committee.

The Company expects that the Board of Directors will meet at least eight times per year and may meet atother times at the request of any Director.

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The Directors support high standards of corporate governance. The Company is a smaller company andaccordingly the Directors, after consultation with Libertas Capital believe it appropriate to follow theCorporate Governance Guidelines for AIM Companies issued by the Quoted Company Alliance (the ‘‘QCACode’’). For smaller companies (i.e., companies in the FTSE 350 and smaller) such as the Company (basedon the Company’s enlarged market capitalisation), the QCA Code currently recommends that the board ofdirectors should include at least two independent non-executive directors. The QCA Code also provides thatboth the audit and the remuneration committees should consist exclusively of independent non-executivedirectors and that the majority of members of the nomination committee should also be independent non-executive directors.

The QCA Code also recommends that the Board of Directors should appoint one of its independent non-executive directors to be the senior independent director. The senior independent director should be availableto shareholders if they have concerns that contact through the normal channels has failed to resolve or forwhich such contact is inappropriate. John Bryant has been designated as the senior independent non-executive director.

From Admission, the Directors intend to comply with the QCA Code save as disclosed under the heading‘‘Warrants’’.

At Admission, the Board of Directors will consist of 6 members, of whom 3 are non-executive Directors (allthree of whom are considered independent in the context of the business and their shareholdings of theEnlarged Group).

The audit committee will be chaired by Richard Armstrong, and its other members will be John Bryant andPeter Redmond. The committee will normally meet not less than four times a year and will meet the internal,if any, and external auditors at least twice a year without the executive Directors present. The ChiefExecutive O⁄cer and, because of his ¢nancial background, the Chairman of the Company will also attendthese meetings at the invitation of the committee.

The audit committee will be responsible for making recommendations to the Board of Directors on theappointment of the external auditors and their remuneration. The committee will keep under review theexternal auditors’ independence. The committee will consider the nature, scope and results of the auditor’swork and will develop a policy on and review (reserving the right to approve) any non-audit services that areto be provided by the external auditors. It will receive and review reports frommanagement and the EnlargedGroup’s auditors relating to the Enlarged Group’s annual report and accounts. The committee will focusparticularly on compliance with legal requirements, accounting standards and the AIM Rules and onensuring that an e¡ective system of internal ¢nancial and non-¢nancial controls is maintained. The ultimateresponsibility for reviewing and approving the annual report and accounts will remain with the Board ofDirectors.

The remuneration committee will be chaired by John Bryant and the other members are Richard Armstrongand Peter Redmond. The committee, which will normally meet at least twice a year, will have responsibilityfor making recommendations to the Board of Directors on the Company’s policy on the remuneration of theChairman, executive directors and other senior executives and for determining, within agreed terms ofreference, speci¢c remuneration packages for each of the Chairman and the executive directors of theCompany and such members of senior management as it is delegated to consider, including pension rights,any compensation payments and the implementation of executive incentive schemes. In accordance with thecommittee’s terms of reference, no Director may participate in discussions relating to their own terms andconditions of service or remuneration.

The nomination committee will be chaired by John Bryant and its other members are Francis Gugen andRichard Armstrong. The committee, which will normally meet not less than twice a year, will haveresponsibility for considering the size, structure and composition of the Board of Directors, retirements andappointments of additional and replacement directors and making appropriate recommendations to theBoard of Directors. The committee will also be tasked with ensuring that plans are in place for orderlysuccession to the Board of Directors and senior management positions, so as to maintain an appropriatebalance of skills and experience within the Company and the Board of Directors. The Chief Executive O⁄cerof the Company will be invited to attend meetings of the committee when the committee is discussing mattersrelated to executive management and such other matters as the committee chairman deems appropriate.

The identity of each of the chairman of the committees referred to above, will be reviewed on an annualbasis.

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15. Extraordinary General MeetingAttached to this document you will ¢nd a notice convening an extraordinary general meeting of theCompany which is to be held at the o⁄ces of Morrison & Foerster MNP, 7th Floor, CityPoint, OneRopemaker Street, London EC2Y 9AW at 12.00 midday on 27 December 2007. The EGM Resolutions willbe proposed to:

(1) approve the Acquisition;

(2) approve the waiver of the requirement under Rule 9 of the Takeover Code for the Concert Party, tomake a general o¡er for the remainder of the issued share capital of the Company;

(3) approve the amendments to the CVA and the disposal of the Existing Projects to Blenheim EnergyLimited;

(4) approve the issue of theWarrants;

(5) consolidate every 50 of the Existing Ordinary Shares of 1p each into 1 New Ordinary Share of 50p;

(6) increase the authorised share capital of the Company to »45,000,000;

(7) authorise the Directors pursuant to section 80 of the Act to allot relevant securities including, amongstothers, the Consideration Shares;

(8) authorise the Directors to allot relevant securities for cash as if the statutory pre-emption rights set outin section 89 of the Act did not apply to such allotment;

(9) appoint Francis Gugen as a director of the Company;

(10) appoint Andrew Austin as a director of the Company;

(11) appoint Brent Cheshire as a director of the Company;

(12) change the name of the Company to Island Gas Resources Plc;

(13) adopt New Articles of Association of the Company;

(14) authorise the Company to make o¡-market purchases to buy in the outstanding Deferred Shares; and

(15) approve a reduction of capital to relieve the existing de¢cit on pro¢t and loss account against sharepremium account.

EGM Resolutions (1), (2), (3), (4), (5), (6), (7), (9), (10) and (11) will be proposed as Ordinary Resolutionsand EGMResolutions (8), (12), (13), (14) and (15) will be proposed as Special Resolutions.

None of the Proposals will be implemented unless all of the Resolutions are passed and the AcquisitionAgreement becomes unconditional in accordance with its terms (save as to matters which involveinterconditionality).

EGM Resolution (2) will be taken on a poll of independent Shareholders and, if passed, would approve theRule 9 waiver so that the Concert Party, or Mr Gugen individually, would not be required to make a generalo¡er for the remainder of the issued share capital of the Company.

Resolution (13) is to adopt the New Articles. Recent changes to company law and practice are not re£ectedin the current Articles and the adoption of the New Articles is to address these issues. A summary of the NewArticles are set out in paragraph 6 of Part VII of this document.

The purpose of Resolution (14) is to deal with the Deferred Shares. The Deferred Shares arose as a result ofthe capital reorganisation in April 2007 which was necessary to allow the Company to issue shares at a pricewhich would have otherwise been below the nominal value of the then existing ordinary shares. This is notpermitted under the Act and accordingly a share split was a¡ected and the Deferred Shares were created. TheDeferred Shares do not carry voting rights and have no economic value, so it is now proposed to removethem from the Company’s capital by repurchasing all of them for a total price of 1p. No shareholder willsu¡er any economic disadvantage as a result and the Company will save expense of maintaining a register ofholders of Deferred Shares, which serves no purpose other than compliance with the Acts.

The purpose of Resolution (15) is to write o¡ the accumulated de¢cit on the Company’s balance againstshare premium account. The Acts prevent the payment of dividends until any historic loss on pro¢t and lossaccount is eliminated and the Company has distributable pro¢ts, the capital reduction will allow the paymentof dividends without the historic loss being eliminated out of pro¢ts and accordingly may allow dividends tobe paid sooner than would otherwise be the case.

31

Peter Redmond, Richard Armstrong and John Bryant and those shareholders connected with them willabstain from voting on Resolution (4) on the basis that they are considered interested in the outcome of thatResolution.

16. Admission, settlement and CRESTApplication will be made to the London Stock Exchange for the New Ordinary Shares resulting from theconsolidation of the Existing Ordinary Shares to be re-admitted to trading on AIM and for theConsideration Shares and New Ordinary Shares arising from the mandatory conversion of the Loan Notesto be admitted to trading on AIM. Admission to trading on AIM of the consolidated Existing OrdinaryShares and, subject to the Conditions being satis¢ed, admission of the Consideration Shares and NewOrdinary Shares arising from the mandatory conversion of the Loan Notes is expected to take place on oraround 31 December 2007.

CREST is a paperless settlement system enabling securities to be evidenced otherwise than by a certi¢cateand transferred otherwise than by written instrument. The New Articles contain provisions concerning thetransfer of shares which are consistent with the transfer of shares in dematerialised form under the CRESTRegulations. Accordingly, settlement of transactions in the New Ordinary Shares following Admission maytake place within the CREST system if Shareholders so wish. CREST is a voluntary system and holders ofNew Ordinary Shares who wish to receive and retain share certi¢cates will be able to do so.

17. Additional informationYour attention is drawn to the Risk Factors set out in Part II and to the information contained in Part VII ofthis document.

18. Action to be takenYou will ¢nd enclosed with this document a Form of Proxy for use in connection with the ExtraordinaryGeneral Meeting. Whether or not you intend to be present at the Extraordinary General Meeting, you areasked to complete the Form of Proxy in accordance with the instructions printed on it so as to be received bythe Company’s registrars, Computershare Investor Services Plc, as soon as possible but in any event not laterthan 10.00 a.m. on 21 December 2007. Completion of the Form of Proxy will not preclude you fromattending and voting in person at the meeting should you so wish.

19. RecommendationThe Existing Directors, who have been so advised by Libertas Capital Corporate Finance Limited, considerthat the Acquisition and the waiver by the Panel of the obligations which would otherwise arise for the IGLShareholders to make a general o¡er for the Company under Rule 9 of the Takeover Code, as described inparagraph 12 of this letter, are fair and reasonable and in the best interests of the Company and itsShareholders as a whole. Accordingly, the Existing Directors unanimously recommend that you vote in favourof the EGM Resolutions to be proposed at the Extraordinary General Meeting as they intend to do in respectof their own bene¢cial holdings of 9,518,500 Existing Ordinary Shares, representing approximately11.24 per cent. of the Existing Ordinary Shares (save in respect of Resolution 4 on which Peter Redmond,Richard Armstrong, John Bryant and any persons connected with them will abstain from voting on the basisthat they are considered interested in the outcome of that Resolution). In providing advice to the ExistingDirectors of the Company, Libertas Capital has taken into account the commercial assessments of theExisting Directors.

In accordance with the requirements of the Takeover Code, a poll will be taken on Resolution 2. The Boardwill make an announcement of the result of the voting on Resolution 2 as soon as practicable after theExtraordinary General Meeting.

Yours faithfully,

John BryantChairman

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PART II

RISK FACTORS

An investment in the New Ordinary Shares may not be suitable for all recipients of this document. Investorsare therefore strongly recommended to consult an investment adviser under the FSMA, who specialises inadvising on investments of this nature before making their decision to invest.

The Directors consider the following risks and other factors to be most signi¢cant for potential investors, butthe risks listed do not necessarily comprise all those associated with an investment in the New OrdinaryShares and the risks listed below are not set out in any particular order of priority. Potential investors shouldcarefully consider the risks described below before making a decision to invest in the New Ordinary Shares. Ifany of the following risks actually occur, the Enlarged Group’s business, ¢nancial condition, results or futureoperations could be materially adversely a¡ected. In such a case, the price of the New Ordinary Shares coulddecline and investors may lose all or part of their investment.

Risks relating to LiquidityLiquidity of the NewOrdinary Shares and AIM generally

An investment in the New Ordinary Shares of the Enlarged Group is highly speculative and subject to a highdegree of risk.

Application has been made for the New Ordinary Shares to be traded on AIM. AIM is a market designedprimarily for emerging or smaller companies. The rules of this market are less demanding than those of theO⁄cial List. Investments in shares traded on AIM carry a higher degree of risk than investments in sharesquoted on the O⁄cial List. Neither the London Stock Exchange nor the FSA have examined this documentfor the purposes of the Admission.

An investment in the New Ordinary Shares may be di⁄cult to realise and the price at which the NewOrdinary Shares will be traded and the price at which investors may realise their investment will bein£uenced by a large number of factors, some speci¢c to the Enlarged Group and its operations and some,which may a¡ect quoted companies generally. Admission to AIM should not be taken as implying that therewill be a liquid market for the New Ordinary Shares particularly as, on Admission, the Enlarged Group willhave a limited number of shareholders. Approximately 93 per cent. of New Ordinary Shares in the EnlargedGroup will, following Admission, be subject to lock-in arrangements which will further limit the number offreely tradable shares. The market for shares in smaller public companies, such as the Enlarged Group, is lessliquid than for larger public companies. The Enlarged Group is aiming to achieve capital growth and,therefore, New Ordinary Shares may not be suitable as a short-term investment. Consequently, the shareprice may be subject to greater £uctuation on small volumes of shares, and thus the New Ordinary Sharesmay be di⁄cult to sell at a particular price. The value of the New Ordinary Shares may go down as well asup. Investors may therefore realise less than their original investment, or sustain a total loss of theirinvestment.

Non guarantee of tax treatment

The pro¢ts of the Company and IGL are subject to UK Corporation Tax at rates of up to 30 per cent. IGL isan on-shore gas company and it will also be subject to a supplementary charge to tax (SCT), currently 20 percent., in respect of UK upstream gas pro¢ts as and when these are generated. IGL is also subject to businessrates. There is no guarantee that the current tax treatment will continue. Changes in tax treatment could havea materially adverse e¡ect on the pro¢tability of the Company.

Risks relating to the Enlarged GroupAppraisal, production and general operational risks

The business of exploration, appraisal and production of CBM involves a high degree of risk. In particular,the operations of the Enlarged Group, may be disrupted by a variety of risks and hazards which are beyondthe control of the Enlarged Group, including, but not limited to, environmental hazards, industrial accidents,occupational and health hazards, technical failures, labour disputes, unusual or unexpected rock formationsincluding lack of permeability, £ooding and extended interruptions due to inclement or hazardous weatherconditions or underground aquifers, explosions and other accidents and changes in the regulatory regimesrequiring di¡erent operational standards to be utilised with consequent cost and production rateconsequences. These risks and hazards could also result in damage to, or destruction of, production facilities,personal injury, environmental damage, business interruption, monetary losses and possible legal liability. In

33

addition there is no guarantee that appraisal activities on the Enlarged Group’s licences will lead tocommercial reserves or, if there are such reserves, that the Enlarged Group will he able to realise them asintended. If at any stage the Enlarged Group is precluded from pursuing its appraisal or productionprogrammes or decides not to continue, this is likely to have an e¡ect on the value of investors’ holdings.

The Enlarged Group will have no signi¢cant revenue from operations and its e¡orts are principally theexploration for, appraisal of and potential exploitation of CBM deposits. Most exploration and appraisalprojects do not result in commercial deposits, resulting in write-downs of capitalised expenses and losses.

The expenditures to be made by the Enlarged Group in the exploration and appraisal of its properties, asdescribed herein, may not result in commercial quantities of CBM. Exploration and appraisal failure couldhave signi¢cant negative e¡ect on the Enlarged Group, leaving it with substantially increased number ofshares outstanding and no prospects.

The properties in which the Enlarged Group has an interest are in the exploration and appraisal stage onlyand are without proven commercial reserves of CBM. Interests on which gas reserves are not commercialmay be sold or disposed of causing the Enlarged Group to write-down or write-o¡ each respective interest,thus sustaining a loss. Even if commercial proven reserves are con¢rmed, it could be years before substantialrevenue are generated, if ever.

Routes to market for the gas produced from the companies assets are developing, however the regulatoryregime is not always clear. Applications to connect to the local gas transmission system or local electricitygenerating network can be time consuming and required re-enforcement can be expensive and at timesprohibitively so.

Although the Enlarged Group maintains and proposes to maintain insurance which it considers to beappropriate in accordance with industry practice, there may be circumstances where the Enlarged Group’sinsurance will not cover or be adequate to cover the consequences of the events set out in the aboveparagraph or where it may become liable for pollution or other operational hazards against which it eithercannot insure or may have elected not to have insured on account of high premium costs or otherwise.Moreover, there can be no assurance that it will be able to maintain adequate insurance in the future at ratesit considers reasonable.

Estimates of resources

The GIIP data included in this document and in the Competent Person’s Report are estimates. Suchestimates are expressions of judgement based on knowledge, experience and industry practice. They aretherefore imprecise and dependent to some extent on interpretations, which may prove to be inaccurate.

Nothing in this document expresses any view or is intended to express any view regarding either recoverableresources or recoverable reserves and no statement should be taken as making any suggestions or o¡eringany guidance as to what, if any, these might eventually be concluded to be. There can be no assurance at thisstage of development of the Licences that the Enlarged Group will ever successfully be able to recogniserecoverable resources and or reserves from the currently estimated GIIP or that that amounts will besu⁄cient or of the right quality, and subject to adequate permeability for the Enlarged Group to be able toproduce gas commercially. Should the Enlarged Group fail to be able to recognise recoverable resources andreserves the Enlarged Group would have to recognise losses and might have to cease of operations.

Licences

The Enlarged Group’s activities are dependent upon the entering or grant and maintenance of appropriatecontracts, licences, concessions, leases, permits and regulatory consents (‘‘Authorisations’’) which may notbe entered into, granted or may be terminated, withdrawn or made subject to limitations. Although theEnlarged Group believes that the Authorisations will be renewed following expiry or entered into, granted(as the case may be), there can be no assurance that such Authorisations will be renewed, entered or grantedor as to the terms of such grants, contracts or renewals.

Authorisations, particularly onshore, are or may be subject to agreements with the proprietors of the landand both on and o¡shore are or may also relate, inter alia, to government or government agency licences,permits and if such agreements are terminated, found void or otherwise challenged, or cannot be put in place,the Enlarged Group may su¡er signi¢cant damage through the loss of the opportunity to identify and extractCBM.

34

Reliance on operating agreement with Nexen

The Enlarged Group’s day-to-day operations of exploration, appraisal and development are performed byNexen by way of formal joint operating agreements (‘‘JOA’’). The Enlarged Group does not have theresources or technical ability to carry out operations and development functions on its own.

Nexen, as operator, is in day to day control of the amount of money spent on operations. However, underthe JOAs no material amounts may be expended, except in an emergency, without the prior approval of theEnlarged Group. Under the Carried Interest Agreements between Nexen and IGL, Nexen has agreed to bearand pay IGL’s 20-50 per cent. share of the costs in relation to operations across the Licences. Nexen’sobligations under the Carry Agreements are subject to approved budgets and are limited to payments of upto »5.75 million, IGL’s share, which equates to an aggregate investment across all Licences of up to»26.5 million, Under the Carry Agreements, no interest will accrue against IGL until commercial productioncommences, when IGL may be required, in certain circumstances and on a PEDL by PEDL basis, to repaycarried costs and interest arising post commencement of production. Nexen is not obliged to bear the cost ofIGL’s percentage interest share in the projects once expenditure exceeds »5.75 million, IGL share. In theevent that the carried amount of »5.75 million is exceeded, IGL will be liable for its share of the costs andexpenses of the operations in accordance with its percentage interest in the licence on which expenditure isincurred. There is no guarantee that the Enlarged Group will have the funds available to bear such costs northat the Enlarged Group would be able to raise additional funding. This may have an adverse e¡ect onprojects then under development. This may prevent the Enlarged Group from progressing certain projects atall.

Under the terms of the Licences any ¢nancial obligations incurred thereunder are incurred jointly andseverally as between Nexen and IGL. Such obligations can include work obligations, although for thepresent Licences these obligations are all drill or drop or conditional and so can be avoided by surrender ofthe relevant licence, but may include for example other obligations such as any commitments under future¢eld development plans or certain costs of making good. Should Nexen fail to meet its obligations under anyof the Licences then IGL would be required to meet not only its share of costs but also those of Nexen. TheEnlarged Group might not have su⁄cient funds to meet such obligations nor any prospect of raising suchfunds.

Environmental and planning

The Enlarged Group is exposed to environmental risks given the nature of its operations and anenvironmental situation could arise in the future which could a¡ect the Enlarged Group’s pro¢tability and itsability to pay dividends.

Environmental and safety legislation may change in a manner that may require stricter or additionalstandards than those now in e¡ect, a heightened degree of responsibility for companies and their directorsand employees and more stringent enforcement of existing laws and regulations.

Whilst certain planning authorities currently appear supportive of the type of projects being pursued by theEnlarged Group when considering the grant of planning permission for such projects there can be noguarantee that as local structure plans are revised that this policy is not changed, modi¢ed or reversed andthere can be no assurance that planning might ever be obtained in those areas where authorities are currentlyless supportive. The planning permission process involves local consultation and projects can be opposed,either individually or on a general basis, at the planning level, by national or local pressure groups, as hasbeen the case in certain areas of the countryside in respect of CBM projects in the past; opposition to projectscould lead to the Enlarged Group being involved in appeals or public enquiries where costs could bepotentially large and the ultimate outcome uncertain including failure ever to obtain the permissionsnecessary to pursue CBM or if granted to enable CBM to be pursued economically. Safety concerns may alsoresult in delays in obtaining planning permission or in conditions being imposed and costs being increasedpotentially to a level where operations are rendered uneconomic.

The expense of meeting environmental regulations could cause a signi¢cantly negative e¡ect on pro¢tabilityof the Enlarged Group as could failure to obtain certain necessary environmental permits.

The current and anticipated future operations of the Enlarged Group, including further exploration,appraisal, development, production and ultimately decommissioning activities require permits from variousnational and local governmental authorities. Such operations are subject to a substantial body of laws andregulations governing land use, the protection of the environment, production, taxes, labour standards,occupational health, waste disposal, toxic substances, mine safety and other matters.

35

The permits that the Enlarged Group may require for construction of CBM facilities and conduct of CBMoperations must be obtainable on reasonable terms to the Enlarged Group. Unfavourable amendments tocurrent laws, regulations and permits governing operations and activities of CBM companies, or morestringent implementation thereof, could have a materially adverse impact on the Enlarged Group and causeincreases in capital expenditures which could result in a cessation of operations by the Enlarged Group.

Failure to comply with applicable laws, regulations and permitting requirements may result in enforcementactions thereunder, including orders issued by regulatory or judicial authorities causing operations to ceaseor be curtailed, and may include corrective measures requiring capital expenditures, installation of additionalequipment or remedial actions. Parties engaged in gas operations may be required to compensate thosesu¡ering loss or damage by reason of the gas activities and may have civil or criminal ¢nes or penaltiesimposed for violation of applicable laws or regulations.

The government extensively regulates the Enlarged Group’s operations, which imposes signi¢cant costs onthe Enlarged Group, and future regulations could increase those costs or limit its ability to produce CBM.

The Enlarged Group is subject to extensive regulations with respect to matters such as but not only:

(a) employee health and safety;

(b) permitting and licensing requirements;

(c) air quality standards;

(d) water quality standards;

(e) plant and wildlife protection;

(f) reclamation/restoration of CBM properties after production completed;

(g) discharge of materials into the environment, including, inter alia, water disposal and gas £aring andventing;

(h) surface subsidence from underground CBM production; and

(i) the e¡ects of CBM operations on groundwater quality and availability.

Numerous permits and approvals are required for gas operations. The Enlarged Group is required toprepare and present to national and local authorities data pertaining to the e¡ect or impact that anyproposed exploration and appraisal for or production of CBM may have upon the environment. The costs,liabilities and requirements associated with these regulations may be costly and time-consuming and maydelay commencement or continuation of exploration, appraisal or production operations. The possibilityexists that new legislation, regulations and orders may be adopted that may materially adversely a¡ect theEnlarged Group’s operations and its cost structure. New legislation or administrative regulations (or judicialinterpretations of existing laws and regulations), including proposals related to the protection of theenvironment, that would further regulate and tax the industry may also require the Enlarged Group or itscustomers to change operations signi¢cantly or incur increased costs.

Volatility of energy prices

The pro¢tability of the Enlarged Group’s operations will be dependent, inter alia, upon the market prices ofgas, gas storage and electricity which have £uctuated in the past. Gas, gas storage and electricity prices area¡ected by numerous factors beyond the control of the Enlarged Group, including international economicand political conditions, levels of supply and demand which are impacted severely by weather, the discoveryand or production of other gas opportunities and currency exchange rates. Movements in market pricescould render uneconomic any of the extraction, production or storage activities undertaken or to beundertaken.

Capital intensive nature of the projects

All of the projects which the Enlarged Group intends to develop are highly capital intensive. Whilst theEnlarged Group will have obtained funding for its short term development and roll-out programme onAdmission, the funding then available to it will not allow it to complete some of the projects or to commenceothers. It is anticipated that additional debt and/or equity funding will be sought in 2008. There can be noguarantee that the Group will be able to raise the additional funding, which may have an adverse e¡ect onprojects then under development. In addition, the costs of any of the projects may overrun those estimated bythe Directors or the projects may be delayed. Any of these events may prevent the Enlarged Group fromprogressing certain projects at all.

36

Competition

The Enlarged Group competes with other companies which have similar operations, and many suchcompetitor companies have operations and ¢nancial resources and industry experience far greater than thoseof the Enlarged Group. Nevertheless, the market for the Enlarged Group’s potential future production ofCBM tends to be commodity-oriented rather than Enlarged Group-oriented. If it successfully reachescommercial production, the Enlarged Group will still be subject to competition from much larger and¢nancially stronger competitors and such competition may materially adversely a¡ect the Enlarged Group’s¢nancial performance.

Geological and other technical risks

The Enlarged Group depends upon the results of surveys and assessments. In the event that a survey provedto be incorrect in its ¢ndings or the actual geology of a site turned out to be signi¢cantly di¡erent toexpectations, this could render the proposed project or reservoir unviable.

Key personnel

In order to develop, support and maintain the business, the Enlarged Group must recruit and retain highlyskilled employees with particular expertise. The implementation of the Enlarged Group’s strategic businessplans could be undermined by a failure to recruit or retain key personnel, the unexpected loss of key senioremployees, failures in the Enlarged Group’s succession planning, or a failure to invest in the development ofkey skills. Additionally, unless skills are supported by a su⁄cient infrastructure to enable knowledge andskills to be passed on, the Enlarged Group risks losing accumulated knowledge if key employees leave theEnlarged Group.

Litigation

The Enlarged Group faces the risk of litigation in connection with the business. In general, liability forlitigation is di⁄cult to assess or quantify; recovery may be sought for very large and/or indeterminateamounts and the existence and magnitude of liability may remain unknown for substantial periods of time.Although the Enlarged Group is not party to any material litigation at present, substantial legal liability inthe future could have a material adverse e¡ect on its business, results of operations and/or ¢nancialcondition.

Director Indemni¢cation

The New Articles contain provisions indemnifying its o⁄cers and directors against all costs, charges andexpenses incurred by them, which could interfere with shareholders successfully suing the Enlarged Group.

The New Articles contain provisions that state, subject to applicable law, the Enlarged Group shallindemnify every director or o⁄cer of the Enlarged Group, subject to the limitations of the Companies Acts,against all losses or liabilities that a company’s director or o⁄cer may sustain or incur in the execution oftheir duties. The New Articles further state that no director of o⁄cer shall be liable for any loss, damage ormisfortune that may happen to, or be incurred by the Enlarged Group in the execution of their duties if theyacted honestly and in good faith with a view to the best interests of the Enlarged Group. Such limitations onliability may reduce the likelihood of litigation against the Enlarged Group’s o⁄cers and directors and maydiscourage or deter its shareholders from suing the Enlarged Group’s o⁄cers and directors based uponbreaches of their duties to the Enlarged Group, though such an action, if successful, might otherwise bene¢tthe Enlarged Group and its shareholders.

Increase in drilling costs and the availability of drilling equipment

The oil and gas industry has historically experienced periods of rapid cost increases. Increases in the costs ofappraisal and development would a¡ect the Enlarged Group’s ability to invest in prospects and to purchaseor hire equipment, supplies and services. The availability of drilling rigs and other equipment will be a¡ectedby the scale and scope of drilling activities taking place on-shore across the UK and Europe. An increase indrilling operations may reduce the availability of equipment and services to the Enlarged Group. Thisreduced availability may delay its work programme and adversely a¡ect the Enlarged Group’s operation andpro¢tability.

Nexen’s option not to renew activity under the joint operating agreements

Nexen has the option at any time to cease operations and/or to decide to cease incurring further expenditureon the Licences and/or to decide to surrender their acreage in whole or in part, except that Nexen is obligedto execute any programme that is the subject of a budget and Authorisation for Expenditure (AFE). Nexen

37

has expressed its intention to continue operations and has put forward budgets for 2008 by the due date,which require to be approved in December 2007 and the directors of IGL are not aware of any reason whyNexen would not wish to continue operations under the Licences and the JOAs. However, were Nexen tocease operations in accordance with the provisions of the JOAs, by, for example, not approving any furtherprogrammes and budgets, the Enlarged Group would secure only reduced bene¢ts or may cease to secure anyfurther bene¢ts at all from the Carry Agreements This may have an adverse e¡ect on future projects and onthe proper exploration and/or appraisal and/or development and/or production under the Licences andwould have adverse ¢nancial consequences for the Enlarged Group. If Nexen were to surrender all its licenceinterests the Enlarged Group would have the option of taking up Nexen’s interests.

38

PART III

COMPETENT PERSON’S REPORT

39

COMPETENT PERSON’S REPORT CERTAIN COAL BED METHANE PROPERTIES LICENCED BY ISLAND GAS LTD

Project Number: P0561 PREPARED FOR: Island Gas Ltd, KP Renewables plc

BY: Equipoise Solutions Ltd

November 2007

Island_Gas_CPR_Rev1_client_relea1 1 9/11/07 19:13:31

and Libertas Capital Corporate Finance Limited

40

Author: Adam Law

Approved by: Don Scott

Date released to client: 26th October 2007

Final report approved: 31st October 2007

Revision 1 released to client: 7th November 2007

Final report approved with revisions:

Equipoise Solutions Ltd has made every effort to ensure that the interpretations, conclusions and recommendations presented herein are accurate and reliable in accordance with good industry practice. Equipoise Solutions Ltd does not, however, guarantee the correctness of any such interpretations and shall not be liable or responsible for any loss, costs, damages or expenses incurred or sustained by anyone resulting from any interpretation or recommendation made by any of its officers, agents or employees.

Island_Gas_CPR_Rev1_client_relea2 2 9/11/07 19:13:31

11th November 2007

41

Equipoise Solutions Limited, 3A Rathbone Square, 28 Tanfield Road, Croydon, CR0 1BT, UK

Tel: +44 (0) 20 8240 4459 Fax: +44 (0) 20 8240 4493 www.equipoise.co.uk Registered England No. 3807074 Registered Office Eastbourne House, 2 Saxbys Lane, Lingfield, Surrey RH7 6DN

The Directors Island Gas Limited Suite 407 International House 1 Yarmouth Place London W1J 7BU

The Directors KP Renewables plc 7th Floor Aldermary House 10-15 Queen Street London EC4N 1TX

Libertas Capital Corporate Finance Limited 16 Berkeley Street London W1J 8DZ

7th November 2007

Dear Sirs

RE: Evaluation of the Coal Bed Methane Interests of Island Gas Limited

In response to your request, Equipoise Solutions Limited (Equipoise) has reviewed certain Coal Bed Methane (CBM) interests held by Island Gas Limited (IGL), onshore and offshore UK. The properties are summarised in Section 1 of this Report.

We were requested to provide an independent estimation of the Gas Initially in Place (GIIP) for each of the assets we reviewed, in accordance with industry standard practice for the estimation of CBM GIIP. The results of this work have been presented in accordance with the requirements of the Alternative Investment Market of the London Stock Exchange, in particular as described in the “Guidance Note for Mining, Oil and Gas Companies”, March 2006. As no estimates of reserve or resource were made, we have not undertaken an independent economic evaluation of these interests.

In conducting this review, we have utilised information and interpretations supplied directly or indirectly by independent third parties, the Licence Operators, and IGL, comprising primary subsurface information, such as borehole data, and technical reports. We have reviewed the information provided, before undertaking our own independent estimates of GIIP. Site visits were not considered necessary for the purposes of this report, and we have not verified the entitlement of IGL to the interests stated in this report, as this entitlement was independently verified by the Company's

Island_Gas_CPR_Rev1_client_relea3 3 9/11/07 19:13:31

legal advisers.

42

Equipoise Solutions Limited, 3A Rathbone Square, 28 Tanfield Road, Croydon, CR0 1BT, UK

Tel: +44 (0) 20 8240 4459 Fax: +44 (0) 20 8240 4493 www.equipoise.co.uk Registered England No. 3807074 Registered Office Eastbourne House, 2 Saxbys Lane, Lingfield, Surrey RH7 6DN

Professional Qualifications

Equipoise is a privately owned independent consulting company established in 1998 with offices in South London. The company specialises in petroleum geology and geophysics. Except for the provision of professional services on a fee basis, Equipoise has no commercial arrangement with any other person or company involved in the interests which are the subject of this report.

The work has been supervised by Dr. Adam Law, Director of Equipoise, a post-graduate in Geology and a Fellow of the Geological Society of London. He has 14 years experience in the evaluation of oil and gas fields and acreage. Mr. Donald Alastair Scott has reviewed and approved these estimates. Mr. Scott is a Director of Equipoise, and has over 30 years experience in the evaluation of oil and gas fields and acreage.

Yours faithfully,

Don Scott Director, Equipoise Solutions Ltd

Island_Gas_CPR_Rev1_client_relea4 4 9/11/07 19:13:31

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Competent Person’s Report: Island Gas Ltd

Executive Summary

In response to your request, Equipoise Solutions Limited (Equipoise) has reviewed certain Coal Bed Methane (CBM) interests held by Island Gas Limited (IGL), onshore and offshore UK. These include a 20% non-operated interest in Petroleum Exploration and Development Licences (PEDL) 40-1, 56-1 (collectively ‘Swallowcroft’), PEDL 92-1 (‘Drax’), 145 (‘Four Oaks’), 78-1 and 115-1 (‘Greater Swallowcroft’). IGL also have a 50% non-operated interest in PEDL 107, and offshore Licences 110/18 (part), 110/19 (part) and 110/23 (part) – collectively ‘Point of Ayr’. We have not evaluated PEDL 115-2 and 116, where IGL have a 20% non-operating interest. All the evaluated licences are Operated by Nexen Petroleum (UK) Limited, a wholly owned subsidiary of Nexen inc (‘Nexen’). A summary of the interests reviewed, and their associated work commitments, is given in Table 1.1 of this report.

All licences have been acquired for the purposes of exploration for Coal Bed Methane gas resources within coals of the Westphalian A and B Groups, which are Carboniferous in Age. Carboniferous coals form the bulk of the mined coal strata in the UK. Thus, significant coal resource exploration has occurred in many of the licences in Table 1.1, and areas within or adjacent to the licences in Table 1.1 have been historically mined for this coal resource. A large database has resulted from this activity, which was available to us for our analysis.

Nexen and IGL have an ongoing work programme to discharge the above licence obligations and to determine the viability of CBM production in the licences themselves. As of 31/9/07, this had included the drilling of Well Doe Green-1 and Doe Green-2 within PEDL 145, and the completion of drilling activity on PEDL 92-1 (Well Mill Farm-1). Well Doe Green-2 is currently under long-term production testing.

IGL recognise that land access and approvals are essential to progress their current envisaged work programme. IGL have a number of sites identified for CBM drilling. Of these, as of 30/9/07 the Doe Green site on PEDL 145 and the Mill Farm site on PEDL 98-1 have all permissions and relevant leases in place. Applications have been submitted for one site within PEDL 107 and PEDL 78-1, but at the time of writing planning permission had not been awarded. As of 30/9/07, sites in PEDL 56-1 and PEDL 115-1 are currently in the lease negotiation stage, or have planning applications pending.

Coal bed methane can be seen as a non-conventional hydrocarbon resource. In conventional oil and gas reservoirs, hydrocarbons are reservoired within the pore spaces of the rock. As hydrocarbons are more buoyant than the surrounding formation water, some form of structural or stratigraphic trap is required to prevent the hydrocarbons from leaking to surface. However, within coals, the associated methane is chemically bound within the strata themselves, via a process known as adsorbtion. It is important to note that as a result, geological structures play no role in the accumulation of coal bed methane.

Our estimates of GIIP follow industry standard practice, and are discussed in detail in Section 1 of this report. We have made three deterministic estimates for each of the licences, as low, mid and high, based on depth, area, gas content and coal thickness variations. Where coal strata have not been proved by drilling or mining over part or all of a licence, we have applied a risk factor to our calculations as an estimate of the chance of coals being absent, or falling outside the cut-off ranges used for our GIIP calculation. Our final estimates are summarised in Table 1.2 of this report.

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Table of Contents

1. Introduction......................................................................................................................... 31.1. Comparison of CBM and Conventional Oil and Gas Reservoirs ................................... 41.2. Evaluation Methodology................................................................................................. 6

1.2.1. Available Data............................................................................................................ 61.2.2. Estimation of Gas Content......................................................................................... 61.2.3. GIIP Estimation .......................................................................................................... 9

2. Swallowcroft: PEDL 40-1 and 56-1 .................................................................................. 122.1. Database and GIIP Estimation..................................................................................... 13

3. Four Oaks: PEDL 145 ...................................................................................................... 153.1. Database and GIIP Estimation..................................................................................... 16

4. PEDL 92-1: Drax .............................................................................................................. 184.1. Database and GIIP Estimation..................................................................................... 19

5. PEDL 107 and Offshore Exploration Blocks 110/18,19 and 23: Point of Ayr................... 215.1. Database and GIIP Estimation..................................................................................... 22

6. PEDL 78-1: Greater Swallowcroft .................................................................................... 266.1. Database and GIIP Estimation..................................................................................... 27

7. PEDL 115-1: Greater Swallowcroft .................................................................................. 297.1. Database and GIIP Estimation..................................................................................... 29

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1. Introduction

In response to your request, Equipoise Solutions Limited (Equipoise) has reviewed certain Coal Bed Methane (CBM) interests held by Island Gas Limited (IGL), onshore and offshore UK. These include a 20% non-operated interest in Petroleum Exploration and Development Licences (PEDL) 40-1, 56-1 (collectively ‘Swallowcroft’), PEDL 92-1 (‘Drax’), 145 (‘Four Oaks’) and 78-1 (‘Greater Swallowcroft’). IGL also have a 50% non-operated interest in PEDL 107, and offshore Licences 110/18 (part), 110/19 (part) and 110/23 (part) – collectively ‘Point of Ayr’. Initially, we did not evaluate PEDL 115-1 when version 1 of this report was issued on 31/10/07. Since then, we have received instruction from you to evaluate this licence area. This version of the report therefore includes a Section 7 summarising the results of our estimates for PEDL 115-1. We have also updated Tables 1.1 to 1.3 of the document. We have not evaluated PEDL 115-2 or 116, where IGL have a 20% non-operating interest. All the evaluated licences are Operated by Nexen Petroleum (UK) Limited, a wholly owned subsidiary of Nexen inc (‘Nexen’).

A summary of these licences, including outstanding work commitments as of 31st September 2007, is given in Table 1.1, and summarised in Figure 1.1. Currently, all licences have the Status of Exploration, under the terms of Appendix 1 of “Guidance Note for Mining, Oil and Gas Companies”, March 2006.

Onshore Licences

Table 1.1: Summary of Licence Interests and Work Commitments, Island Gas Limited (as of 31/09/2007)

All licences have been acquired for the purposes of exploration for Coal Bed Methane gas resources within coals of the Westphalian A and B Groups, which are Carboniferous in Age (Figure1.2). The Westphalian A and B are commonly referred to as the ‘coal measures’. Carboniferous coals form the bulk of the mined coal strata in the UK. Thus, significant coal resource exploration has occurred in many of the licences in Table 1.1, and areas within or adjacent to the licences in Table 1.1 have been historically mined for this coal resource. A large historic database has resulted from this activity, which was available to us for our analysis. These data are discussed in more detail in Section 1 of this report.

Nexen and IGL have an ongoing work programme to discharge the above licence obligations and to determine the viability of CBM production in the licences themselves. As of 31/9/07, this had included the drilling of Well Doe Green-1 and Doe Green-2 within PEDL 145, and the completion of drilling activity on PEDL 92-1 (Well Mill Farm-1). Well Doe Green-1 was extensively cored through the Carboniferous coal bearing section in the well, to provide samples for the estimation of gas desorbtion for the coals. Well Doe Green-2 is currently under long-term production testing. Licence PEDL 145 has also been explored historically for CBM resources by another Operator, resulting in the drilling of Well Four Oaks-1. This vertical well failed to produce economic volumes of gas from the Carboniferous coals before it was plugged and abandoned. We are advised that

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PEDL W.I. (%) Block No. Operator Name Renewal Date Area (km2) Outstanding Licence Obligations40-1 20% SJ47 Nexen Swallowcroft 17/03/2009 45 None56-1 20% SJ84 Nexen Swallowcroft 17/03/2009 18.2 None78-1 20% SJ73 Nexen Greater Swallowcroft 07/09/2008 100 1 Drill or Drop Well145 20% SJ58 Nexen Four Oaks 30/09/2010 74 None92-1 20% SE62, SE72 Nexen Drax 07/09/2008 200 None107 50% SJ18 Nexen Point of Ayr 31/01/2008 21 1 Drill or Drop Well115-1 20% SJ82, SJ92 Nexen Greater Swallowcroft 31/01/2008 200 1 Drill or Drop Well plus lateral

Offshore Licences

Licence W.I. (%) Operator Name Renewal Date Area (km2) Outstanding Licence Obligations110/18 (part) 50% Nexen 31/03/2011 118.9110/19 (part) 50% Nexen 31/03/2011 52.4110/23 (part) 50% Nexen 31/03/2011 18.3

1 Point of Ayr contingent well

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this occurred for mechanical rather than technical reasons, due to the poor provision of pumping equipment.

Onshore oil and gas operations within the UK are subject to certain planning and environmental regulations. Furthermore, certain regulatory requirements have to be met to drill boreholes for the purposes of CBM exploration. For onshore exploration drilling, IGL require planning permission from the relevant local authority, and a Coal Authority Coal Access Agreement to specifically drill for CBM resource. In addition, further bye law consent may be required for land drainage, topsoil storage whilst the site is occupied, and water disposal. Cuttings and produced water can be shipped from site by a recognised disposal contractor. At the time of writing, successful planning applications do not require a full Environmental Impact Statement, but include noise assessment and a base line ecology survey, including protected species.

For production operations, it is envisaged that further planning permission will be required for gas evacuation and/or local power generation. Should water extraction rates rise to greater than 20m3

per day, an abstraction permit will also be required from the local water company, as well as a suitable disposal method.

Finally, a suitable lease agreement must obviously be negotiated with the land owner of the chosen site for the period of occupation.

IGL recognise that land access and approvals are essential to progress their current envisaged work programme. IGL have a number of sites identified for CBM drilling. Of these, as of 30/9/07 the Doe Green site on PEDL 145 and the Mill Farm site on PEDL 98-1 have all permissions and relevant leases in place. Applications have been submitted for one site each within PEDL 107 and PEDL 78-1, but at the time of writing planning permission had not been awarded. As of 30/9/07, sites in PEDL 56-1 and PEDL 115-1 are currently in the lease negotiation stage, or have planning applications pending.

1.1. Comparison of CBM and Conventional Oil and Gas Reservoirs

Coal bed methane can be seen as a non-conventional hydrocarbon resource. In conventional oil and gas reservoirs, hydrocarbons are generated from the thermal and pressure maturation of a suitable organic source rock, including coals. These hydrocarbons are reservoired within the pore spaces of a suitably porous and permeable rock. As hydrocarbons are more buoyant than the surrounding formation water, some form of structural or stratigraphic trap is required to prevent the hydrocarbons from leaking to surface. As a result, such traps generally form a fractional subset of the areal distribution of the prospective reservoir interval.

Within coals, the associated methane is chemically bound within the strata themselves, via a process known as adsorbtion. It is important to note that as a result, geological structures play no role in the accumulation of coal bed methane. Thus, CBM potential is governed by the extent, thickness and depth of the coal seams themselves, rather than by the areal extent of potential traps. Coals can be regionally extensive, but are generally thin relative to conventional oil and gas reservoirs. For instance, almost all the coals reviewed in this report are less than a few metres in thickness. Coals are often vertically staked, although this will depend on the basin geometry at the time of deposition. The amount of organic material within individual coal seams, where well lithified (as with most UK Carboniferous coals), is generally quite high. However, ultimate gas contents per coal seam depend on the burial history of the coals.

Adsorbed gas escapes from coals as they de-stress, for instance during the drilling or mining process. As coals are of low permeability relative to most conventional oil and gas reservoirs, a well developed fracture (cleat) network is essential for the extraction of gas at appreciable rates during de-stressing. This network can be natural, or generated/enhanced by artificial stimulation.

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Production rates from CBM wells are commonly lower than those from conventional oil and gas reservoirs.

Figure 1.1: Location of Island Gas Licences, Onshore and Offshore UK, as of 31/09/2007.

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1.2. Evaluation Methodology

Both the available data and methodology used is discussed on a licence specific basis within the following sections of this report. However, a general methodology was applied to our evaluation of GIIP, which is discussed below.

1.2.1. Available Data

Some of the IGL Licences have been licensed previously for the purposes of exploration for coal bed methane gas resources. All have been extensively explored for conventional coal resources, and in places have been mined for these resources, with the exception of PEDL 78-1, PEDL 145 south of the river Mersey (145 South), and the offshore Point of Ayr blocks 110/18 (Part) and 110/23 (Part).

A database of National Coal Board/Coal Authority (NCB/CA) exploratory boreholes, shaft records and mine working diagrams were available to us. These commonly include a log of coal thickness, coal stratigraphy, ash content and also seam gas content (where cored), corrected for gas lost before measurement began. In many cases, borehole information was available as NCB ‘petrogram’ maps per coal seam, summarising the coal thickness and ash content at each borehole location. Where possible, we have used these maps as a primary source of data, cross-referenced against borehole data wherever possible.

In the case of the mine working information, we were also able to locate areas where the Westphalian coals had already been mined, and thus are non-prospective for CBM.

No desorbtion curves were available within the NCB/CA data base available to us, and description of measurement methodology and correction for gas lost was found to be ambiguous. However, desorbtion data were available for the Doe Green-1 borehole within PEDL 145 which we were able to use to calibrate the historic NCB/CA gas content data.

Limited seismic data were available, and we have not made interpretations of geological structure between boreholes.

1.2.2. Estimation of Gas Content

There are many factors that control the gas in place within a coal seam. These include thermal history, structuration, moisture content, volatile content, coal maturation (1e.g. British Coal 1987). Where the coals are under-saturated with respect to gas content, many empirical trends can be derived. However those models are not transportable between coal fields (Freudenberg 1996). If the coals are saturated, it is be possible to establish a generic model across all coal fields based on the physical process of adsorption since the adsorbed gas can account for as much as 98% of the total gas in the coal (Harpalani & Schraufnagel 1990a,b).

Using data taken from figure 2 and 3 of Kim 1997 (see figure 1.2) we were able to define a generic model of maximum coal gas storage based on the Langmuir equation. The Langmuir equation is of the generic form:

Gas Capacity(m3/Tonne) = Vl(m3/Tonne)*Pressure(Mpa)/(Pl(MPa)+Pressure(MPa))

Vl and Pl are Langmuir volume and pressure constants.

This equation was simplified to a function of depth and Langmuir volume. Our equation assumes hydrostatic pressure of 0.4 psi/ft and a temperature gradient of 0.018 degrees Celsius per metre with a surface temperature of 11 degrees Celsius. We also expressed Langmuir Pressure as a

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function of Langmuir Volume. In this way we were able to produce a model that entirely replicates the curves shown in figure 1.2 by a single variable, Langmuir Volume which correlates to coal maturity. The equation can also be expressed as a function of depth to calibrate against core measurements.

Figure 1.2 - Gas Capacity as a function of pressure and temperature (from Kim 1997)

Core based gas desorption measurements were available from the areas studied in this report (Creedy 1992). The database included depth, methane and ethane measured in desorption and an estimate of methane expelled from the coal prior to sealing the coal sample (gas lost). There is uncertainty in the method of correction for lost gas, due to the limited nature of experimental description in the Creedy reported data. For our estimates, we have assumed that these values have been corrected for lost gas using industry standard methods.

It was noted that the gas lost estimate for the same sample varied from 30% to 60% of the measured gas depending on whether a linear or quadratic extrapolation was used when plotting gas desorped as a function of the square root of time of measurement. This, combined with a statement made by Kim (1997) that “[gas desorption measurements are]…considered accurate to +30% made us conclude that gas desorption data should be fitted through the centre of any scatter in a crossplot of total gas desorped (lost and measured) versus depth.

Although we had derived a model of total gas capacity (m3/Tonne) as a function of Langmuir volume, we needed to adjust the model to account for the moisture content and the atmospheric pressure (101Kpa) used in coal desorption measurements made by the NCB. Once this was done, we are able to define the optimum Langmuir volume for the model trend to pass through the centre of each desorption dataset (mid case trend). Figure 1.3 shows the fit for each area.

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Figure 1.3 - Application of the simplified Langmuir model for four different coalfields..

It should be noted that there is a good correspondence between Kim's figures in Figure 1.2 and the mid case model fit in Figure 1.3. For example, a Langmuir volume of 27.5 m3/Tonne models as a high volatile coal in Kim's data and corresponds to the Drax trend which is also a high volatile coal.

Establishing a low and high trend for each coal-field is non trivial; especially for Point of Ayr where only 9 points are available. If experimental errors in desorption data are expected to be at the level of 30%, the scatter in the trends above can be entirely explained in terms of experimental uncertainty. However, to provide a consistent and auditable approach, we have defined a low and high curve for each based on defining the Langmuir volume that creates a trend where 90% or 10% of the samples lie above the trend respectively. In the case of Point of Ayr, we have extrapolated these low, mid and high estimates, assuming similar error bounds. Figure 1.4 shows the resultant Langmuir volumes for each coal field along with one example of the low, mid and high trends for Swallowcroft.

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Figure 1.4 – low, mid and high Estimation of Langmuir volumes

Given that the depth trends created were based on the physical process of desoprtion of saturated coal and that the inferred Langmuir volumes correspond broadly to the coal maturity observed in each field, we conclude that the coals are likely to be saturated and that this model is a reasoned approach to provide input parameters into the final gas in place calculations.

1.2.3. GIIP Estimation

We have applied industry standard methods to calculate coal bed methane GIIP for the above Licences (e.g. Scott et al 1995), using the equation below

GIIP = (h.A).d.GC

Where: h = coal thickness, A = area of prospect, d = coal density and GC = ash free gas content

As we have established that NCB/CA gas content measurements are on an ash free basis, we have not corrected for ash content of the coals. To convert our coal volume estimate to tonnage, we have used a constant coal density of 1.28 g/cm3, established from regional NCB/CA analysis.

For each area we have tabulated coal depth, thickness, and gas content (borehole or lab measured, where available) for each of the correlateable coals in each available borehole. We have also tabulated measured borehole gas against depth, (methane and ethane combined), and have used this to derive both relationships for the increase in total gas content with depth for each area, and also gas contents for coal where not recorded. These measurements could be calibrated to sea level datum in the Swallowcroft area – necessary as the area has significant topography. Few borehole elevation data were available in Four Oaks (North), Drax and Point of Ayr to undertake the same calculation. However, these areas are relatively flat, and the impact of topography on our calculations was found to be minor.

We initially calculated GIIP for methane and ethane combined on a layer average basis, taking the average depth, thickness, ash content and measured gas content for each logged coal over the study area. Where borehole coverage is sufficient, we have also undertaken a grid based estimation, extrapolating coal thickness and depth for all logged and named coals between boreholes across each licence area. Where it was possible to undertake both grid and layer average estimates, we have chosen the former as being the more accurate method of estimation.

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We have adopted other methods where borehole data are sparse or unavailable, using other geological information, such as maps of Solid Geology published by the British Geological Survey (BGS). These methods are described in detail in the appropriate section.

Due to the lack of seismic data available, we have not made interpretations of geological structure between the available borehole data. Our resulting estimates therefore alias geological structure within the licences. Account should be taken of this for borehole specific studies, such as drainage area per well, but the methodology adopted here is acceptable relative to the subsurface uncertainties currently present.

We have undertaken our estimates of GIIP on a deterministic basis, making three estimates: low, mid and high case, with our cases defined as follows:

Onshore Licences, Deterministic Cases

Low Case: all correlatable logged coals with a thickness of 1m or greater, (i.e. accessible by well established drilling technology) above a maximum depth of 5,000’ or approximately 1,525m (approximately the deepest borehole penetration within each licence), and with our low estimates of gas content with depth using the Langmuir equation.

Mid Case: all correlatable logged coals with a thickness of 60cm (2’) or greater (i.e. accessible by the in-seam drilling technology being utilised by IGL), to a depth of 5000’ or approximately 1,525m (approximately the deepest borehole penetration within each licence), and with the average of the recorded gas content for that seam, or an estimate derived from our mid estimate of gas content with depth using the Langmuir equation.

High Case: all correlatable logged coals, irrespective of thickness, plus an estimate of additional coal that remained un-named in the available borehole data, to a maximum depth of 6,500’ or approximately 2,000m (the current maximum estimated commercial depth as advised by Nexen), and with our high case estimate of gas content using the Langmuir equation.

In all cases, the minimum evaluated depth was 200’, although this was only applicable in the Point of Ayr onshore PEDL 107.

In addition, we have applied a drilling radius cut-off for the Point of Ayr offshore licences as follows:

Point of Ayr Offshore, Deterministic Cases

Low case: All correlatable logged coals coals with a thickness of 1m or greater, (i.e. accessible by well established drilling technology) above a maximum depth of 5,000’ or approximately 1,525m (approximately the deepest borehole penetration within each licence), within a 3,000mradius of the coastline (the current extent of available borehole data), with our low estimates of gas content with depth using the Langmuir equation.

Mid Case: all correlatable logged coals with a thickness of 60cm (2’) or greater (i.e. accessible by the in-seam drilling technology being utilised by IGL), to a depth of 5000’ or approximately 1,525m (approximately the deepest borehole penetration within each licence), within a 4,000m radius of the coastline (Nexen assumed maximum distance that can be reached from an onshore site), and with the average of the recorded gas content for that seam, or an estimate derived from our mid estimate of gas content with depth using the Langmuir equation.

High Case: all correlatable logged coals, irrespective of thickness, plus an estimate of additional coal that remained un-named in the available borehole data, to a maximum depth of 6,500’ or approximately 2,000m (the current maximum estimated commercial depth as advised by Nexen),

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over the entire area of the offshore blocks where coals are likely to occur, and with our high case estimate of gas content using the Langmuir equation.

Where we have used additional constraints, we have included further discussion in the relevant section of this report. Some areas reviewed do not have the presence and thickness of the Westphalian coal measures established by borehole data. Where this is the case, we have applied an appropriate geological risk factor to our estimates.

Our final low, mid and high GIIP estimates are tabulated below.

Table 1.2: Low, mid and high estimates of GIIP (gross per licence and Net to IGL) for the IGL properties reviewed in this report, as per Appendix 3, of “Guidance Note for Mining, Oil and Gas Companies”, March 2006. For avoidance of doubt, all numbers are unrisked.

Table 1.3: Low, Mid and High net risked GIIP for the IGL properties reviewed in this report.

(all figures in Bcf) Gross Net Risk OperatorArea Low Mid High Low Mid High FactorPEDL 40-1 and PEDL 56-1 563 854 1,326 113 171 265 - NexenPEDL 145 (N of Mersey) 116 181 299 23 36 60 - NexenPEDL 145 (S of Mersey) 99 444 803 20 89 161 80% NexenPEDL 92-1 383 652 1,134 77 130 227 - NexenPoint of Ayr Onshore (PEDL 107) 2 4 10 1 2 5 - NexenPoint of Ayr Offshore (110/19 Part) 87 162 1,141 43 81 571 - NexenPoint of Ayr Offshore (110/18 Part and 110/23 Part) 120 508 4,340 60 254 2,170 80% NexenPEDL 78-1 309 874 1,794 62 175 359 50% NexenPEDL 115-1 B (west) 226 832 1,923 45 166 385 50% NexenPEDL 115-1 A (east) 106 138 361 21 28 72 - NexenTOTAL GIIP (Bcf) 2,011 4,649 13,132 465 1,132 4,274

(all figures in Bcf) NET RISKED GIIPArea Low Mid HighPEDL 40-1 and PEDL 56-1 113 171 265PEDL 145 (N of Mersey) 23 36 60PEDL 145 (S of Mersey) 16 71 128PEDL 92-1 77 130 227Point of Ayr Onshore (PEDL 107) 1 2 5Point of Ayr Offshore (110/19 Part) 43 81 571Point of Ayr Offshore (110/18 Part and 110/23 Part) 48 203 1,736PEDL 78-1 31 87 179PEDL 115-1 B (west) 23 83 192PEDL 115-1 A (east) 21 28 72TOTAL GIIP (Bcf) 395 893 3,436

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2. Swallowcroft: PEDL 40-1 and 56-1

PEDL 40-1 and 56-1 lie to the north west of the City of Birmingham, within the county of Staffordshire, onshore UK (Figure 2.1). The currently licensed area lies immediately to the south west of the town of Newcastle-Under-Lyme. The licences surround an area of extensive mine workings, although mining activity has now ceased. As far as we can ascertain, the mined areas fall outside the licensed area (Figure 2.1).

The licences PEDL 40 and PEDL 56 were originally acquired by Midlands Mining Holdings Limited on 21st July 1998. Following several reassignments and part relinquishment, title and 100% equity was obtained in PEDL 40-1 and PEDL 56-1 by IGL via execution of an option of assignment by StrataGas plc on 11th February 2005. The licences have undergone two extensions of the first term, and are now in the second term, which currently expires on 17th March 2009. Operatorship and 80% of the equity in PEDL 40-1 and PEDL 56-1 were assigned to Nexen on 9th December 2005. The current licensed area and the UK onshore grid blocks that form PEDL 40-1 and PEDL 56-1 are summarised in Table 1.1 of this document.

Geologically, the area is formed by a series of open, westward plunging anticlines and synclines, outcropping rocks of Triassic to Carboniferous Age at surface, with the Carboniferous Westphalian Coal Measures sequence outcropping to the north of the licences. A large fault, the Wem Fault, downthrows Carboniferous strata to the westerly edge of the licences. Although quantification of this throw is difficult, estimates place it at more than 1km, making the Carboniferous strata too deep for CBM exploration at present.

Mining in the area focussed on Westphalian A and B coals at depths of approximately 0m to 1500m below surface. Although the area has been licensed historically for CBM exploration, no boreholes have been drilled on the licence for this purpose.

Figure 2.1: Location map: PEDL 40-1, 56-1 (Swallowcroft), including location of mine workings, borehole data, and the position of the Wem Fault.

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UK_BARKERS_W OODUK_BARKERS_W OODUK_BARKERS_W OODUK_BARKERS_W OODUK_BARKERS_W OODUK_BARKERS_W OODUK_BARKERS_W OODUK_BARKERS_W OODUK_BARKERS_W OODUK_BARKERS_W OODUK_BARKERS_W OODUK_BARKERS_W OODUK_BARKERS_W OODUK_BARKERS_W OODUK_BARKERS_W OODUK_BARKERS_W OODUK_BARKERS_W OODUK_BARKERS_W OODUK_BARKERS_W OODUK_BARKERS_W OODUK_BARKERS_W OODUK_BARKERS_W OODUK_BARKERS_W OODUK_BARKERS_W OODUK_BARKERS_W OOD

UK_BEARS_1UK_BEARS_1UK_BEARS_1UK_BEARS_1UK_BEARS_1UK_BEARS_1UK_BEARS_1UK_BEARS_1UK_BEARS_1UK_BEARS_1UK_BEARS_1UK_BEARS_1UK_BEARS_1UK_BEARS_1UK_BEARS_1UK_BEARS_1UK_BEARS_1UK_BEARS_1UK_BEARS_1UK_BEARS_1UK_BEARS_1UK_BEARS_1UK_BEARS_1UK_BEARS_1UK_BEARS_1

UK_BEARS_2UK_BEARS_2UK_BEARS_2UK_BEARS_2UK_BEARS_2UK_BEARS_2UK_BEARS_2UK_BEARS_2UK_BEARS_2UK_BEARS_2UK_BEARS_2UK_BEARS_2UK_BEARS_2UK_BEARS_2UK_BEARS_2UK_BEARS_2UK_BEARS_2UK_BEARS_2UK_BEARS_2UK_BEARS_2UK_BEARS_2UK_BEARS_2UK_BEARS_2UK_BEARS_2UK_BEARS_2UK_BIRCHUK_BIRCHUK_BIRCHUK_BIRCHUK_BIRCHUK_BIRCHUK_BIRCHUK_BIRCHUK_BIRCHUK_BIRCHUK_BIRCHUK_BIRCHUK_BIRCHUK_BIRCHUK_BIRCHUK_BIRCHUK_BIRCHUK_BIRCHUK_BIRCHUK_BIRCHUK_BIRCHUK_BIRCHUK_BIRCHUK_BIRCHUK_BIRCH

UK_BITTERNSUK_BITTERNSUK_BITTERNSUK_BITTERNSUK_BITTERNSUK_BITTERNSUK_BITTERNSUK_BITTERNSUK_BITTERNSUK_BITTERNSUK_BITTERNSUK_BITTERNSUK_BITTERNSUK_BITTERNSUK_BITTERNSUK_BITTERNSUK_BITTERNSUK_BITTERNSUK_BITTERNSUK_BITTERNSUK_BITTERNSUK_BITTERNSUK_BITTERNSUK_BITTERNSUK_BITTERNSUK_BLACK_BOGUK_BLACK_BOGUK_BLACK_BOGUK_BLACK_BOGUK_BLACK_BOGUK_BLACK_BOGUK_BLACK_BOGUK_BLACK_BOGUK_BLACK_BOGUK_BLACK_BOGUK_BLACK_BOGUK_BLACK_BOGUK_BLACK_BOGUK_BLACK_BOGUK_BLACK_BOGUK_BLACK_BOGUK_BLACK_BOGUK_BLACK_BOGUK_BLACK_BOGUK_BLACK_BOGUK_BLACK_BOGUK_BLACK_BOGUK_BLACK_BOGUK_BLACK_BOGUK_BLACK_BOG

UK_BOW SEY_W OODUK_BOW SEY_W OODUK_BOW SEY_W OODUK_BOW SEY_W OODUK_BOW SEY_W OODUK_BOW SEY_W OODUK_BOW SEY_W OODUK_BOW SEY_W OODUK_BOW SEY_W OODUK_BOW SEY_W OODUK_BOW SEY_W OODUK_BOW SEY_W OODUK_BOW SEY_W OODUK_BOW SEY_W OODUK_BOW SEY_W OODUK_BOW SEY_W OODUK_BOW SEY_W OODUK_BOW SEY_W OODUK_BOW SEY_W OODUK_BOW SEY_W OODUK_BOW SEY_W OODUK_BOW SEY_W OODUK_BOW SEY_W OODUK_BOW SEY_W OODUK_BOW SEY_W OOD

UK_BROMLEYUK_BROMLEYUK_BROMLEYUK_BROMLEYUK_BROMLEYUK_BROMLEYUK_BROMLEYUK_BROMLEYUK_BROMLEYUK_BROMLEYUK_BROMLEYUK_BROMLEYUK_BROMLEYUK_BROMLEYUK_BROMLEYUK_BROMLEYUK_BROMLEYUK_BROMLEYUK_BROMLEYUK_BROMLEYUK_BROMLEYUK_BROMLEYUK_BROMLEYUK_BROMLEYUK_BROMLEY

UK_CLAYTONUK_CLAYTONUK_CLAYTONUK_CLAYTONUK_CLAYTONUK_CLAYTONUK_CLAYTONUK_CLAYTONUK_CLAYTONUK_CLAYTONUK_CLAYTONUK_CLAYTONUK_CLAYTONUK_CLAYTONUK_CLAYTONUK_CLAYTONUK_CLAYTONUK_CLAYTONUK_CLAYTONUK_CLAYTONUK_CLAYTONUK_CLAYTONUK_CLAYTONUK_CLAYTONUK_CLAYTON

UK_DARDANELLESUK_DARDANELLESUK_DARDANELLESUK_DARDANELLESUK_DARDANELLESUK_DARDANELLESUK_DARDANELLESUK_DARDANELLESUK_DARDANELLESUK_DARDANELLESUK_DARDANELLESUK_DARDANELLESUK_DARDANELLESUK_DARDANELLESUK_DARDANELLESUK_DARDANELLESUK_DARDANELLESUK_DARDANELLESUK_DARDANELLESUK_DARDANELLESUK_DARDANELLESUK_DARDANELLESUK_DARDANELLESUK_DARDANELLESUK_DARDANELLES

UK_DRAYTON_ROADUK_DRAYTON_ROADUK_DRAYTON_ROADUK_DRAYTON_ROADUK_DRAYTON_ROADUK_DRAYTON_ROADUK_DRAYTON_ROADUK_DRAYTON_ROADUK_DRAYTON_ROADUK_DRAYTON_ROADUK_DRAYTON_ROADUK_DRAYTON_ROADUK_DRAYTON_ROADUK_DRAYTON_ROADUK_DRAYTON_ROADUK_DRAYTON_ROADUK_DRAYTON_ROADUK_DRAYTON_ROADUK_DRAYTON_ROADUK_DRAYTON_ROADUK_DRAYTON_ROADUK_DRAYTON_ROADUK_DRAYTON_ROADUK_DRAYTON_ROADUK_DRAYTON_ROAD

UK_FINNEY_GREENUK_FINNEY_GREENUK_FINNEY_GREENUK_FINNEY_GREENUK_FINNEY_GREENUK_FINNEY_GREENUK_FINNEY_GREENUK_FINNEY_GREENUK_FINNEY_GREENUK_FINNEY_GREENUK_FINNEY_GREENUK_FINNEY_GREENUK_FINNEY_GREENUK_FINNEY_GREENUK_FINNEY_GREENUK_FINNEY_GREENUK_FINNEY_GREENUK_FINNEY_GREENUK_FINNEY_GREENUK_FINNEY_GREENUK_FINNEY_GREENUK_FINNEY_GREENUK_FINNEY_GREENUK_FINNEY_GREENUK_FINNEY_GREEN

UK_GRANGE_W OODUK_GRANGE_W OODUK_GRANGE_W OODUK_GRANGE_W OODUK_GRANGE_W OODUK_GRANGE_W OODUK_GRANGE_W OODUK_GRANGE_W OODUK_GRANGE_W OODUK_GRANGE_W OODUK_GRANGE_W OODUK_GRANGE_W OODUK_GRANGE_W OODUK_GRANGE_W OODUK_GRANGE_W OODUK_GRANGE_W OODUK_GRANGE_W OODUK_GRANGE_W OODUK_GRANGE_W OODUK_GRANGE_W OODUK_GRANGE_W OODUK_GRANGE_W OODUK_GRANGE_W OODUK_GRANGE_W OODUK_GRANGE_W OOD

UK_HANCHURCHUK_HANCHURCHUK_HANCHURCHUK_HANCHURCHUK_HANCHURCHUK_HANCHURCHUK_HANCHURCHUK_HANCHURCHUK_HANCHURCHUK_HANCHURCHUK_HANCHURCHUK_HANCHURCHUK_HANCHURCHUK_HANCHURCHUK_HANCHURCHUK_HANCHURCHUK_HANCHURCHUK_HANCHURCHUK_HANCHURCHUK_HANCHURCHUK_HANCHURCHUK_HANCHURCHUK_HANCHURCHUK_HANCHURCHUK_HANCHURCHUK_HARGREAVESUK_HARGREAVESUK_HARGREAVESUK_HARGREAVESUK_HARGREAVESUK_HARGREAVESUK_HARGREAVESUK_HARGREAVESUK_HARGREAVESUK_HARGREAVESUK_HARGREAVESUK_HARGREAVESUK_HARGREAVESUK_HARGREAVESUK_HARGREAVESUK_HARGREAVESUK_HARGREAVESUK_HARGREAVESUK_HARGREAVESUK_HARGREAVESUK_HARGREAVESUK_HARGREAVESUK_HARGREAVESUK_HARGREAVESUK_HARGREAVES

UK_HEY_SPRINKUK_HEY_SPRINKUK_HEY_SPRINKUK_HEY_SPRINKUK_HEY_SPRINKUK_HEY_SPRINKUK_HEY_SPRINKUK_HEY_SPRINKUK_HEY_SPRINKUK_HEY_SPRINKUK_HEY_SPRINKUK_HEY_SPRINKUK_HEY_SPRINKUK_HEY_SPRINKUK_HEY_SPRINKUK_HEY_SPRINKUK_HEY_SPRINKUK_HEY_SPRINKUK_HEY_SPRINKUK_HEY_SPRINKUK_HEY_SPRINKUK_HEY_SPRINKUK_HEY_SPRINKUK_HEY_SPRINKUK_HEY_SPRINK

UK_HIGHW AYUK_HIGHW AYUK_HIGHW AYUK_HIGHW AYUK_HIGHW AYUK_HIGHW AYUK_HIGHW AYUK_HIGHW AYUK_HIGHW AYUK_HIGHW AYUK_HIGHW AYUK_HIGHW AYUK_HIGHW AYUK_HIGHW AYUK_HIGHW AYUK_HIGHW AYUK_HIGHW AYUK_HIGHW AYUK_HIGHW AYUK_HIGHW AYUK_HIGHW AYUK_HIGHW AYUK_HIGHW AYUK_HIGHW AYUK_HIGHW AY

UK_HOBGOBLINUK_HOBGOBLINUK_HOBGOBLINUK_HOBGOBLINUK_HOBGOBLINUK_HOBGOBLINUK_HOBGOBLINUK_HOBGOBLINUK_HOBGOBLINUK_HOBGOBLINUK_HOBGOBLINUK_HOBGOBLINUK_HOBGOBLINUK_HOBGOBLINUK_HOBGOBLINUK_HOBGOBLINUK_HOBGOBLINUK_HOBGOBLINUK_HOBGOBLINUK_HOBGOBLINUK_HOBGOBLINUK_HOBGOBLINUK_HOBGOBLINUK_HOBGOBLINUK_HOBGOBLIN

UK_HOME_FARMUK_HOME_FARMUK_HOME_FARMUK_HOME_FARMUK_HOME_FARMUK_HOME_FARMUK_HOME_FARMUK_HOME_FARMUK_HOME_FARMUK_HOME_FARMUK_HOME_FARMUK_HOME_FARMUK_HOME_FARMUK_HOME_FARMUK_HOME_FARMUK_HOME_FARMUK_HOME_FARMUK_HOME_FARMUK_HOME_FARMUK_HOME_FARMUK_HOME_FARMUK_HOME_FARMUK_HOME_FARMUK_HOME_FARMUK_HOME_FARM

UK_HUNGERFORDUK_HUNGERFORDUK_HUNGERFORDUK_HUNGERFORDUK_HUNGERFORDUK_HUNGERFORDUK_HUNGERFORDUK_HUNGERFORDUK_HUNGERFORDUK_HUNGERFORDUK_HUNGERFORDUK_HUNGERFORDUK_HUNGERFORDUK_HUNGERFORDUK_HUNGERFORDUK_HUNGERFORDUK_HUNGERFORDUK_HUNGERFORDUK_HUNGERFORDUK_HUNGERFORDUK_HUNGERFORDUK_HUNGERFORDUK_HUNGERFORDUK_HUNGERFORDUK_HUNGERFORD

UK_KEELE_1UK_KEELE_1UK_KEELE_1UK_KEELE_1UK_KEELE_1UK_KEELE_1UK_KEELE_1UK_KEELE_1UK_KEELE_1UK_KEELE_1UK_KEELE_1UK_KEELE_1UK_KEELE_1UK_KEELE_1UK_KEELE_1UK_KEELE_1UK_KEELE_1UK_KEELE_1UK_KEELE_1UK_KEELE_1UK_KEELE_1UK_KEELE_1UK_KEELE_1UK_KEELE_1UK_KEELE_1

UK_KINGSW OODUK_KINGSW OODUK_KINGSW OODUK_KINGSW OODUK_KINGSW OODUK_KINGSW OODUK_KINGSW OODUK_KINGSW OODUK_KINGSW OODUK_KINGSW OODUK_KINGSW OODUK_KINGSW OODUK_KINGSW OODUK_KINGSW OODUK_KINGSW OODUK_KINGSW OODUK_KINGSW OODUK_KINGSW OODUK_KINGSW OODUK_KINGSW OODUK_KINGSW OODUK_KINGSW OODUK_KINGSW OODUK_KINGSW OODUK_KINGSW OOD

UK_LITTLE_PADDOCKSUK_LITTLE_PADDOCKSUK_LITTLE_PADDOCKSUK_LITTLE_PADDOCKSUK_LITTLE_PADDOCKSUK_LITTLE_PADDOCKSUK_LITTLE_PADDOCKSUK_LITTLE_PADDOCKSUK_LITTLE_PADDOCKSUK_LITTLE_PADDOCKSUK_LITTLE_PADDOCKSUK_LITTLE_PADDOCKSUK_LITTLE_PADDOCKSUK_LITTLE_PADDOCKSUK_LITTLE_PADDOCKSUK_LITTLE_PADDOCKSUK_LITTLE_PADDOCKSUK_LITTLE_PADDOCKSUK_LITTLE_PADDOCKSUK_LITTLE_PADDOCKSUK_LITTLE_PADDOCKSUK_LITTLE_PADDOCKSUK_LITTLE_PADDOCKSUK_LITTLE_PADDOCKSUK_LITTLE_PADDOCKS

UK_LYMES_ROADUK_LYMES_ROADUK_LYMES_ROADUK_LYMES_ROADUK_LYMES_ROADUK_LYMES_ROADUK_LYMES_ROADUK_LYMES_ROADUK_LYMES_ROADUK_LYMES_ROADUK_LYMES_ROADUK_LYMES_ROADUK_LYMES_ROADUK_LYMES_ROADUK_LYMES_ROADUK_LYMES_ROADUK_LYMES_ROADUK_LYMES_ROADUK_LYMES_ROADUK_LYMES_ROADUK_LYMES_ROADUK_LYMES_ROADUK_LYMES_ROADUK_LYMES_ROADUK_LYMES_ROAD

UK_MADELEYUK_MADELEYUK_MADELEYUK_MADELEYUK_MADELEYUK_MADELEYUK_MADELEYUK_MADELEYUK_MADELEYUK_MADELEYUK_MADELEYUK_MADELEYUK_MADELEYUK_MADELEYUK_MADELEYUK_MADELEYUK_MADELEYUK_MADELEYUK_MADELEYUK_MADELEYUK_MADELEYUK_MADELEYUK_MADELEYUK_MADELEYUK_MADELEY

UK_NORTHW OOD_1UK_NORTHW OOD_1UK_NORTHW OOD_1UK_NORTHW OOD_1UK_NORTHW OOD_1UK_NORTHW OOD_1UK_NORTHW OOD_1UK_NORTHW OOD_1UK_NORTHW OOD_1UK_NORTHW OOD_1UK_NORTHW OOD_1UK_NORTHW OOD_1UK_NORTHW OOD_1UK_NORTHW OOD_1UK_NORTHW OOD_1UK_NORTHW OOD_1UK_NORTHW OOD_1UK_NORTHW OOD_1UK_NORTHW OOD_1UK_NORTHW OOD_1UK_NORTHW OOD_1UK_NORTHW OOD_1UK_NORTHW OOD_1UK_NORTHW OOD_1UK_NORTHW OOD_1

UK_PEACOCKS_LANEUK_PEACOCKS_LANEUK_PEACOCKS_LANEUK_PEACOCKS_LANEUK_PEACOCKS_LANEUK_PEACOCKS_LANEUK_PEACOCKS_LANEUK_PEACOCKS_LANEUK_PEACOCKS_LANEUK_PEACOCKS_LANEUK_PEACOCKS_LANEUK_PEACOCKS_LANEUK_PEACOCKS_LANEUK_PEACOCKS_LANEUK_PEACOCKS_LANEUK_PEACOCKS_LANEUK_PEACOCKS_LANEUK_PEACOCKS_LANEUK_PEACOCKS_LANEUK_PEACOCKS_LANEUK_PEACOCKS_LANEUK_PEACOCKS_LANEUK_PEACOCKS_LANEUK_PEACOCKS_LANEUK_PEACOCKS_LANE

UK_PENFIELDS_W OOD_1UK_PENFIELDS_W OOD_1UK_PENFIELDS_W OOD_1UK_PENFIELDS_W OOD_1UK_PENFIELDS_W OOD_1UK_PENFIELDS_W OOD_1UK_PENFIELDS_W OOD_1UK_PENFIELDS_W OOD_1UK_PENFIELDS_W OOD_1UK_PENFIELDS_W OOD_1UK_PENFIELDS_W OOD_1UK_PENFIELDS_W OOD_1UK_PENFIELDS_W OOD_1UK_PENFIELDS_W OOD_1UK_PENFIELDS_W OOD_1UK_PENFIELDS_W OOD_1UK_PENFIELDS_W OOD_1UK_PENFIELDS_W OOD_1UK_PENFIELDS_W OOD_1UK_PENFIELDS_W OOD_1UK_PENFIELDS_W OOD_1UK_PENFIELDS_W OOD_1UK_PENFIELDS_W OOD_1UK_PENFIELDS_W OOD_1UK_PENFIELDS_W OOD_1

UK_PENFIELDS_W OOD_2UK_PENFIELDS_W OOD_2UK_PENFIELDS_W OOD_2UK_PENFIELDS_W OOD_2UK_PENFIELDS_W OOD_2UK_PENFIELDS_W OOD_2UK_PENFIELDS_W OOD_2UK_PENFIELDS_W OOD_2UK_PENFIELDS_W OOD_2UK_PENFIELDS_W OOD_2UK_PENFIELDS_W OOD_2UK_PENFIELDS_W OOD_2UK_PENFIELDS_W OOD_2UK_PENFIELDS_W OOD_2UK_PENFIELDS_W OOD_2UK_PENFIELDS_W OOD_2UK_PENFIELDS_W OOD_2UK_PENFIELDS_W OOD_2UK_PENFIELDS_W OOD_2UK_PENFIELDS_W OOD_2UK_PENFIELDS_W OOD_2UK_PENFIELDS_W OOD_2UK_PENFIELDS_W OOD_2UK_PENFIELDS_W OOD_2UK_PENFIELDS_W OOD_2UK_PENFIELDS_W OOD_3UK_PENFIELDS_W OOD_3UK_PENFIELDS_W OOD_3UK_PENFIELDS_W OOD_3UK_PENFIELDS_W OOD_3UK_PENFIELDS_W OOD_3UK_PENFIELDS_W OOD_3UK_PENFIELDS_W OOD_3UK_PENFIELDS_W OOD_3UK_PENFIELDS_W OOD_3UK_PENFIELDS_W OOD_3UK_PENFIELDS_W OOD_3UK_PENFIELDS_W OOD_3UK_PENFIELDS_W OOD_3UK_PENFIELDS_W OOD_3UK_PENFIELDS_W OOD_3UK_PENFIELDS_W OOD_3UK_PENFIELDS_W OOD_3UK_PENFIELDS_W OOD_3UK_PENFIELDS_W OOD_3UK_PENFIELDS_W OOD_3UK_PENFIELDS_W OOD_3UK_PENFIELDS_W OOD_3UK_PENFIELDS_W OOD_3UK_PENFIELDS_W OOD_3

UK_PENFIELDS_W OOD_4UK_PENFIELDS_W OOD_4UK_PENFIELDS_W OOD_4UK_PENFIELDS_W OOD_4UK_PENFIELDS_W OOD_4UK_PENFIELDS_W OOD_4UK_PENFIELDS_W OOD_4UK_PENFIELDS_W OOD_4UK_PENFIELDS_W OOD_4UK_PENFIELDS_W OOD_4UK_PENFIELDS_W OOD_4UK_PENFIELDS_W OOD_4UK_PENFIELDS_W OOD_4UK_PENFIELDS_W OOD_4UK_PENFIELDS_W OOD_4UK_PENFIELDS_W OOD_4UK_PENFIELDS_W OOD_4UK_PENFIELDS_W OOD_4UK_PENFIELDS_W OOD_4UK_PENFIELDS_W OOD_4UK_PENFIELDS_W OOD_4UK_PENFIELDS_W OOD_4UK_PENFIELDS_W OOD_4UK_PENFIELDS_W OOD_4UK_PENFIELDS_W OOD_4

UK_PENFIELDS_W OOD_5UK_PENFIELDS_W OOD_5UK_PENFIELDS_W OOD_5UK_PENFIELDS_W OOD_5UK_PENFIELDS_W OOD_5UK_PENFIELDS_W OOD_5UK_PENFIELDS_W OOD_5UK_PENFIELDS_W OOD_5UK_PENFIELDS_W OOD_5UK_PENFIELDS_W OOD_5UK_PENFIELDS_W OOD_5UK_PENFIELDS_W OOD_5UK_PENFIELDS_W OOD_5UK_PENFIELDS_W OOD_5UK_PENFIELDS_W OOD_5UK_PENFIELDS_W OOD_5UK_PENFIELDS_W OOD_5UK_PENFIELDS_W OOD_5UK_PENFIELDS_W OOD_5UK_PENFIELDS_W OOD_5UK_PENFIELDS_W OOD_5UK_PENFIELDS_W OOD_5UK_PENFIELDS_W OOD_5UK_PENFIELDS_W OOD_5UK_PENFIELDS_W OOD_5UK_PENFIELDS_W OOD_6UK_PENFIELDS_W OOD_6UK_PENFIELDS_W OOD_6UK_PENFIELDS_W OOD_6UK_PENFIELDS_W OOD_6UK_PENFIELDS_W OOD_6UK_PENFIELDS_W OOD_6UK_PENFIELDS_W OOD_6UK_PENFIELDS_W OOD_6UK_PENFIELDS_W OOD_6UK_PENFIELDS_W OOD_6UK_PENFIELDS_W OOD_6UK_PENFIELDS_W OOD_6UK_PENFIELDS_W OOD_6UK_PENFIELDS_W OOD_6UK_PENFIELDS_W OOD_6UK_PENFIELDS_W OOD_6UK_PENFIELDS_W OOD_6UK_PENFIELDS_W OOD_6UK_PENFIELDS_W OOD_6UK_PENFIELDS_W OOD_6UK_PENFIELDS_W OOD_6UK_PENFIELDS_W OOD_6UK_PENFIELDS_W OOD_6UK_PENFIELDS_W OOD_6

UK_QUARRY_BANKUK_QUARRY_BANKUK_QUARRY_BANKUK_QUARRY_BANKUK_QUARRY_BANKUK_QUARRY_BANKUK_QUARRY_BANKUK_QUARRY_BANKUK_QUARRY_BANKUK_QUARRY_BANKUK_QUARRY_BANKUK_QUARRY_BANKUK_QUARRY_BANKUK_QUARRY_BANKUK_QUARRY_BANKUK_QUARRY_BANKUK_QUARRY_BANKUK_QUARRY_BANKUK_QUARRY_BANKUK_QUARRY_BANKUK_QUARRY_BANKUK_QUARRY_BANKUK_QUARRY_BANKUK_QUARRY_BANKUK_QUARRY_BANK

UK_RADW OODUK_RADW OODUK_RADW OODUK_RADW OODUK_RADW OODUK_RADW OODUK_RADW OODUK_RADW OODUK_RADW OODUK_RADW OODUK_RADW OODUK_RADW OODUK_RADW OODUK_RADW OODUK_RADW OODUK_RADW OODUK_RADW OODUK_RADW OODUK_RADW OODUK_RADW OODUK_RADW OODUK_RADW OODUK_RADW OODUK_RADW OODUK_RADW OOD

UK_SEABRIDGEUK_SEABRIDGEUK_SEABRIDGEUK_SEABRIDGEUK_SEABRIDGEUK_SEABRIDGEUK_SEABRIDGEUK_SEABRIDGEUK_SEABRIDGEUK_SEABRIDGEUK_SEABRIDGEUK_SEABRIDGEUK_SEABRIDGEUK_SEABRIDGEUK_SEABRIDGEUK_SEABRIDGEUK_SEABRIDGEUK_SEABRIDGEUK_SEABRIDGEUK_SEABRIDGEUK_SEABRIDGEUK_SEABRIDGEUK_SEABRIDGEUK_SEABRIDGEUK_SEABRIDGE

UK_SHUTLANEHEADUK_SHUTLANEHEADUK_SHUTLANEHEADUK_SHUTLANEHEADUK_SHUTLANEHEADUK_SHUTLANEHEADUK_SHUTLANEHEADUK_SHUTLANEHEADUK_SHUTLANEHEADUK_SHUTLANEHEADUK_SHUTLANEHEADUK_SHUTLANEHEADUK_SHUTLANEHEADUK_SHUTLANEHEADUK_SHUTLANEHEADUK_SHUTLANEHEADUK_SHUTLANEHEADUK_SHUTLANEHEADUK_SHUTLANEHEADUK_SHUTLANEHEADUK_SHUTLANEHEADUK_SHUTLANEHEADUK_SHUTLANEHEADUK_SHUTLANEHEADUK_SHUTLANEHEAD

UK_SILVERDALE_SHAFT_17UK_SILVERDALE_SHAFT_17UK_SILVERDALE_SHAFT_17UK_SILVERDALE_SHAFT_17UK_SILVERDALE_SHAFT_17UK_SILVERDALE_SHAFT_17UK_SILVERDALE_SHAFT_17UK_SILVERDALE_SHAFT_17UK_SILVERDALE_SHAFT_17UK_SILVERDALE_SHAFT_17UK_SILVERDALE_SHAFT_17UK_SILVERDALE_SHAFT_17UK_SILVERDALE_SHAFT_17UK_SILVERDALE_SHAFT_17UK_SILVERDALE_SHAFT_17UK_SILVERDALE_SHAFT_17UK_SILVERDALE_SHAFT_17UK_SILVERDALE_SHAFT_17UK_SILVERDALE_SHAFT_17UK_SILVERDALE_SHAFT_17UK_SILVERDALE_SHAFT_17UK_SILVERDALE_SHAFT_17UK_SILVERDALE_SHAFT_17UK_SILVERDALE_SHAFT_17UK_SILVERDALE_SHAFT_17

UK_STONY_LOWUK_STONY_LOWUK_STONY_LOWUK_STONY_LOWUK_STONY_LOWUK_STONY_LOWUK_STONY_LOWUK_STONY_LOWUK_STONY_LOWUK_STONY_LOWUK_STONY_LOWUK_STONY_LOWUK_STONY_LOWUK_STONY_LOWUK_STONY_LOWUK_STONY_LOWUK_STONY_LOWUK_STONY_LOWUK_STONY_LOWUK_STONY_LOWUK_STONY_LOWUK_STONY_LOWUK_STONY_LOWUK_STONY_LOWUK_STONY_LOW

UK_SW ALLOW CROFTUK_SW ALLOW CROFTUK_SW ALLOW CROFTUK_SW ALLOW CROFTUK_SW ALLOW CROFTUK_SW ALLOW CROFTUK_SW ALLOW CROFTUK_SW ALLOW CROFTUK_SW ALLOW CROFTUK_SW ALLOW CROFTUK_SW ALLOW CROFTUK_SW ALLOW CROFTUK_SW ALLOW CROFTUK_SW ALLOW CROFTUK_SW ALLOW CROFTUK_SW ALLOW CROFTUK_SW ALLOW CROFTUK_SW ALLOW CROFTUK_SW ALLOW CROFTUK_SW ALLOW CROFTUK_SW ALLOW CROFTUK_SW ALLOW CROFTUK_SW ALLOW CROFTUK_SW ALLOW CROFTUK_SW ALLOW CROFT

UK_TOFTUK_TOFTUK_TOFTUK_TOFTUK_TOFTUK_TOFTUK_TOFTUK_TOFTUK_TOFTUK_TOFTUK_TOFTUK_TOFTUK_TOFTUK_TOFTUK_TOFTUK_TOFTUK_TOFTUK_TOFTUK_TOFTUK_TOFTUK_TOFTUK_TOFTUK_TOFTUK_TOFTUK_TOFT

UK_TOP_FARMUK_TOP_FARMUK_TOP_FARMUK_TOP_FARMUK_TOP_FARMUK_TOP_FARMUK_TOP_FARMUK_TOP_FARMUK_TOP_FARMUK_TOP_FARMUK_TOP_FARMUK_TOP_FARMUK_TOP_FARMUK_TOP_FARMUK_TOP_FARMUK_TOP_FARMUK_TOP_FARMUK_TOP_FARMUK_TOP_FARMUK_TOP_FARMUK_TOP_FARMUK_TOP_FARMUK_TOP_FARMUK_TOP_FARMUK_TOP_FARM

UK_W ERBURGHUK_W ERBURGHUK_W ERBURGHUK_W ERBURGHUK_W ERBURGHUK_W ERBURGHUK_W ERBURGHUK_W ERBURGHUK_W ERBURGHUK_W ERBURGHUK_W ERBURGHUK_W ERBURGHUK_W ERBURGHUK_W ERBURGHUK_W ERBURGHUK_W ERBURGHUK_W ERBURGHUK_W ERBURGHUK_W ERBURGHUK_W ERBURGHUK_W ERBURGHUK_W ERBURGHUK_W ERBURGHUK_W ERBURGHUK_W ERBURGH

UK_W HITMOREUK_W HITMOREUK_W HITMOREUK_W HITMOREUK_W HITMOREUK_W HITMOREUK_W HITMOREUK_W HITMOREUK_W HITMOREUK_W HITMOREUK_W HITMOREUK_W HITMOREUK_W HITMOREUK_W HITMOREUK_W HITMOREUK_W HITMOREUK_W HITMOREUK_W HITMOREUK_W HITMOREUK_W HITMOREUK_W HITMOREUK_W HITMOREUK_W HITMOREUK_W HITMOREUK_W HITMORE

PEDL 40-1/56-1SWALLOWCROFT

Borehole

New License Area

370,000 380,000

370,000 380,000

350,000

340,000 340,000

PEDL 40-1/56-1PEDL 40-1/56-1PEDL 40-1/56-1PEDL 40-1/56-1PEDL 40-1/56-1PEDL 40-1/56-1PEDL 40-1/56-1PEDL 40-1/56-1PEDL 40-1/56-1PEDL 40-1/56-1PEDL 40-1/56-1PEDL 40-1/56-1PEDL 40-1/56-1PEDL 40-1/56-1PEDL 40-1/56-1PEDL 40-1/56-1PEDL 40-1/56-1PEDL 40-1/56-1PEDL 40-1/56-1PEDL 40-1/56-1PEDL 40-1/56-1PEDL 40-1/56-1PEDL 40-1/56-1PEDL 40-1/56-1PEDL 40-1/56-1

0 1,250 2,500

metres

Coal Mining Extent

Fault

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Competent Person’s Report: Island Gas Ltd

2.1. Database and GIIP Estimation

Outwith the mined areas, we have located and logged 54 NCB/CA boreholes, which are distributed across the acreage (Figure 2.1), largely as strip logs, although some of the wells had geophysical logs, enabling us to cross check density. We have logged all correlatable coals from the Black Band and Bricklin Coal within the available borehole strip logs, recording coal depth, thickness and ash content where logged. In addition, we have recorded estimated gas content from the NCB document “Printout from the British Coal Seam Gas Content Database” (Creedy 1992), summarising estimates of methane and ethane per seam where logged, including estimates of lost gas. A table of logged coals is given in Appendix 1 of this report.

Some 2D seismic lines have also been acquired over the block, and a small 3D seismic survey, acquired for coal exploration purposes, is also present to the east of the licences. We have not used these data in our GIIP estimation, as geological structures play no role in the accumulation of coal bed methane.

GIIP calculation for the Swallowcroft area was undertaken in the manner described in Section 1 of this report. We chose as an input area the currently licensed acreage for PEDL 40-1 and PEDL 56-1, excluding the area to the west of the Wem fault, where no borehole data are available and the Carboniferous strata are deeply buried according to British Geological Survey mapping (Figure 2.1). The net area was calculated as 50.26 km2.

Plotting borehole gas measurements against depth (corrected to sea level datum and lost gas) then provided a gas content/depth relationship, to calculate average gas content where not recorded, and also the uncertainty range in these estimates (Figure 2.2). Average gas contents were found to be in the region of 8 to 10 m3/tonne. This agrees well with measured exsolved gas volumes from local mine workings (e.g. Baker 1988).

Figure 2.2: Gas content with depth (mss), Swallowcroft Area, with low, mid and high estimates using the Langmuir equation.

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Competent Person’s Report: Island Gas Ltd

During our borehole logging, we found, on average, 30% of coals drilled were un-named and/or were not correlatable between boreholes. We have included an uplift of 30% in our high case estimate for the Swallowcroft area as a result. Our final GIIP estimates (Gross and net IGL) are tabulated below.

Table 2.1: Estimates of GIIP, PEDL 40-1, 56-1 (Swallowcroft).

(all figures in Bcf) Gross Net Risk OperatorArea Low Mid High Low Mid High Factor PEDL 40-1 and PEDL 56-1 563 854 1326 113 171 265 - Nexen

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Competent Person’s Report: Island Gas Ltd

3. Four Oaks: PEDL 145

PEDL 145 lies around 15 miles to the east of the City of Liverpool, within the county of Cheshire, onshore UK (Figure 3.1). The currently licensed area lies immediately east of the towns of Runcorn and Widnes, and is bisected by the river Mersey. The licences lie adjacent to an area of extensive mine workings, although mining activity has now ceased. As far as we can ascertain, the mined areas fall outside the licensed area (Figure 3.1).

PEDL 145 was originally awarded to IGL in the 12th Onshore Licensing Round on 20th January 2005. The first licence term expires on 30th September 2010. The licence can be extended for a second term, with relinquishment of 50% of the currently held area. Due to the unconventional nature of CBM resources, the UK Department of Trade and Industry have indicated that no relinquishment will be required should development activity continue, and extend to the south of the Mersey. Operatorship and 80% of the equity in PEDL 145 were assigned to Nexen on 9th December 2005. All first term licence commitments were met and exceeded with the drilling of Wells Doe Green-1 and Doe Green-2.

The current licensed area and the UK onshore grid blocks that form PEDL 145 are summarised in Table 1.1 of this document.

Figure 2.1: Location map: PEDL 145 (Four Oaks) including location of borehole data.

Barrows Green Borehole

BEW SEY

BINGLEY

CUERDLEY MARSH

CUERDLEY MARSH T

DALTH

Dans Road BoreholeFIDDLERS FERRY

Four Oak Borehole

FOUROAK 1

GASKELL DEACON

H. DENNIS & SON

HAYFIELD FARM BOREHOLE

Heathside Borehole

IVY COTTAGE

LAPORTE 1

LONGF

MCKECKNES W IDNE

NCB A3/14NCB A3/14-1

NCB A3/17 NCB A3/19

NCB A3/3

NCB A3/4

NCB A3/6 (Burtonwood)

NCB A3/7 NO 3 ST HELENS

ORRIS

PARK FARM

South Lane Borehole

SULLIVANS NO.2SULLIVANS NO.3

SUTTON MANOR 1

SUTTON MANOR 2SUTTON_MANOR_6

SUTTON_MANOR_SHAFT_1SUTTON_MANOR_SHAFT_2

TRIAL BID 5

TRIAL BORE 6

TURNERS ASBESTOS

No. 70

UG_82_1UG_82_2

UG_90

UG_BOLD_2_UP

UG_CF_10UG/CF/5UG/CF/7

UG/SM/11

UG_SM_12

UG_SM_13

UG_SM_14UG/SM/8UG/SM/9

S MANOR W 20S UG8

UG_69

UG_74

UG_77

PEDL 145FOUROAKS

Borehole

License Area

350,000

390,000

380,000

360,000350,000

380,000

0 1,250 2,500

metres

PEDL 145PEDL 145PEDL 145PEDL 145PEDL 145PEDL 145PEDL 145PEDL 145PEDL 145PEDL 145PEDL 145PEDL 145PEDL 145PEDL 145PEDL 145PEDL 145PEDL 145PEDL 145PEDL 145PEDL 145PEDL 145PEDL 145PEDL 145PEDL 145PEDL 145

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Geologically, the area under licence is formed by strata of Carboniferous and Permo-Triassic Age, gently dipping to the south and south-east. BGS geological maps show that these strata are cut by a number of north-south striking normal faults, throwing to the east and west, creating a number of normal fault blocks and horsts. The Carboniferous Westphalian coal measures sequence outcrops to the north of the licences. The dip of the strata place the Westphalian at depths greater than 6,500’ to the south of the licence, which is currently beyond the maximum depth for CBM exploitation as adopted by Nexen. This has an impact on the GIIP calculations to the south of the river Mersey.

Mining in the area focussed on Westphalian A and B coals, which, from the available borehole data, are at depths of approximately 500m to 1700m below surface. The area has previously been licensed for CBM exploration, with one 3D seismic survey and one vertical bore hole, Well Four Oaks-1, acquired during this exploration campaign. Well Four Oaks-1 was placed on production test, but failed to produce gas at economic rates, and was abandoned. We are advised that this occurred for mechanical rather than technical reasons, due to the poor provision of pumping equipment.

3.1. Database and GIIP Estimation

Outwith the mined areas, we have located and logged 127 NCB/CA boreholes, which are distributed to the north and north-west of the licence around the historic mine workings (Figure 3.1). A number of ‘petrogram’ maps were also located for the area to the north of the Mersey, and these were used as our primary source of coal thickness.

Some 2D seismic lines have also been acquired over the block, and a small 3D seismic survey, as discussed above, is also present in the area local to Well Four Oaks-1. Depth structure maps for the Florida Seam were also located, which we presume are based on a combination of borehole and seismic data. We have not independently verified these maps, and have not used these data in our GIIP estimation, as geological structures play no role in the accumulation of coal bed methane.

We have logged all correlatable coals from the Crombourke to the Rushey Park Coal within the available bore hole strip logs, recording coal depth and thickness where logged. In addition, we have recorded estimated gas content from the NCB document “Printout from the British Coal Seam Gas Content Database” (Creedy 1992), summarising estimates of methane and ethane per seam where logged, including estimates of lost gas. The coals logged for GIIP calculation are given in Appendix 1.

GIIP calculation for the Four Oaks area to the north of the Mersey was undertaken in the manner described in Section 1 of this report. We chose as an input area the currently licensed acreage for PEDL 145 to the north of the river. The net area was calculated as 21.15 km2.

No coal exploration or mining activity has occurred to the south of the river Mersey in PEDL 145, and as a result, there are no available borehole data. To make estimates of GIIP to the south of the Mersey, we have extended our coal seam grids southwards, controlling the dip using dip estimates, cross-section information and strata out crop pattern from the BGS Solid Geology map for the area (Runcorn Sheet 97). Uncertainty in coal measure depth was modelled by varying this dip control, within the range of dips illustrated on the map, from 2o to 5o to the south or south-east. This range of dips projects the Westphalian coal measures at increasing depth in this direction, eventually below the depth cut-offs discussed in Section 1. In the case of a 5o dip, this occurs within the licensed area. We have used these cut-offs to constrain our GIIP calculations to the south of the Mersey in PEDL 145 on a seam by seam basis, and a result we have not undertaken a layer average calculation for the area south of the Mersey.

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Competent Person’s Report: Island Gas Ltd

The Westphalian coal measures have not been proved by mining or drilling to the south of the Mersey on PEDL 145. There is therefore a risk that the coal measures are not developed. However, the strata are conformable in this direction, and it is regionally unlikely that the coal measures will change facies southwards. We therefore feel it is likely that a similar Westphalian stratigraphy is developed to the south of the Mersey as to the north, and have assigned a chance of 80% to this outcome.

Plotting borehole gas measurements against depth (corrected for lost gas) provides a gas content/depth relationship, to calculate average gas content where not recorded, and also the uncertainty range in these estimates (Figure 3.2). Average gas contents were found to be in the region of 10 to 15 m3/tonne. We also reviewed these measurements against the desorbtion data and gas content measurements acquired by IGL and Nexen from coal samples from Well Doe Green-1. In general, the NCB reported lost gas and corrected gas contents were found to be similar to those from Well Doe Green-1, and the results were incorporated without modification into our gas content estimates.

Figure 3.2: Gas content with depth, PEDL 145 (Four Oaks) area, with low, mid and high estimates using the Langmuir equation.

During our borehole logging, we found, on average, 15% of coals drilled were un-named and/or were not correlatable between boreholes. We have included an uplift of 15% in our high case estimate for the Four Oaks area as a result. Our final GIIP estimates (Gross and net IGL) for PEDL 145 north and south of the Mersey are tabulated below.

Table 3.1: Estimates of GIIP, PEDL 145 (Four Oaks)

(all figures in Bcf) Gross Net Risk OperatorArea Low Mid High Low Mid High Factor PEDL 145 (N of Mersey) 116 181 299 23 36 60 - NexenPEDL 145 (S of Mersey) 99 444 803 20 89 161 80% Nexen

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Competent Person’s Report: Island Gas Ltd

4. PEDL 92-1: Drax

PEDL 92-1 lies to the east of the Penninnes, approximately 15 miles south of the City of York, within the county of Yorkshire, onshore UK (Figure 4.1). The currently licensed area lies immediately to the south east of the town of Selby, and is cut by the river Ouse. The licences are around 10km to the north-west of the nearest subsurface workings. As far as we can ascertain, the mined areas fall outside the licensed area (Figure 4.1).

The licence PEDL 92 was originally assigned to a consortium comprising PermaGas Limited and Altwood Petroleum Limited on 29th November 2000. Following several reassignments and part relinquishment, title and 100% equity was obtained in PEDL 92-1 by IGL via execution of an option of assignment by StrataGas plc on 11th February 2005. The licences have undergone two extensions of the first term, which currently expires on 7th September 2008, with the option of extension to a three-year second term. Operatorship and 80% of the equity in PEDL 92-1 were assigned to Nexen on 9th December 2005. The drilling of Well Mill Farm-1, which is currently operating, fulfils all remaining commitments for the first licence term. The current licensed area and the UK onshore grid blocks that form PEDL 92-1 are summarised in Table 1.1 of this document.

Geologically, the area under licence is formed by strata of Carboniferous and Permo-Triassic Age, gently dipping to the south and south-east. Mining in the area focussed on Westphalian B coals, which, from the available borehole data, are at depths of approximately 200m to 1000m below surface. Although the area has been licensed historically for CBM exploration, no boreholes have been drilled on the licence for this purpose.

.

Figure 4.1: Location map: PEDL 92-1 (Drax), including location of available borehole data.

Gateforth Com mon

West Haddlesley 2West Haddlesley 1

Chapel Haddlesley

Roall Lane

Eggborough 1Eggborough 2

Eggborough 3

High EggboroughGreat Heck

Lee Lane

Kellington Com mon

Wom ersley 1

Walden Stubbs

Kellington

Burn Airfield 1Barlow 2

Burn Airfield 2

Camblesforth 1

Camblesforth 2

Cam blesforth 3Temple Hirst

Carlton West Bank 2

SnaithGow dall

Pollington 1 (Old)

Pollington 2Pollington 3

Balne Lodge

Cross Hill

Fenw ick 1Fenw ick HallAsh Hill

EskholmePincheon Green

West Cow ick New Bridge

Raw cliffe 1Raw cliffe 2

Raw cliffe Bridge

Top House

Percy Lodge

Airmyn Grange

Airmyn

Booth Ferry

Drax 1 (Old)Drax 2

Drax 3

Drax 4

Thorne Shafts 1 & 2

New sholm e

PEDL 92-1PEDL 92-1PEDL 92-1PEDL 92-1PEDL 92-1PEDL 92-1PEDL 92-1PEDL 92-1PEDL 92-1PEDL 92-1PEDL 92-1PEDL 92-1PEDL 92-1PEDL 92-1PEDL 92-1PEDL 92-1PEDL 92-1PEDL 92-1PEDL 92-1PEDL 92-1PEDL 92-1PEDL 92-1PEDL 92-1PEDL 92-1PEDL 92-1

PEDL 92-1DRAX

Borehole

License Area

0 1,250 2,500

metres

460,000 480,000

460,000 480,000

430,000

420,000

430,000

420,000

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Competent Person’s Report: Island Gas Ltd

4.1. Database and GIIP Estimation

We have located and logged 46 NCB/CA boreholes, which are distributed across the acreage (Figure 4.1), largely as strip logs. Borehole density decreases eastwards across the licence, and there is no control east of the town of Goole, (approximately 1/5 of the licence area). We have also been provided with NCB petrogram maps for the main seams. We have logged all correlatable named coals from the Sharlston Wood to the Winter coal within the available bore hole strip logs and petrogram maps, recording coal depth, thickness and ash content where logged. In addition, we have recorded estimated gas content from the NCB document “Printout from the British Coal Seam Gas Content Database” (Creedy 1992), summarising estimates of methane and ethane per seam, including estimates of lost gas. We could not locate the boreholes from which gas content data was reported by the NCB (Creedy 1992), and have thus had to calculate averages using the best fit functions as discussed in Section 1. The coals logged for GIIP calculation are given in Appendix 1.

At the time of writing, No seismic data were available to us over the block, and we have not determined geological structure. We have therefore assumed that the Westphalian coals as logged in the boreholes are present throughout the licensed area of PEDL 92-1.

Plotting borehole gas measurements against depth (corrected for lost gas) provides a gas content/depth relationship from which to calculate average gas content, and also the uncertainty range in these estimates (Figure 4.2). Average gas contents were found to be in the region of 3 to 6 m3/tonne. Little datum information could be obtained for the boreholes within the area, and we were unable to correct to sea level. However, the topography in the area is relatively flat and close to sea level, and we found that this had little effect on the final calculations.

GIIP calculation for the Drax area was undertaken in the manner described in Section 1 of this report, both on a layer average and a grid basis to cross-check the mid case estimate. We chose as an input area the currently licensed acreage for PEDL 92-1 of 200km2, assuming coals are present across the entire area.

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Competent Person’s Report: Island Gas Ltd

Figure 4.2: Gas content with depth, PEDL 92-1 (Drax), with low, mid and high estimates using the Langmuir equation.

During our borehole logging, we found, on average, 7% of coals drilled were un-named and/or were not correlatable between boreholes. We have included an uplift of 7% in our high case estimate for the Drax area as a result. Our final GIIP estimates (Gross and net IGL) are tabulated below.

Table 4.1: Estimates of GIIP, PEDL 92-1 (Drax).

(all figures in Bcf) Gross Net Risk OperatorArea Low Mid High Low Mid High Factor PEDL 92-1 383 652 1134 77 130 227 - Nexen

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Competent Person’s Report: Island Gas Ltd

5. PEDL 107 and Offshore Exploration Blocks 110/18,19 and 23: Point of Ayr

PEDL 107 lies to the west of the Dee estuary, approximately 15 miles west-south-west of the City of Liverpool, within the county of Flintshire, onshore UK (Figure 4.1). The currently licensed area lies immediately to the east of the town of Prestatyn. Westphalian A and B Age strata are present to the east of the licence, where they have been extensively mined within the Point of Ayr and Mostyn collieries, which are now abandoned. PEDL 107 has limited potential for CBM as a result.

The licence is contiguous with the offshore exploration licence SPPL 1481, which includes blocks 110/18 (part), 110/19 (part) and 110/23 (part). The Westphalian A and B strata mined in PEDL 107 are proven in Block 110/18 (part) by a series of exploration boreholes and shallow seismic lines acquired as part of a NCB coal exploration programme. As a result, IGL and Nexen see CBM potential within the offshore blocks, with the onshore area providing a suitable location for drilling access. PEDL 107, and the offshore exploration blocks 110/18 (part), 110/19 (part) and 110/23 (part) are here collectively referred to as Point of Ayr, as our evaluation methods incorporate data from all licences. However, we have split out the onshore and offshore components in our final tabulation of GIIP estimates.

The licence PEDL 107 was originally assigned 100% to Alkane Engergy plc (‘Alkane’) on 11th March 2002. IGL and Nexen each acquired a 50% interest in the licence from Alkane on 23rd January 2007, with Nexen carrying IGL’s share of commitment costs, as a minimum, and acting as Operator. The first licence term expires on 31st January 2008, with a drill or drop commitment of a well to at least 400m. No relinquishment is expected should the licence be retained for a second term, as the area is below the 25km2 minimum retention area.

Offshore exploration blocks 110/18 (part), 110/19 (part) and 110/23 (part) were acquired by IGL and Nexen as part of the 24th UK Offshore Licensing Round as Traditional Licence SPPL 1481. The licence was acquired on a 50%/50% basis, with Nexen carrying IGL’s share of commitment costs, as a minimum, and acting as Operator. The first licence term expires 31st March 2011, where a 50% relinquishment may be required. The current licensed area, the UK onshore grid blocks, and the offshore exploration blocks that form the Point of Ayr licenses are summarised in Table 1.1 of this document.

Geologically, the area under licence is formed by strata of Carboniferous and Permo-Triassic Age, deformed as an upthrown anticlinal structure, plunging northwards. For the most part, the onshore outcrop (within PEDL 107) is composed of strata older than the Westphalian coal measures. Geological structure to the offshore is poorly constrained in Blocks 110/18 and 11/23, and is discussed in more detail in the section below.

Mining in the area focussed on Westphalian coals, which, from the available borehole data, are at depths of approximately 200m to 700m below datum. Areas of the licence have been extensively mined, and are not prospective for CBM as a result.

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Competent Person’s Report: Island Gas Ltd

Figure 5.1: Location map: PEDL 107 and Exploration Licence 1481 – Blocks 110/18 (part), 110/19 (part) and 110/23 (part) (collectively Point of Ayr), including location of mine workings and borehole data.

5.1. Database and GIIP Estimation

Little primary geological data are available for the Point of Ayr area. We have located and logged 13 NCB/CA boreholes, which are distributed largely in the offshore (Figure 5.1). In particular, there are few onshore boreholes, and those that were drilled have no correlatable stratigraphy (e.g. bore holes Talacre-1 to -6) apart from the Durbog seam. Where possible, we have logged all correlatable named coals from the Warras to the Soft Five Quarters coal within the available bore hole strip logs, recording coal depth, thickness and ash content where logged. Little datum information could be obtained for the boreholes within the area, and we were unable to correct to sea level. However, the topography in the area is relatively flat, and we found that this had little effect on the final calculations. The named coals logged in this exercise are listed in Appendix 1.

In addition, we have recorded estimated gas content from the NCB document “Printout from the British Coal Seam Gas Content Database” (Creedy 1992), summarising estimates of methane and ethane per seam, including estimates of lost gas. Again, few seam gas content measurements are made, and we have instead relied on estimates of gas content based on the coal rank and associated Langmuir constants. As a result, we estimate a wide range of gas contents at present (Figure 4.2). Observed gas contents in Point of Ayr are, however, some of the highest logged during this exercise for their recorded depths, of between 8 to 12 m3/tonne.

GIIP calculation for the Point of Ayr area was undertaken in a similar manner to that described in Section 1 of this report. However, due to the small number of available boreholes, we have used a grid based method only to estimate GIIP. We have also subdivided our estimates between the onshore PEDL 107 and offshore block 110/19. As the coal measures are not proven on blocks 110/18 or 110/23, we have also subdivided our estimates for these blocks, and have associated a risk factor to our final estimates, based on the possibility that the coal measures are not developed to the extent that we have modelled.

POA 0/S No 2POA 0/S No 2POA 0/S No 2POA 0/S No 2POA 0/S No 2POA 0/S No 2POA 0/S No 2POA 0/S No 2POA 0/S No 2Hoyle BankHoyle BankHoyle BankHoyle BankHoyle BankHoyle BankHoyle BankHoyle BankHoyle Bank

POA 0/S No 6POA 0/S No 6POA 0/S No 6POA 0/S No 6POA 0/S No 6POA 0/S No 6POA 0/S No 6POA 0/S No 6POA 0/S No 6

POA 0/S No 3POA 0/S No 3POA 0/S No 3POA 0/S No 3POA 0/S No 3POA 0/S No 3POA 0/S No 3POA 0/S No 3POA 0/S No 3

POA 0/S No 1POA 0/S No 1POA 0/S No 1POA 0/S No 1POA 0/S No 1POA 0/S No 1POA 0/S No 1POA 0/S No 1POA 0/S No 1

POA 0/S No 4POA 0/S No 4POA 0/S No 4POA 0/S No 4POA 0/S No 4POA 0/S No 4POA 0/S No 4POA 0/S No 4POA 0/S No 4

POA 0/S No 5POA 0/S No 5POA 0/S No 5POA 0/S No 5POA 0/S No 5POA 0/S No 5POA 0/S No 5POA 0/S No 5POA 0/S No 5

Talacre-1Talacre-1Talacre-1Talacre-1Talacre-1Talacre-1Talacre-1Talacre-1Talacre-1Talacre-2Talacre-2Talacre-2Talacre-2Talacre-2Talacre-2Talacre-2Talacre-2Talacre-2Talacre-3Talacre-3Talacre-3Talacre-3Talacre-3Talacre-3Talacre-3Talacre-3Talacre-3Talacre-4Talacre-4Talacre-4Talacre-4Talacre-4Talacre-4Talacre-4Talacre-4Talacre-4Talacre-5Talacre-5Talacre-5Talacre-5Talacre-5Talacre-5Talacre-5Talacre-5Talacre-5

Talacre-6Talacre-6Talacre-6Talacre-6Talacre-6Talacre-6Talacre-6Talacre-6Talacre-6

RhuddlanRhuddlanRhuddlanRhuddlanRhuddlanRhuddlanRhuddlanRhuddlanRhuddlan

PAUG-88 6PAUG-88 6PAUG-88 6PAUG-88 6PAUG-88 6PAUG-88 6PAUG-88 6PAUG-88 6PAUG-88 6PAUG-88 7PAUG-88 7PAUG-88 7PAUG-88 7PAUG-88 7PAUG-88 7PAUG-88 7PAUG-88 7PAUG-88 7

PAUG-25PAUG-25PAUG-25PAUG-25PAUG-25PAUG-25PAUG-25PAUG-25PAUG-25

PEDL 107-1PEDL 107-1PEDL 107-1PEDL 107-1PEDL 107-1PEDL 107-1PEDL 107-1PEDL 107-1PEDL 107-1

110/18110/18110/18110/18110/18110/18110/18110/18110/18 110/19110/19110/19110/19110/19110/19110/19110/19110/19

110/23110/23110/23110/23110/23110/23110/23110/23110/23

PEDL 107-1PEDL 107-1PEDL 107-1PEDL 107-1PEDL 107-1PEDL 107-1PEDL 107-1PEDL 107-1PEDL 107-1POINT OF AYR AND POINT OF AYR AND POINT OF AYR AND POINT OF AYR AND POINT OF AYR AND POINT OF AYR AND POINT OF AYR AND POINT OF AYR AND POINT OF AYR AND

OFFSHORE LICENSESOFFSHORE LICENSESOFFSHORE LICENSESOFFSHORE LICENSESOFFSHORE LICENSESOFFSHORE LICENSESOFFSHORE LICENSESOFFSHORE LICENSESOFFSHORE LICENSESOnshore LicenseOnshore LicenseOnshore LicenseOnshore LicenseOnshore LicenseOnshore LicenseOnshore LicenseOnshore LicenseOnshore License

Offshore LicenseOffshore LicenseOffshore LicenseOffshore LicenseOffshore LicenseOffshore LicenseOffshore LicenseOffshore LicenseOffshore License

Coal ExtentsCoal ExtentsCoal ExtentsCoal ExtentsCoal ExtentsCoal ExtentsCoal ExtentsCoal ExtentsCoal Extents

Coal Mining ExtentsCoal Mining ExtentsCoal Mining ExtentsCoal Mining ExtentsCoal Mining ExtentsCoal Mining ExtentsCoal Mining ExtentsCoal Mining ExtentsCoal Mining Extents

BoreholesBoreholesBoreholesBoreholesBoreholesBoreholesBoreholesBoreholesBoreholes

295,000295,000295,000295,000295,000295,000295,000295,000295,000 315,000315,000315,000315,000315,000315,000315,000315,000315,000

390,000390,000390,000390,000390,000390,000390,000390,000390,000

380,000380,000380,000380,000380,000380,000380,000380,000380,000

390,000390,000390,000390,000390,000390,000390,000390,000390,000

305,000305,000305,000305,000305,000305,000305,000305,000305,000 315,000315,000315,000315,000315,000315,000315,000315,000315,000

305,000305,000305,000305,000305,000305,000305,000305,000305,000

0 1,250 2,500

metres

Island_Gas_CPR_Rev1_client_relea26 26 9/11/07 19:13:36

65

Competent Person’s Report: Island Gas Ltd

Figure 5.2: Gas content with depth, Point of Ayr, with low, mid and high estimates using the Langmuir equation.

The onshore PEDL 107 has, for the most part, strata older than the Westphalian A and B coal measures outcropping at surface. Where the coal measures are present, they are either too shallow (<200’), for instance in the area drilled by the Talacre bore holes, or they have been extensively mined. As a result, little remaining CBM potential is present within the licence. However, we understand that the Bychton Two Yard and the Warras coals are not mined, and we have included these areas, where below 200’, within our low and mid case estimates. Our high case estimate for PEDL 107 also makes an estimate of the thickness of unnamed and un-mined coals within the mined areas. Exploitation of coals in these areas for CBM will, however, be technically challenging.

The immediate offshore to PEDL 107 (Block 110/19) was subject to an active exploration campaign by the NCB in the mid 1980’s, which is fully reported (NCB 1986). This campaign resulted in the drilling of several offshore boreholes and the acquisition of 2D seismic data to map structure. These were combined to create a depth structure map for the Durbog Seam – a coal seam towards the base of the mined and logged stratigraphy in the area (Figure 5.3). We have cross-checked this map against the primary data made available to us by IGL, and believe it is a fair representation of the offshore structure in the area. We have therefore adopted this as a datum structure map, from which we have estimated the depths of the logged named coals above and below the Durbog seam. We have also used these dips to extrapolate all logged named coal seam grids away from control to the block or drilling boundaries, as discussed for our low and mid cases in Section 1. Our low and mid cases are also bound to the east by a major fault identified on seismic, and associated with a significant eastwards throw. However, we have included the whole area of the block in our high case estimate, plus an estimate of additional, unlogged, coals in the area, of approximately 30%.

Island_Gas_CPR_Rev1_client_relea27 27 9/11/07 19:13:36

66

Competent Person’s Report: Island Gas Ltd

Figure 5.3: Top Durbog Seam Depth Map (mss), reconstructed from NCB mapping (NCB 1986).

It is probable that the coal measures extend under part or all of the other adjacent Blocks 110/18 (part) and 110/23 (part). Some maps are available in the public domain, as a result of oil and gas exploration in the immediate offshore. Regional BGS structure maps for the Coal Measures and Top Namurian Maps also extend over part of the licence. The limitations of these maps are discussed further in Section 6 of this report. Furthermore, onshore borehole Rhuddlan-1 shows the development of five coal seams within the Westphalian, all of which have thicknesses greater than 60cm. However, the geological structure in these blocks is highly uncertain.

We have incorporated all this information to make an estimate of the possible extent, depth and range of thicknesses of the Westphalian A and B on Blocks 110/18 (part) and 110/23 (part). Due to the lack of data, we have not mapped each logged named coal across blocks 110/18 and 110/23. Instead, we have made estimates of net coal thickness, and the depth range on block for an approximate datum within the Westphalian A and B, the Durbog seam, used to review depth cut-off extents and gas content values based on the relationships shown in Figure 5.2. Our depth estimates range from 400 to 500mss, and thus none of our estimates place the coals at depths in excess of the cut-offs described in Section 1.

Our estimates of average thickness of net coal within the block were based on the Point of Ayr and Rhuddlan-1 bore holes. It is clear from these data that the coal seams are likely to thin from offshore to onshore, but there were no geological or geophysical data available to us at the time of writing to determine how this occurs. To account for this, we have made differing estimates of net coal thickness for the two blocks, thinning the coals on block 110/23 relative to 110/18. This is a simplistic method, and we would recommend further data are acquired in the future to better determine the structural geometry from onshore to offshore.

350

300

500

550

400

450

250 250

550

500

600650

900

950

1000

300

600

600

650

700

750

800850

250

450

550

500

450

300

30035

040

0

400

400

600

600

POA 0/S No 2POA 0/S No 2POA 0/S No 2POA 0/S No 2POA 0/S No 2POA 0/S No 2POA 0/S No 2POA 0/S No 2POA 0/S No 2POA 0/S No 2POA 0/S No 2POA 0/S No 2POA 0/S No 2POA 0/S No 2POA 0/S No 2POA 0/S No 2POA 0/S No 2POA 0/S No 2POA 0/S No 2POA 0/S No 2POA 0/S No 2POA 0/S No 2POA 0/S No 2POA 0/S No 2POA 0/S No 2

Hoyle BankHoyle BankHoyle BankHoyle BankHoyle BankHoyle BankHoyle BankHoyle BankHoyle BankHoyle BankHoyle BankHoyle BankHoyle BankHoyle BankHoyle BankHoyle BankHoyle BankHoyle BankHoyle BankHoyle BankHoyle BankHoyle BankHoyle BankHoyle BankHoyle Bank

POA 0/S No 6POA 0/S No 6POA 0/S No 6POA 0/S No 6POA 0/S No 6POA 0/S No 6POA 0/S No 6POA 0/S No 6POA 0/S No 6POA 0/S No 6POA 0/S No 6POA 0/S No 6POA 0/S No 6POA 0/S No 6POA 0/S No 6POA 0/S No 6POA 0/S No 6POA 0/S No 6POA 0/S No 6POA 0/S No 6POA 0/S No 6POA 0/S No 6POA 0/S No 6POA 0/S No 6POA 0/S No 6

POA 0/S No 3POA 0/S No 3POA 0/S No 3POA 0/S No 3POA 0/S No 3POA 0/S No 3POA 0/S No 3POA 0/S No 3POA 0/S No 3POA 0/S No 3POA 0/S No 3POA 0/S No 3POA 0/S No 3POA 0/S No 3POA 0/S No 3POA 0/S No 3POA 0/S No 3POA 0/S No 3POA 0/S No 3POA 0/S No 3POA 0/S No 3POA 0/S No 3POA 0/S No 3POA 0/S No 3POA 0/S No 3

POA 0/S No 1POA 0/S No 1POA 0/S No 1POA 0/S No 1POA 0/S No 1POA 0/S No 1POA 0/S No 1POA 0/S No 1POA 0/S No 1POA 0/S No 1POA 0/S No 1POA 0/S No 1POA 0/S No 1POA 0/S No 1POA 0/S No 1POA 0/S No 1POA 0/S No 1POA 0/S No 1POA 0/S No 1POA 0/S No 1POA 0/S No 1POA 0/S No 1POA 0/S No 1POA 0/S No 1POA 0/S No 1

POA 0/S No 4POA 0/S No 4POA 0/S No 4POA 0/S No 4POA 0/S No 4POA 0/S No 4POA 0/S No 4POA 0/S No 4POA 0/S No 4POA 0/S No 4POA 0/S No 4POA 0/S No 4POA 0/S No 4POA 0/S No 4POA 0/S No 4POA 0/S No 4POA 0/S No 4POA 0/S No 4POA 0/S No 4POA 0/S No 4POA 0/S No 4POA 0/S No 4POA 0/S No 4POA 0/S No 4POA 0/S No 4

POA 0/S No 5POA 0/S No 5POA 0/S No 5POA 0/S No 5POA 0/S No 5POA 0/S No 5POA 0/S No 5POA 0/S No 5POA 0/S No 5POA 0/S No 5POA 0/S No 5POA 0/S No 5POA 0/S No 5POA 0/S No 5POA 0/S No 5POA 0/S No 5POA 0/S No 5POA 0/S No 5POA 0/S No 5POA 0/S No 5POA 0/S No 5POA 0/S No 5POA 0/S No 5POA 0/S No 5POA 0/S No 5

Talacre-1Talacre-1Talacre-1Talacre-1Talacre-1Talacre-1Talacre-1Talacre-1Talacre-1Talacre-1Talacre-1Talacre-1Talacre-1Talacre-1Talacre-1Talacre-1Talacre-1Talacre-1Talacre-1Talacre-1Talacre-1Talacre-1Talacre-1Talacre-1Talacre-1Talacre-2Talacre-2Talacre-2Talacre-2Talacre-2Talacre-2Talacre-2Talacre-2Talacre-2Talacre-2Talacre-2Talacre-2Talacre-2Talacre-2Talacre-2Talacre-2Talacre-2Talacre-2Talacre-2Talacre-2Talacre-2Talacre-2Talacre-2Talacre-2Talacre-2

Talacre-3Talacre-3Talacre-3Talacre-3Talacre-3Talacre-3Talacre-3Talacre-3Talacre-3Talacre-3Talacre-3Talacre-3Talacre-3Talacre-3Talacre-3Talacre-3Talacre-3Talacre-3Talacre-3Talacre-3Talacre-3Talacre-3Talacre-3Talacre-3Talacre-3Talacre-4Talacre-4Talacre-4Talacre-4Talacre-4Talacre-4Talacre-4Talacre-4Talacre-4Talacre-4Talacre-4Talacre-4Talacre-4Talacre-4Talacre-4Talacre-4Talacre-4Talacre-4Talacre-4Talacre-4Talacre-4Talacre-4Talacre-4Talacre-4Talacre-4

Talacre-5Talacre-5Talacre-5Talacre-5Talacre-5Talacre-5Talacre-5Talacre-5Talacre-5Talacre-5Talacre-5Talacre-5Talacre-5Talacre-5Talacre-5Talacre-5Talacre-5Talacre-5Talacre-5Talacre-5Talacre-5Talacre-5Talacre-5Talacre-5Talacre-5

Talacre-6Talacre-6Talacre-6Talacre-6Talacre-6Talacre-6Talacre-6Talacre-6Talacre-6Talacre-6Talacre-6Talacre-6Talacre-6Talacre-6Talacre-6Talacre-6Talacre-6Talacre-6Talacre-6Talacre-6Talacre-6Talacre-6Talacre-6Talacre-6Talacre-6

PAUG-88 6PAUG-88 6PAUG-88 6PAUG-88 6PAUG-88 6PAUG-88 6PAUG-88 6PAUG-88 6PAUG-88 6PAUG-88 6PAUG-88 6PAUG-88 6PAUG-88 6PAUG-88 6PAUG-88 6PAUG-88 6PAUG-88 6PAUG-88 6PAUG-88 6PAUG-88 6PAUG-88 6PAUG-88 6PAUG-88 6PAUG-88 6PAUG-88 6PAUG-88 7PAUG-88 7PAUG-88 7PAUG-88 7PAUG-88 7PAUG-88 7PAUG-88 7PAUG-88 7PAUG-88 7PAUG-88 7PAUG-88 7PAUG-88 7PAUG-88 7PAUG-88 7PAUG-88 7PAUG-88 7PAUG-88 7PAUG-88 7PAUG-88 7PAUG-88 7PAUG-88 7PAUG-88 7PAUG-88 7PAUG-88 7PAUG-88 7

PAUG-25PAUG-25PAUG-25PAUG-25PAUG-25PAUG-25PAUG-25PAUG-25PAUG-25PAUG-25PAUG-25PAUG-25PAUG-25PAUG-25PAUG-25PAUG-25PAUG-25PAUG-25PAUG-25PAUG-25PAUG-25PAUG-25PAUG-25PAUG-25PAUG-25

DURBOG SEAM DEPTH DURBOG SEAM DEPTH DURBOG SEAM DEPTH DURBOG SEAM DEPTH DURBOG SEAM DEPTH DURBOG SEAM DEPTH DURBOG SEAM DEPTH DURBOG SEAM DEPTH DURBOG SEAM DEPTH DURBOG SEAM DEPTH DURBOG SEAM DEPTH DURBOG SEAM DEPTH DURBOG SEAM DEPTH DURBOG SEAM DEPTH DURBOG SEAM DEPTH DURBOG SEAM DEPTH DURBOG SEAM DEPTH DURBOG SEAM DEPTH DURBOG SEAM DEPTH DURBOG SEAM DEPTH DURBOG SEAM DEPTH DURBOG SEAM DEPTH DURBOG SEAM DEPTH DURBOG SEAM DEPTH DURBOG SEAM DEPTH DURBOG SEAM DEPTH DURBOG SEAM DEPTH DURBOG SEAM DEPTH DURBOG SEAM DEPTH DURBOG SEAM DEPTH DURBOG SEAM DEPTH DURBOG SEAM DEPTH DURBOG SEAM DEPTH DURBOG SEAM DEPTH DURBOG SEAM DEPTH DURBOG SEAM DEPTH DURBOG SEAM DEPTH DURBOG SEAM DEPTH DURBOG SEAM DEPTH DURBOG SEAM DEPTH DURBOG SEAM DEPTH DURBOG SEAM DEPTH DURBOG SEAM DEPTH DURBOG SEAM DEPTH DURBOG SEAM DEPTH DURBOG SEAM DEPTH DURBOG SEAM DEPTH DURBOG SEAM DEPTH DURBOG SEAM DEPTH DURBOG SEAM DEPTH GRID (M) OVER OFFSHOREGRID (M) OVER OFFSHOREGRID (M) OVER OFFSHOREGRID (M) OVER OFFSHOREGRID (M) OVER OFFSHOREGRID (M) OVER OFFSHOREGRID (M) OVER OFFSHOREGRID (M) OVER OFFSHOREGRID (M) OVER OFFSHOREGRID (M) OVER OFFSHOREGRID (M) OVER OFFSHOREGRID (M) OVER OFFSHOREGRID (M) OVER OFFSHOREGRID (M) OVER OFFSHOREGRID (M) OVER OFFSHOREGRID (M) OVER OFFSHOREGRID (M) OVER OFFSHOREGRID (M) OVER OFFSHOREGRID (M) OVER OFFSHOREGRID (M) OVER OFFSHOREGRID (M) OVER OFFSHOREGRID (M) OVER OFFSHOREGRID (M) OVER OFFSHOREGRID (M) OVER OFFSHOREGRID (M) OVER OFFSHOREGRID (M) OVER OFFSHOREGRID (M) OVER OFFSHOREGRID (M) OVER OFFSHOREGRID (M) OVER OFFSHOREGRID (M) OVER OFFSHOREGRID (M) OVER OFFSHOREGRID (M) OVER OFFSHOREGRID (M) OVER OFFSHOREGRID (M) OVER OFFSHOREGRID (M) OVER OFFSHOREGRID (M) OVER OFFSHOREGRID (M) OVER OFFSHOREGRID (M) OVER OFFSHOREGRID (M) OVER OFFSHOREGRID (M) OVER OFFSHOREGRID (M) OVER OFFSHOREGRID (M) OVER OFFSHOREGRID (M) OVER OFFSHOREGRID (M) OVER OFFSHOREGRID (M) OVER OFFSHOREGRID (M) OVER OFFSHOREGRID (M) OVER OFFSHOREGRID (M) OVER OFFSHOREGRID (M) OVER OFFSHOREGRID (M) OVER OFFSHORE

BLOCK 110/19BLOCK 110/19BLOCK 110/19BLOCK 110/19BLOCK 110/19BLOCK 110/19BLOCK 110/19BLOCK 110/19BLOCK 110/19BLOCK 110/19BLOCK 110/19BLOCK 110/19BLOCK 110/19BLOCK 110/19BLOCK 110/19BLOCK 110/19BLOCK 110/19BLOCK 110/19BLOCK 110/19BLOCK 110/19BLOCK 110/19BLOCK 110/19BLOCK 110/19BLOCK 110/19BLOCK 110/19BLOCK 110/19BLOCK 110/19BLOCK 110/19BLOCK 110/19BLOCK 110/19BLOCK 110/19BLOCK 110/19BLOCK 110/19BLOCK 110/19BLOCK 110/19BLOCK 110/19BLOCK 110/19BLOCK 110/19BLOCK 110/19BLOCK 110/19BLOCK 110/19BLOCK 110/19BLOCK 110/19BLOCK 110/19BLOCK 110/19BLOCK 110/19BLOCK 110/19BLOCK 110/19BLOCK 110/19BLOCK 110/19

Onshore License

Offshore License

Boreholes

0 500 1,000

metres

PEDL 107-1 PEDL 107-1 PEDL 107-1 PEDL 107-1 PEDL 107-1 PEDL 107-1 PEDL 107-1 PEDL 107-1 PEDL 107-1 PEDL 107-1 PEDL 107-1 PEDL 107-1 PEDL 107-1 PEDL 107-1 PEDL 107-1 PEDL 107-1 PEDL 107-1 PEDL 107-1 PEDL 107-1 PEDL 107-1 PEDL 107-1 PEDL 107-1 PEDL 107-1 PEDL 107-1 PEDL 107-1 PEDL 107-1 PEDL 107-1 PEDL 107-1 PEDL 107-1 PEDL 107-1 PEDL 107-1 PEDL 107-1 PEDL 107-1 PEDL 107-1 PEDL 107-1 PEDL 107-1 PEDL 107-1 PEDL 107-1 PEDL 107-1 PEDL 107-1 PEDL 107-1 PEDL 107-1 PEDL 107-1 PEDL 107-1 PEDL 107-1 PEDL 107-1 PEDL 107-1 PEDL 107-1 PEDL 107-1 PEDL 107-1

110/19110/19110/19110/19110/19110/19110/19110/19110/19110/19110/19110/19110/19110/19110/19110/19110/19110/19110/19110/19110/19110/19110/19110/19110/19110/19110/19110/19110/19110/19110/19110/19110/19110/19110/19110/19110/19110/19110/19110/19110/19110/19110/19110/19110/19110/19110/19110/19110/19110/19

310,000 315,000

315,000310,000305,000

5,000 385,00

390,000,000

Island_Gas_CPR_Rev1_client_relea28 28 9/11/07 19:13:36

67

Competent Person’s Report: Island Gas Ltd

For block 110/18, we have estimated a low case net coal thickness based on the average of all coals >1m in thickness within the Point of Ayr boreholes and the Rhuddlan-1 borehole (15.68m). Our mid case took the average thickness of all coals >60cm in thickness within the Point of Ayr boreholes alone, (26.38m). Our high case averaged all logged coals plus our estimate of unnamed coals (30%), again using the Point of Ayr boreholes alone (37.5m).

For Block 110/23 we have thinned the coals based on the proximity of the licence to the Rhuddlan-1 borehole. For our low case we have used the net coal thickness >1m logged in the Rhuddlan-1 borehole (7.6m), our mid case averages the thickness of logged coals >60cm in both the Rhuddlan-1 borehole and the Point of Ayr boreholes (16.99m), and our high case adopts the same high case as block 110/18.

These have been combined with the low, mid and high case depth, gas content and areal extent controls, as described in Section 1, to make low, mid and high case estimates of GIIP.

The Westphalian coal measures have not been proved by mining or drilling within Blocks 110/18 or 110/23. There is therefore a risk that the coal measures are not developed. However, the strata appear conformable away from borehole control, based on the limited data we have to hand, and it is regionally unlikely that the coal measures will change facies northwards. We therefore feel it is likely that Westphalian coals are developed within Blocks 110/18 and 110/23 as we have modelled, and have assigned a chance of 80% to this outcome.

Table 5.1: Estimates of GIIP, Point of Ayr (PEDL 107 and Exploration Licence 1481).

(all figures in Bcf) Gross Net Risk OperatorArea Low Mid High Low Mid High Factor Point of Ayr Onshore (PEDL 107) 2 4 10 1 2 5 - NexenPoint of Ayr Offshore (110/19 Part) 87 162 1141 43 81 571 - Nexen(110/18 Part and 110/23 Part) 120 508 4340 60 254 2170 80% Nexen

Island_Gas_CPR_Rev1_client_relea29 29 9/11/07 19:13:36

68

Competent Person’s Report: Island Gas Ltd

6. PEDL 78-1: Greater Swallowcroft

PEDL 78-1 lies to the north west of the City of Birmingham, within the county of Staffordshire, onshore UK, due south of PEDL 56 (Figures 2.1 and 6.1). The currently licensed area is centred on the town of Loggerheads. As far as we can ascertain, no coal mining or coal exploration has occurred within the licensed area, and no boreholes have proven Westphalian coal measures to be developed on-block.

The licence PEDL 78 was originally assigned to a consortium comprising PermaGas Limited and Altwood Petroleum Limited on 16th October 2000. Following several reassignments and part relinquishment, title and 100% equity was obtained in PEDL 78-1 by IGL via execution of an option of assignment by StrataGas plc, and was assigned to IGL on 11th February 2005. The licences have undergone two extensions of the first term, which currently expires on 7th September 2008, with the option of extension to a three-year second term. The remaining licence commitment is for one drill or drop well. Operatorship and 80% of the equity in PEDL 78-1 were assigned to Nexen on 9th December 2005. The current licensed area and the UK onshore grid blocks that form PEDL 78-1 are summarised in Table 1.1 of this document.

Geologically, the area under licence is formed by strata of Carboniferous and Permo-Triassic Age. Solid geological maps show the area to be generally dipping from south to north, with a complex of north-south trending normal faults, commonly downthrowing to the east. The one available borehole within PEDL 78-1, the Sidway Mill (Mahr) borehole, show that the upper part of the Westphalian does not contain coal. This borehole reached total depth at the Rowhurst Rider marine band, and proved no coal on block. It does, however, provide a useful data point for demonstrating the depth to the top of any potential remaining coals. The nearest borehole with a penetration of the lower logged sequence is within the adjacent PEDL40-1 – the Bitterns borehole. Thus, there is no evidence for the presence of Westphalian coals within PEDL 78-1.

Figure 6.1: Location map: PEDL 78-1 (Greater Swallowcroft), including licence area and the Sidway Mill-1 borehole. The subdivision into Areas A and B is also illustrated.

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PEDL 78-1PEDL 78-1PEDL 78-1PEDL 78-1PEDL 78-1PEDL 78-1PEDL 78-1PEDL 78-1PEDL 78-1PEDL 78-1PEDL 78-1PEDL 78-1PEDL 78-1PEDL 78-1PEDL 78-1PEDL 78-1PEDL 78-1PEDL 78-1PEDL 78-1PEDL 78-1PEDL 78-1PEDL 78-1PEDL 78-1PEDL 78-1PEDL 78-1

PEDL 78-1GREATER SWALLOWCROFT

License AreaLicense AreaLicense AreaLicense AreaLicense AreaLicense AreaLicense AreaLicense AreaLicense AreaLicense AreaLicense AreaLicense AreaLicense AreaLicense AreaLicense AreaLicense AreaLicense AreaLicense AreaLicense AreaLicense AreaLicense AreaLicense AreaLicense AreaLicense AreaLicense Area

0 1,250 2,500

metres

370,000370,000370,000370,000370,000370,000370,000370,000370,000370,000370,000370,000370,000370,000370,000370,000370,000370,000370,000370,000370,000370,000370,000370,000370,000 380,000380,000380,000380,000380,000380,000380,000380,000380,000380,000380,000380,000380,000380,000380,000380,000380,000380,000380,000380,000380,000380,000380,000380,000380,000

370,000370,000370,000370,000370,000370,000370,000370,000370,000370,000370,000370,000370,000370,000370,000370,000370,000370,000370,000370,000370,000370,000370,000370,000370,000 380,000380,000380,000380,000380,000380,000380,000380,000380,000380,000380,000380,000380,000380,000380,000380,000380,000380,000380,000380,000380,000380,000380,000380,000380,000

330,000330,000330,000330,000330,000330,000330,000330,000330,000330,000330,000330,000330,000330,000330,000330,000330,000330,000330,000330,000330,000330,000330,000330,000330,000

340,000340,000340,000340,000340,000340,000340,000340,000340,000340,000340,000340,000340,000340,000340,000340,000340,000340,000340,000340,000340,000340,000340,000340,000340,000

330,000330,000330,000330,000330,000330,000330,000330,000330,000330,000330,000330,000330,000330,000330,000330,000330,000330,000330,000330,000330,000330,000330,000330,000330,000

BoreholeBoreholeBoreholeBoreholeBoreholeBoreholeBoreholeBoreholeBoreholeBoreholeBoreholeBoreholeBoreholeBoreholeBoreholeBoreholeBoreholeBoreholeBoreholeBoreholeBoreholeBoreholeBoreholeBoreholeBorehole

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Competent Person’s Report: Island Gas Ltd

6.1. Database and GIIP Estimation

As discussed, no borehole data penetrating the coal measures were available to us within PEDL 78-1, and no other geological or geophysical information could be sourced to make an estimate of the presence, thickness and depth of the Westphalian coal measures. As a result, we have adopted the coal measures stratigraphy as logged on the adjacent PEDL 040-1 and PEDL 056-1. It is clear from the Sidway Mill (Maer) borehole that the upper parts of the Westphalian are not developed on PEDL 78-1. We have therefore limited our model to the lower coal sequence from the Burnwood to the Bullhurst seams.

We have made estimates of the average depth for the preserved coal measures we expect in our model within PEDL 78-1, based on the available geological maps, and also a simplified Top Namurian and Top Coal Measures depth maps published by the BGS. We have found that the latter two maps generally simplify geological structure, and do not necessarily tie local boreholes. For instance, extrapolating below the Rowhurst Rider Marine Band in the Sidway Mill borehole, using the full sequence from the Bitterns borehole, places the Top Namurian at approximately 1500mss to 1600mss, whereas estimates from the regional map lie closer to 1200mss. Despite their limitation, the regional maps do show a general thinning of the coal measures sequence from north to south across the block. We have incorporated this thinning into our estimates of GIIP for PEDL 078-1.

Rather than extrapolate each coal logged in PEDL40-1 and PEDL56-1, we have instead made estimates of average coal thickness within the lower coal sequence (Burnwood to the Bullhurst seams), in a similar manner to our analysis of offshore blocks 110/18 (part) and 110/23 (part) in the Point of Ayr area. We have based these on the average of these seams used in our estimates for the Swallowcroft area, accounting for section thinning observed on the BGS regional maps. We have taken a low case thickness equal to half that of the average of the logged named coals from the Burnwood to the Bullhurst seams in PEDL40-1 and PEDL56-1, (11.58m), and a high case thickness as the average of the logged named coals from the Burnwood to the Bullhurst seams in PEDL40-1 and PEDL56-1 (23.15m), plus a further uplift of 30% - the estimate of unnamed coals logged in the Swallowcroft area. For our mid case, we have taken the average of the low and high cases, before uplift (17.36m).

To determine average gas content, and to review depth cut offs, we have made estimates of the depth to the mid-point of the gross coal sequence for each of our net coal thickness estimates discussed above. To determine the gross coal sequence thickness for each of these estimates, we have used the thickness of the gross coal bearing sequence as observed in the Bitterns borehole (Burnwood to the Bullhurst seams) of around 370m. Rounding to an appropriate level of error, we estimate a thickness of the gross coal bearing sequence for each of our net coal estimates as 200m, 300m and 400m for low, mid and high respectively.

Using the BGS map of top Namurian and isopaching up using our high case gross thickness, we estimate an average shallowest mid-point depth of 800mss. Using the BGS top coal measures map and isopaching down using our mid case gross thickness, we estimate an average mid-point depth of around 950mss. Using the results of the Sidway Mill borehole and our low case gross thickness, we estimate an average mid point depth of around 1250mss.

A major north-south trending fault system cuts PEDL 78-1 towards the east: the Adbaston-Sidway-Madley Fault (e.g. IMC 2001). Evidence from the BGS solid geology maps suggests that the throw across this fault is between 300-600m to the east, based on logged sections. Using an average throw of 450m and an average ground elevation of 150m, our estimates of mid point depth suggest that the coal measures may exceed the GIIP depth cut-offs in the hanging wall low (east) of this fault system in our deepest mid point depth estimate.

We have combined our thickness and mid-point depth estimates to generate estimates of GIIP for PEDL78-1, over the 100km2 area of the licence. To simulate differences in fault throw, we have

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Competent Person’s Report: Island Gas Ltd

subdivided the licence into two areas (A and B, Figure 6.1), and made different estimates of gas content for each.

Our low case combines the lowest estimate of net coal, the greatest estimated mid-point depth, and the low case langmuir gas contents. As we estimate a mid-point for our coal stratigraphy greater than 5,000’ below ground level to the east of the fault system in this case, Area B is excluded from our calculations.

The mid case combines the mid estimate of net coal, the mid depth, and the mid case langmuir gas contents. In this case, Area B is above the depth cut-off, and is included in our calculations.

The estimate for the high case combines the high estimate of net coal, plus an uplift of 30% based on the unnamed logged coals in the Swallowcroft area, the shallowest depth, and the high case langmuir gas contents. Again, Area B is above the depth cut-off, and is included in our calculations.

The Westphalian coal measures have not been proved by mining or drilling within PEDL78-1. Furthermore, the Sidway Mill (Maer) borehole demonstrates that coals are not developed within at least some of the Westphalian that is coal bearing within PEDL 40-1 and PEDL 56-1. This borehole data, coupled with structural cross sections generated by Nexen as part of their research into the area, suggest that there is a significant risk that Westphalian coals are not developed within PEDL 78-1 as we have modelled, and have assigned a chance of 50% to this outcome.

Our final GIIP estimates (Gross and net IGL) are tabulated below.

Table 6.1: Estimates of GIIP, PEDL 78-1 (Greater Swallowcroft).

(all figures in Bcf) Gross Net Risk OperatorArea Low Mid High Low Mid High Factor PEDL 78-1 309 874 1794 62 175 359 50% Nexen

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Competent Person’s Report: Island Gas Ltd

7. PEDL 115-1: Greater Swallowcroft

PEDL 115-1 lies to the north west of the City of Birmingham, within the county of Staffordshire, onshore UK (Figure 2.1). Coal exploration has occurred to the east of the licence area, and the Westphalian coals are proven in these boreholes. As far as we can ascertain, no coal mining activity has occurred within the licence area.

The licence PEDL 115 was originally assigned to StrataGas plc on 11th March 2002. Following part relinquishment, title and 100% equity was obtained in PEDL 115-1 by IGL via execution of an option of assignment by StrataGas plc, and was assigned to IGL on 11th February 2005. Operatorship and 80% of the equity in PEDL 115-1 were assigned to Nexen on 9th December 2005. The remaining licence commitment is for one drill or drop well, and the initial term of the licence expires on 31st January 2008. Nexen and IGL are currently seeking an extension to this date. The current licensed area and the UK onshore grid blocks that form PEDL 115-1 are summarised in Table 1.1 of this document.

Geologically, the area under licence is formed by strata of Carboniferous and Permo-Triassic Age. Solid geological maps show the area to be generally dipping from south to north, with a complex of north-south trending normal faults, downthrowing to the west. Available borehole data are concentrated to the east of the licence..

Figure 7.1: Location map: PEDL 115-1 (Greater Swallowcroft), including licence area and the subdivision into Areas A and B is also illustrated. Logged boreholes (i.e. boreholes with data available to us) are also highlighted.

7.1. Database and GIIP Estimation

A number of NCB/CA coal exploration boreholes were available to us, located in the eastern part of the licence, to the east of the Hopton fault (Figure 7.1). In all, we have located and logged six of these boreholes, recording coal thickness and depth where available for all named coal seams between the Bottom Robins and the Deep seams. We have also inspected the oil and gas exploratory borehole Well Yarnfield-1, to cross check our estimates of depth and thickness for the

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Westphalian coal measures to the west of the licence. The logged named coals for the area are tabulated in Appendix 1. Little datum information could be obtained for the boreholes within the area, and we have had to estimate these using the available Ordanance Survey topographic maps for the licence where they were not recorded in the borehole data.

Plotting borehole gas measurements against depth (corrected for lost gas from Creedy 1992) provides a gas content/depth relationship from which to calculate average gas content, and also the uncertainty range in these estimates (Figure 7.2). Average gas contents were found to be in the region of 2 to 7 m3/tonne – the lowest in all the areas we have examined. The coals in 115-1 are described as being of lower rank than those in other licences, which may explain the low gas content. This also suggests that coal rank is likely decrease from PEDL 40-1 and 56-1 (Swallowcroft) south and eastwards towards PEDL 115-1. We have attempted to simulate this in our estimates of gas content for the licence (Area B), and would recommend further study of the variation in rank and hence gas content for other licences in the Greater Swallowcroft area.

At the time of writing, No seismic data were available to us over the block, and we have not determined geological structure.

Figure 7.2: Gas content with depth, PEDL115-1 area A, with low, mid and high estimates using the Langmuir equation.

Due to the limited availability of borehole data in the licence, we have subdivided our estimates into two areas, separated by the Hopton Fault (Figure 7.1). To the east (Area A), GIIP calculation for was undertaken in the manner described in Section 1 of this report, both on a layer average and a grid basis to cross-check the mid case estimate. We chose as an input area the currently licensed acreage to the east of the fault, (58.6km2), assuming coals are present across the entire area.

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Competent Person’s Report: Island Gas Ltd

There are no borehole data available to us west of the Hopton fault in PEDL 115-1. We have therefore adopted a similar methodology to that used for PEDL 78-1, and the offshore blocks 110/18 (part) and 110/23 (part) in the Point of Ayr area. We have made estimates of the average depth for the preserved coal measures we expect in our model within Area B, based on the available geological maps. As with PEDL 78-1, is possible that the coal measures sequence thins from north to south across Area B, and our range of estimates of net coal thickness reflect this.

Rather than extrapolate each coal logged in Area A, we have instead made estimates of average coal thickness (Bottom Robins to the Deep seams). We have taken a low case thickness equal to the thickness of all logged coals greater than or equal to 1m within the Ashflats-1 borehole, which lies to the west of the Hopton fault, but to the south of the licence (7m). Our mid case estimate was taken as the average thickness of all seams greater than 0.6 m as logged in all the available boreholes (17.5m) and a high case the sum of the thickest log coal section, irrespective of seam thickness, as logged in the Devils Dumble borehole (29m).

To determine average gas content, and to review depth cut offs, we have made estimates of the depth to the mid-point of the gross coal sequence for each of our net coal thickness estimates discussed above, including a correction for the throw of the Hopton Fault, which on average is around 400m to the west. Our final low, mid and high depth estimates for the mid-point of the coal sequence in Area B in mss are 1000, 1150 and 1300. Average surface elevation, estimated from the Ordanance Survey topographic maps, is around 100m. On average, area B lies above the depth cut-offs described in section 1 of this report in all our estimates.

Coal rank is uncertain to the west of PEDL 115-1. To account for the impact of this on gas content estimates, we have averaged our low, mid and high estimates of langmuir temperature and pressure constants derived for PEDL 115-1 and PEDL 40-1 and 56-1 to provide hybrid functions for estimate of gas content within Area B. From these, and the average depths above, we estimate low, mid and high gas contents 5, 7.5 and 10 m3/tonne respectively.

We have combined our thickness, mid-point depth and gas content estimates to generate estimates of GIIP for PEDL115-1 Area B, which has an area of 141.4 km2. Our low case combines the lowest estimate of net coal, the greatest estimated mid-point depth, and the low case langmuir gas content from our hybrid functions. The mid case combines the mid estimate of net coal, the mid depth, and the mid case langmuir gas content from our hybrid functions, and the estimate for the high case combines the high estimate of net coal, the shallowest depth, and the high case langmuir gas content from our hybrid functions.

The Westphalian coal measures have not been proved by mining or drilling within Area B of PEDL115-1 within any of the data available to us. As discussed in Section 6 of this report, there is also significant uncertainty as to the presence, depth and thickness of the Westphalian coals to the north and west of the licence. Furthermore, there is uncertainty in the rank and therefore gas content in this area, and there is a chance that this will fall outside the range of gas contents used in our estimates. As a result, we see significant risk to the model we have used for the Westphalian coals within PEDL 115-1 area B, and have assigned a chance of 50% to this outcome, in a similar manner to PEDL 78-1.

Our final GIIP estimates (Gross and net IGL) are tabulated below.

Table 7.1: Estimates of GIIP, PEDL 115-1 areas A and B (Greater Swallowcroft).

(all figures in Bcf) Gross Net Risk OperatorArea Low Mid High Low Mid High Factor PEDL 115-1 B (west) 226 832 1,923 45 166 385 50% NexenPEDL 115-1 A (east) 106 138 361 21 28 72 - Nexen

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Competent Person’s Report: Island Gas Ltd

References

Baker S.G. (1988). Long Hole In-Seam De-Gassification: A Solution to Methane Drainage Enhancement at Silverdale Colliery? NCB Internal Report.

British Coal, (1987), European Communities Commission, "Investigation of Firedamp and Its Emission in Coal Seams", Final Report on ECSC Research

Creedy, D.P. (1992). Printout from the British Coal Seam Gas Content Database. NCB Internal Document.

Freudenberg U (1996) Main factors controlling coalbed methane distribution in the Ruhr District, Germany Geol. Soc. Special Pub. No 109, pp67-88.

Harpalani, S., and R. A. Schraufnagel (1990a) Shrinkage of coal matrix with release of gas and its impact on permeability of coal Fuel, Vol 69, no. 5, pp. 551-556.

Harpalani, S., and R. A. Schraufnagel (1 990b) Influence of matrix shrinkage & compressibility on gas production from coalbed methane reservoirs Proceedings, SPE Chapter 10 408 Annual Technology Conference and Exhibition, New Orleans, La., S vol., pp. 171 -179, SPE # 20729. IMC (2001) UK PEDL78 Reconnaissance Study Into CBM Potential

Kim, A.G. (1977) Estimating methane content of bituminous coalbeds from Adsorption Data. Report of Investigations; Bureau of Mines.

NCB (1986). Interim Geological Report on the 1985 Offshore Exploration Programme, Point of Ayr Colliery. NCB Internal Report.

Scott, A.R, Zhou, N, Levine, J.R. (1995). A Modified Approach to Estimating Coal and Coal Gas Resources: Example from the Sand Wash Basin, Colorado. AAPG Bulletin 79, p1337-1348

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Competent Person’s Report: Island Gas Ltd

Appendix 1: Coals Logged for GIIP calculation

PEDL 40-1/56-1 (SWALLOWCROFT)

10 Foot Coal Bed 5 Foot Coal Bed Banbury Coal Bassey Coal Bed Bellringer Coal Bed Bellringer Topleaf Coal Bed Black Bass Coal Bed Blackband Coal Bed Blackmine Coal Bowling Alley Coal Brickiln Coal Bed Bullhurst Coal Burnwood Coal Bed Cannel Coal Bed Chalkey Coal Bed Cockshead Coal Flatts Coal Great Row Coal Bed Hams Coal Bed Hard Mine Coal Holly Lane Coal Hoo Cannel Coal Bed Moss Cannel Coal Moss Coal Bed Peacock Coal Bed Ragman and Rough 7ft Coal Red Mine Coal Red Shag Coal Bed Rowhurst Bottomleaf Coal Rowhurst Rider Coal Spencroft Coal Bed Spencroft Coal Lower Bed Stafford Coal Bed Winghay Coal Bed Winpenny Coal Yard Coal Bed

Island_Gas_CPR_Rev1_client_relea37 37 9/11/07 19:13:38

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Competent Person’s Report: Island Gas Ltd

PEDL 92-1 (DRAX)

BeestonBeeston Rider Blocking Dull Seam DunsilFenton + Parkgate Flockton Thick Flockton Thin High Hazel Haigh Moor Houghton Thin Kents Thick MeltonfieldMiddleton Eleven Yards NewhillSharlston Sharlston Yard Stanley Main Swallow Wood Swinton Pottery Thorncliffe + Wheatley Lime Warren House + Barnsley Wheatworth Winter

Point of Ayr

Bychton Two Yard DrowsellDurbogFive Yard Hard Fivequarters Lower Stinking PowellSmiths Soft Fivequarters StoneThree Yard Threequarters Two Yard Upper Stinking Warras

Island_Gas_CPR_Rev1_client_relea38 38 9/11/07 19:13:38

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Competent Person’s Report: Island Gas Ltd

PEDL 145 (FOUROAKS)

Crombouke Coal Higher Florida Coal Bed London Delph Coal Lower Florida Coal Bed Peacock Coal Bed Rushy Park Coal Trencherbone Coal Wigan 2 Feet Coal Wigan 4 Feet Coal Wigan 5 Feet Coal St Helens Yard Coal Ince Six Feet Coal Sir John Coal Plodder Coal Haigh Yard Coal Pigeon House

PEDL 115-1

Bass Benches Bottom Robbins Brooch Deep Eight Feet Lower Heathen Lower Stinking New Mine Park ShallowUpper Heathen Upper Stinking Wyrley Yard Yard

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Competent Person’s Report: Island Gas Ltd

Nomenclature

“bbl” means barrel – 42 US gallons “Bcf” means thousands of millions of standard cubic feet “Btu” means British thermal unit “°C” means degrees Celsius “CGR” means condensate gas ratio “CA” means Coal Authority of Great Britain “Eg” means gas expansion factor “°F” means degrees Fahrenheit “FDP” means field development plan “ft” means feet “FTHP” means flowing tubing head pressure “FVF” means formation volume factor “GIIP” means gas initially in place “GDT” means gas down to “GEF” means gas expansion factor “GOC” means gas oil contact “GRV” means gross rock volume “GWC” means gas water contact “Kair” means air permeability “kh” means permeability thickness “km” means kilometres “LNG” means liquefied natural gas “LPG” means liquefied petroleum gas “M” “MM” means thousands and millions respectively “md" or “mD” means millidarcy “MBAL” means material balance computer programme “MDT” means modular dynamic tester “m/s” means metres per second "mss" means metres subsea “N/G” means net to gross ratio “NCB” means National Coal Board of Great Britain “Np” means cumulative oil production “OWC” means oil water contact “PEDL” means petroleum exploration and development licence “Por” or “Phi” means porosity “Proved” means Proved, as defined in Appendix 1 “Probable” means Probable, as defined in Appendix 1 “Possible” means Possible, as defined in Appendix 1 "P" means Proved "P+P" means Proved + Probable "P+P+P" means Proved + Probable +Possible “P100” means 100 per cent probability “P99” means 99 per cent probability

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Competent Person’s Report: Island Gas Ltd

"P90" means Proved "P50" means Proved + Probable "P10" means Proved + Probable +Possible “P1” means one per cent probability “P0” means zero per cent probability “P/Z” means pressure divided by gas deviation factor (material balance) “rcf” means cubic feet at reservoir conditions “Rt” means true resistivity “scf” means standard cubic feet measured at 14.7 pounds per square inch

and 60 degrees Fahrenheit “Sg” means gas saturation “So” means oil saturation “Stb” means 42 US gallons measured at 14.7 pounds per square inch and 60

degrees Fahrenheit “STOIIP” means stock tank oil initially in place “TVDSS” means true vertical depth sub-sea “twt” means two way time “WF” means water-flood “WGR” means water gas ratio “WOR” means water oil ratio “WUT” means water up to

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PART IV

FINANCIAL INFORMATION ON IGL

81

PART IV (a) ACCOUNTANTS’ REPORTON ISLANDGAS LIMITED

Our Reference:

The DirectorsKP Renewables PlcAldermary House10-15 Queen StreetLondon EC4N 1TX

Mazars LLP13 Sheldon Square

LondonW2 6PS

The DirectorsLibertas Capital Corporate Finance Limited16 Berkeley StreetLondonW1J 8DZ

27 November 2007

Dear Sirs

We report on the ¢nancial information (‘the Financial Information’) set out below on Island Gas Limited(‘IGL’), which has been prepared for inclusion in the AIM admission document (‘the Document’) dated27 November 2007 of KP Renewables Plc (‘the Company’) on the basis of the principal accounting policiesset out in Note 1 to the Financial Information. This report is required by Schedule Two of the AIM Rulesand is given for the purpose of complying with that schedule and for no other purpose.

ResponsibilitiesThe Directors of the Company are responsible for preparing the Financial Information on the basis set outbelow and in accordance with applicable International Financial Reporting Standards.

It is our responsibility to form an opinion as to whether the Financial Information gives a true and fair view,for the purposes of the Document, and to report our opinion to you.

Basis of opinionWe conducted our work in accordance with Standards for Investment Reporting issued by the AuditingPractices Board in the United Kingdom. Our work included an assessment of evidence relevant to theamounts and disclosures in the Financial Information. It also included an assessment of signi¢cant estimatesand judgements made by those responsible for the preparation of the Financial Information underlying the¢nancial statements and whether the accounting policies are appropriate to the entity’s circumstances,consistently applied and adequately disclosed.

We planned and performed our work so as to obtain all the information and explanations which weconsidered necessary in order to provide us with su⁄cient evidence to give reasonable assurance that theFinancial Information is free from material misstatement whether caused by fraud or other irregularity orerror.

OpinionIn our opinion the Financial Information gives, for the purposes of the Document dated 27 November 2007,a true and fair view of the state of a¡airs of IGL as at the dates stated and of its pro¢ts and cash £ows for theperiods then ended in accordance with the basis of preparation set out below and in accordance withapplicable International Financial Reporting Standards and has been prepared in a form that is consistentwith the accounting policies adopted by the Company.

DeclarationFor the purposes of paragraph (a) of Schedule Two of the AIM Rules, we are responsible for this report aspart of the Document and declare that we have taken all reasonable care to ensure that the informationcontained in this report is, to the best of our knowledge, in accordance with the facts and contains no

82

omission likely to a¡ect its import. This declaration is included in the Document in compliance with ScheduleTwo of the AIMRules.

Yours faithfully

Mazars LLPChartered Accountants

83

INCOME STATEMENTSThe Income Statements of IGL for the 14 month period ended 31 December 2004 and for each of the twoyears ended 31 December 2006 are set out below:

Notes2004»’000

2005»’000

2006»’000

Revenue 1(e), 2 69 2 596Cost of sales 4 (44) (259) (480)

Gross pro¢t/(loss) 25 (257) 116Administrative expenses (22) (48) (50)Exceptional gain on sale of intangible explorationand evaluation assets 8 ç 380 ç

Operating pro¢t 3 3 75 66Finance income 6 1 3 16

Pro¢t on ordinary activities before tax 4 78 82Taxation 7 ç (29) (17)

Retained pro¢t for the period 4 49 65

84

BALANCE SHEETSThe Balance Sheets of IGL at 31 December 2004, 2005 and 2006 are set out below:

Notes2004»’000

2005»’000

2006»’000

Non-current AssetsIntangible exploration and evaluation assets 8 ç ç 14

Current AssetsTrade and other receivables 9 8 195 33Cash and cash equivalents 17 100 697 227

108 892 260Current LiabilitiesTrade and other payables 10 (15) (721) (50)Current taxation liabilities ç (29) (17)

(15) (750) (67)

Net Current Assets 93 142 193

Non-Current LiabilitiesDeferred tax liabilities 11 ç ç ç

Net Assets 93 142 207

Total Assets 108 892 274

Capital and Reserves (including non-equityinterests)Called up share capital:Ordinary Shares 13 1 1 1Preference Shares 13 44 44 44Share premium account 13 44 44 44Pro¢t and loss account 14 4 53 118

Shareholders’ Funds 15 93 142 207

85

CASH FLOWSTATEMENTThe Cash Flow Statements of IGL for the 14 month period ended 31 December 2004 and for each of the twoyears ended 31 December 2006 are set out below:

Notes2004»’000

2005»’000

2006»’000

Reconciliation of operating pro¢t to net cash £owfrom operating activitiesOperating pro¢t 3 75 66Exceptional gain on sale of intangible explorationand evaluation assets 8 ç (380) ç(Increase)/decrease in trade and other receivables (8) (187) 162Increase/(decrease) in trade and other payables 15 706 (671)

Net cash in£ow/(out£ow) from operating activities 10 214 (443)Interest received 16 1 3 16Taxation paid ç ç (29)Expenditure on exploration and evaluation assets 16 ç (151) (14)Proceeds from disposal of Intangible explorationand evaluation assets 8 ç 531 ç

Cash in£ow/(out£ow) before ¢nancing 11 597 (470)Financing 89 ç ç

Increase/(decrease) in cash in the period 100 597 (470)

Reconciliation of net cash £ow to movements in netfundsIncrease/(decrease) in cash in the period 17 100 597 (470)Net funds beginning of period 17 ç 100 697

Net funds at 31 December 17 100 697 227

86

NOTES TOTHE FINANCIAL INFORMATION

1. ACCOUNTING POLICIESa. Basis of Preparation of Financial InformationThe ¢nancial information has been prepared under the historical cost convention in accordance withInternational Financial Reporting Standards and International Accounting Standards, adopted for use bythe European Union (‘‘IFRS’’), and on the going concern basis.

The Company ¢nancial statements are presented in Sterling and all values are rounded to the nearestthousand except when otherwise indicated.

b. Joint VenturesLicence interests are all held jointly with others under arrangements whereby unincorporated and jointlycontrolled Joint Ventures are used to explore, evaluate and ultimately develop and produce its gas interests.Accordingly, IGL accounts for its share of assets, liabilities income and expenditure of Joint Ventures inwhich IGL holds an interest, classi¢ed in the appropriate Balance Sheet and Income Statement headings,except where its share of such amounts remain the responsibility of another party in accordance with theterms of the carried interests as described at 1(f) below.

c. Signi¢cant Accounting Judgements and EstimatesCritical judgements in applying IGL’ accounting policies

IGL invests in the exploration, evaluation, development and production of gas from the UK. The assessmentof the production rates to be derived from such expenditure is a matter of judgement, as is the forecasting ofthe future economic bene¢t that may be derived from such production. Finally, the period of time over whichthe economic bene¢t associated with the expenditure will arise is also a matter of judgement. Thesejudgements a¡ect the carrying value of non current assets and impairment computations related to suchassets.

Estimates and assumptionsThe key assumptions concerning the future and other key sources of estimation uncertainty at the balancesheet date, that have a signi¢cant risk of causing a material adjustment to the carrying amounts of assets andliabilities within the next ¢nancial year are discussed below:

Current Taxes

IGL is subject to the provisions of income taxes. Signi¢cant judgment is required in determiningprovision for income taxes. There are many transactions and calculations for which the ultimate taxdetermination is, in the ordinary course of business, uncertain. IGL recognizes liabilities for taxationissues which are open at the year end on the basis of whether it is more likely than not that a liabilitywill ultimately crystallise. Where the ¢nal tax outcome of such matters is di¡erent from the amountsthat were initially recorded, such di¡erences will impact the income tax and deferred tax provisions inthe period in which such determination is made. None of IGL’ tax computations have yet beenformally signed o¡ by the revenue authorities.

d. Exceptional ItemsExceptional items are those not considered to be part of the normal operation of the business. Such items areidenti¢ed as exceptional and a full explanation is given in the notes to the ¢nancial statements.

e. RevenueRevenue comprises the invoiced value of goods and services supplied by IGL, net of value added tax andtrade discounts. Revenue is recognised in the case of gas sales when goods are delivered and title has passedand in the case of services rendered only once a legally binding contract is in place when amounts billed forservices to be delivered over a period of time are accounted for evenly over that time period.

f. Non-Current Assets (Intangible exploration and evaluation assets and property, plant and equipment)Intangible exploration and evaluation assets

IGL accounts for exploration and evaluation costs in compliance with the requirements of IFRS 6‘Exploration for and Evaluation ofMineral Resources’ as follows:

87

. Exploration and evaluation assets are carried at cost less any impairment and are not depreciated oramortised.

. Expenditures recognised as exploration and evaluation assets comprise those related to acquisition ofrights to explore; topographical, geological, geochemical and geophysical studies; exploratory drilling(including coring and sampling); activities in relation to evaluating the technical feasibility andcommercial viability of extracting gas (including appraisal drilling and production tests); any landrights acquired for the sole purpose of a¡ecting these activities.

. Expenditures not recognised as exploration and evaluation assets include those related to developmentand production costs and any costs incurred prior to obtaining the legal rights to explore an area; whichlatter costs are expensed immediately to the Income Statement.

. Tangible assets acquired for use in exploration and evaluation activities are classi¢ed as property, plantand equipment, interests in oil and gas properties. However, to the extent that such tangible assets areconsumed in developing an intangible exploration and evaluation asset, the amount re£ecting thatconsumption is recorded as part of exploration and evaluation asset costs.

. Expenditures recognised as exploration and evaluation assets are initially accumulated and capitalisedby reference to appropriate geographic areas, which may not be larger than a business segment,currently the entirety of IGL’s UK gas business.

. Expenditures recognised as exploration and evaluation assets are transferred to property plant andequipment, interests in oil and gas properties when technical feasibility and commercial viability ofextracting gas is demonstrable. Exploration and evaluation assets are assessed for impairment (on thebasis described below), and any impairment loss recognised, before reclassi¢cation.

. Expenditures recognised as exploration and evaluation assets are tested for impairment (on the basisdescribed below) whenever facts and circumstances suggest that they may be impaired, which includeswhen a licence is approaching the end of its term and is not expected to be renewed; there are nosubstantive plans for continued exploration or evaluation of an area; IGL decides to abandon an area;whilst development is likely to proceed in an area there are indications that the exploration andevaluation asset costs are unlikely to be recovered in full either by development or through sale. In theevent of goodwill arising on an acquisition being allocated to exploration and evaluation assetsimpairment is tested for at least annually.

. Net proceeds from any disposal of exploration and evaluation assets are initially credited againstpreviously capitalised costs, with any surplus proceeds being credited to the Income Statement.

Property, plant and equipment, interest in oil and gas properties

Property plant and equipment interests in oil and gas properties are those assets, which have been assessedfor economic recoverability and are accounted for as follows:

. Expenditure relating to evaluated properties is depleted on a unit-of-production basis, commencing atthe start of commercial production. The depletion charge is calculated according to the proportion thatproduction bears to the recoverable reserves for each property.

. IGL’s property plant and equipment, interests in oil and gas properties are assessed for indications ofimpairment whenever events or changes in circumstances indicate that the carrying value of an assetmay not be recoverable, when impairment is computed on the basis as set out below. Any impairmentin value is charged to the Income Statement as additional depreciation.

. Net proceeds from any disposal of development/producing assets are compared to the previouslycapitalised cost for the relevant asset or group of assets. A gain or loss on disposal of a development/producing asset is recognised in the Income Statement to the extent that the net proceeds exceed or areless than the appropriate portion of the net capitalised costs of the asset or group of assets.

Impairment

Impairment reviews, when required as described above, are carried out on the following basis:

. By comparing the sum of any amounts carried as exploration and evaluation assets and as propertyplant and equipment, interests in oil and gas properties as compared to the recoverable amount.

. The recoverable amount is the higher of an asset’s fair value less costs to sell and its value in use. IGLgenerally relies on fair value less cost to sell assessed either by reference to comparable market

88

transactions between a willing buyer and a willing seller or on the same basis as standardly used bywilling buyers and sellers.

. Where there has been a charge for impairment in an earlier period that charge will be reversed in a laterperiod where there has been a change in circumstances to the extent that the recoverable amount ishigher than the net book value at the time. In reversing impairment losses, the carrying amount of theasset will be increased to the lower of its original carrying value or the carrying value that would havebeen determined (net of depletion) had no impairment loss been recognised in prior periods.

Decommissioning

Where appropriate costs relating to decommissioning of gas assets are recognised when the related facilitiesare installed; the amount recognised is discounted to its present value and is re£ected in IGL’s non-currentliabilities. A corresponding asset is included in IGL’s property plant and equipment, interest in oil and gasproperties. The asset is depleted in accordance with IGL’s policy on depletion.

Carried Interests

Where IGL has entered into carried interest agreements, no amounts are recorded in the accounts whereexpenditure incurred under such agreements is not refundable. Where expenditure is refundable, out of whatwould but for the carry agreements have been IGL’s share of production, IGL records amounts as non-current assets, with a corresponding o¡set in current liabilities or non-current liabilities, as appropriate, butonly once it is apparent that it is more likely than not that future production will be adequate to result in arefund under the terms of any carry agreement; when IGL records refunds to the extent expected to berepayable.

Non oil and gas related property plant and equipment

Other property plant and equipment is stated at net book value, i.e. cost less depreciation. Depreciation isprovided at rates calculated to write o¡ the cost of ¢xed assets, less their estimated residual values, over theirestimated useful lives at the following rates, with any impairment being accounted for as additionaldepreciation:

Computer equipment ç over three years on a straight line basisFurniture and ¢xtures ç over ¢ve years on a straight line basisLeasehold property improvements ç over the period of the lease

IGL takes directly to the Income Statement costs of minor other property plant and equipment.

g. Financial InstrumentsTrade and Other Receivables

Trade receivables are recognised when invoiced and are carried at the original invoiced amount less anyallowances for doubtful debts. Other receivables are recognised and measured at nominal value.

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and cash held on current account or on short-termdeposits at variable interest rates with maturity periods of up to 3 months. Any interest earned is accruedmonthly and classi¢ed as interest income within ¢nance income.

Trade and other payables and current taxation liabilities

These liabilities are all non interest bearing and so are measured at cost

Operating leases

Rentals under operating leases are charged to the Income Statement in the year in which they become due.

h. TaxationThe tax expense represents the sum of current tax and deferred tax.

The current tax is based on taxable pro¢t for each period. Taxable pro¢t di¡ers from net pro¢t as reported inthe Income Statement because it excludes items of income or expense that are taxable or deductible in otheryears and it further excludes items that are never taxable or deductible. IGL’s liability for current tax iscalculated using tax rates that have been enacted or substantively enacted by the Balance Sheet date.

89

Deferred tax is recognised in respect of all temporary di¡erences that have originated but not reversed at thebalance sheet date. Temporary di¡erences arise from the inclusion of items of income and expenditure intaxation computations in periods di¡erent from those in which they are included in the ¢nancial statements.Deferred tax liabilities are not discounted. Deferred tax assets are recognised to the extent that it is regardedas more likely than not that there will be suitable taxable pro¢ts from which the underlying temporarydi¡erences can be deducted.

i. EquityEquity instruments issued by IGL are recorded at the proceeds received, net of direct issue costs, andallocated between called up share capital and share premium accounts as appropriate.

2. REVENUE AND SEGMENT INFORMATIONAll revenue which represented turnover arose within the United Kingdom and is attributable to activities inthe Coal BedMethane (CBM) sector.

3. OPERATING PROFIT2004»’000

2005»’000

2006»’000

Operating pro¢t is stated after charging:Auditors remuneration 9 9 16

4. EMPLOYEE INFORMATION2004»’000

2005»’000

2006»’000

Sta¡ costs comprised:Wages and salaries ç 20 337Pension contributions ç ç ç

ç 20 337Capitalised ç ç (3)

ç 20 334

No. No. No.

The average number of employees in the period comprised:Services 2 2 2Administrative 1 1 1

3 3 3

5. DIRECTORS’ EMOLUMENTS2004»’000

2005»’000

2006»’000

Directors’ emoluments and bene¢ts comprised:Directors’ emoluments ç 20 300Pension contributions ç ç ç

ç 20 300

The highest paid director received emoluments and bene¢ts asfollows:Emoluments ç 8 100Pension contributions ç ç ç

ç 8 100

90

6. FINANCE INCOME2004»’000

2005»’000

2006»’000

Interest received comprised:Bank interest 1 3 16

7. TAXATION2004»’000

2005»’000

2006»’000

UK corporation tax:Current tax on income for the period ç 29 16Adjustments in respect of prior periods ç ç 1

Total UK taxation ç 29 17

Deferred tax:Current tax on income for the period ç ç ç

ç 29 17

Factors a¡ecting the tax charge

The tax assessed for each period does not re£ect a charge equivalent to the pro¢t on ordinary activitiesmultiplied by the standard rate of corporation tax in the United Kingdom of 19 per cent. (2004 and 2005:19 per cent.), for small companies. The di¡erences are explained below:

2004»’000

2005»’000

2006»’000

Pro¢t on ordinary activities before tax 4 78 82

Pro¢t on ordinary activities multiplied by the standard rate ofcorporation tax in the UK for small companies (19%) 1 15 15Tax e¡ect of expenses not allowable for tax purposes ç 4 1Movement on un-provided deferred tax balance ç 10 çE¡ect of nil tax band (1) ç çPrior year adjustment ç ç 1

ç 29 17

91

8. INTANGIBLE EXPLORATIONAND EVALUATIONASSETSCost »’000

At 12 November 2003 and 1 January 2005 çAdditions 151Disposal (151)

At 1 January 2006 çAdditions 14Disposal ç

At 31 December 2006 14

AmortisationAt 12 November 2003 and 1 January 2005 çCharge for the year, including impairment çDisposals ç

At 1 January 2006 çCharge for the year, including impairment çDisposals ç

At 31 December 2006 ç

Net book amountAt 31 December 2006 14

At 31 December 2005 ç

At 31 December 2004 ç

On 9 December 2005, IGL entered into arrangements with Nexen Exploration U.K. Limited (Nexen),whereby Nexen acquired an 80 per cent. interest in each of IGL’s Petroleum Exploration and DevelopmentLicences (the ‘‘Original PEDLs’’) in exchange for »1.25 million. After taking account of costs of »719,000incurred wholly and exclusively to e¡ect the disposal, the net disposal proceeds amounted to »531,000; ofwhich »151,000 was credited to exploration and evaluation assets to eliminate the amount held on theaccount, with the balance of »380,000 being the pro¢t on disposal. The tax e¡ect in relation to the disposalwas a charge of »61,000.

Nexen have also agreed, in certain circumstances, to carry IGL for its share of any expenditure incurred inrelation to IGL’s remaining 20 per cent. interest in the Original PEDLs, up to a total of »5 million. Therepayment to Nexen of any amounts carried under these arrangements is dependent, on a licence by licencebasis, on successful operations yielding su⁄cient production to support repayment in accordance with termsof the carry.

At 31 December 2006 »1,267,000 had been carried (2005 ç »2,000), which has not been recorded as eithernon-current assets or liabilities, since repayment is currently su⁄ciently uncertain.

9. TRADE ANDOTHERRECEIVABLES2004»’000

2005»’000

2006»’000

VAT recoverable ç 181 5Trade debtors 1 14 26Prepayments 7 ç 2

Total due within one year 8 195 33

92

10. CURRENT LIABILITIES2004»’000

2005»’000

2006»’000

Trade and other payablesTrade creditors ç 677 3Taxation and social security ç 8 12VAT payable ç ç çAccruals and other creditors 14 36 35Prepaid fees 1 ç ç

15 721 50

Corporation Tax ç 29 17

11. NON-CURRENT LIABILITIESDeferred TaxationIGL has at 31 December 2006 »65,000 (2005 ç »52,000 and 2004 ç »Nil) of potentially unutilised MineralsExtraction Allowances, the availability of which, to o¡set future pro¢ts, is dependent on IGL commencing aPetroliferous Trade (as such is de¢ned for tax purposes), which itself is dependent on the commencement ofCBM production.

12. COMMITMENTS2004»’000

2005»’000

2006»’000

Exploration and evaluation ç ç çOther 24 ç ç

24 ç ç

As at 31 December 2006 (2005 ç »Nil and 2004 ç »Nil), no amounts have been included for explorationand appraisal as these are expected to be covered by the carry arrangements referred to in Note 8 above. Asat 31 December 2004, IGL had signed an option agreement on 25 March 2004 under which IGL hadoutstanding obligations, relating to licence fees up to anniversary of signing totalling »24,000 (2006 ç »Niland 2005çNil).

13. CALLEDUP SHARECAPITAL AND SHARE PREMIUMACCOUNT2004 2005 2006

Authorised Equity No. »’000 No. »’000 No. »’000

AOrdinary shares of»1 each 1,250 1 1,250 1 1,250 1B Ordinary shares of»1 each 231 ç 231 ç 231 çCOrdinary shares of»1 each 264 ç 264 ç 264 çDOrdinary shares of»1 each 55 ç 55 ç 55 ç

1,800 1 1,800 1 1,800 1

Non-EquityRedeemablepreference shares of»1 each 2,000,000 2,000 2,000,000 2,000 2,000,000 2,000

Total 2,001,800 2,001 2,001,800 2,001 2,001,800 2,001

93

Allotted and Called UpIssued(No.)

2004»’000

2005»’000

2006»’000

Equity

Nominal valueç »1 each

12November

2003

27January

2004

25March2004

16November

2004

19November

2004

23December

2004A Ordinary çHalf rights 1 54 55 ç ç ç 1 1 1

Full rights ç ç ç 275 ç ç ç ç çBOrdinary ç 21 ç ç 105 ç ç ç çCOrdinary ç 24 ç ç 120 ç ç ç çDOrdinary ç ç ç ç ç 13 ç ç ç

1 99 55 275 225 13 1 1 1

Non-EquityRedeemable preferenceShares of »1 each ç ç 44,000 ç ç ç 44 44 44

Total 45 45 45

Share Premium Account2004»’000

2005»’000

2006»’000

Arising on Ordinary Shares 44 44 44

All of the Ordinary and Preference shares are fully paid up and were issued at par, except the 500 Ordinaryshares issued in November 2004, which were issued at »90 each, giving a premium of »89 per share or »44,000in total.

The shareholders who subscribed for the shares issued in November 2004 also made irrevocableundertakings (the Irrevocable Undertakings) to IGL to subscribe for redeemable preference shares givingIGL access to a further up to »834,000, intended to ensure that IGL should have access to su⁄cient ¢nancialcapability to be able to take up PEDL 145, which it did on 19 November 2004. With the sale and carryarrangements made with Nexen on 9 December 2005, IGL now has access to su⁄cient funds to meet, interalia, its obligations under PEDL 145. It had always been intended that the Irrevocable Undertakings wouldbe cancelled should IGL be able to arrange alternative ¢nancing. Accordingly, the Irrevocable Undertakingswere cancelled on 9 December 2005.

The D Ordinary Shares issued in December 2004 carry no votes and do not share in distributions untildistributions to the A shareholders, including distributions made to them in respect of all their othershareholdings in IGL, exceed at least »5 million. Thereafter, distributions due to the A shareholders,including distributions made to them in respect of all their other shareholdings in IGL, were it not for theexistence of the D Ordinary Shares, are to be allocated between the D Ordinary shares and the Ashareholders in the ratio 13 to 100 respectively.

The Preference shares are redeemable by IGL, with the consent of the Preference shareholders, at anytime,and, except to the extent not permitted by the Companies Act 1985, must be redeemed by 11 March 2008, orupon any earlier sale or listing of IGL. The preference shares shall be redeemed in cash at nominal value. ThePreference shareholders are not entitled to participation in the pro¢t of IGL or to vote at any GeneralMeeting of IGL. On liquidation of IGL, the Preference shareholders have priority in receiving the nominalvalue of the shares from the surplus assets of IGL remaining after payment of its liabilities.

14. PROFIT AND LOSS ACCOUNT»’000

At 13 November 2003 çRetained pro¢t for the period 4

At 31 December 2004 4Retained pro¢t for the year 49

At 31 December 2005 53Retained pro¢t for the year 65

At 31 December 2006 118

94

15. RECONCILIATIONOFMOVEMENT IN SHAREHOLDERS’ FUNDS»’000

At 12 November 2003 çOrdinary shares issued 45Preference shares issued 44Retained pro¢t for the period 4

At 31 December 2004 93Retained pro¢t for the year 49

At 31 December 2005 142Retained pro¢t for the year 65

At 31 December 2006 207

16. GROSS CASH FLOWS2004»’000

2005»’000

2006»’000

Returns on investments and servicing of ¢nanceInterest received 1 3 16

Capital expenditureExpenditure on intangible exploration and evaluation assets ç (151) (14)Property, plant and equipment ç ç çSale of non-current assets ç 531 ç

ç (380) (14)

17. CHANGES INNET FUNDS»’000

At 12 November 2003 çCash £ow 100

At 31 December 2004 100Cash £ow 597

At 31 December 2005 697Cash £ow (470)

At 31 December 2006 227

18. SUBSEQUENT EVENTSOn 23 January 2007, IGL and Nexen, as operator, acquired PEDL 107 and, separately, were awarded anO¡shore Licence, SPPL1481, covering four blocks o¡shore from PEDL 107; all together referred to as Pointof Ayr or PofA. IGL holds a 50 per cent. interest in each of the PofA licences. The obligations in relation tothis acreage comprise a drill or drop obligation to drill an investigative well in PEDL 107 and a contingentwell obligation in SPPL 1481.

On 18May 2007 IGL entered into a further carry agreement with Nexen whereby Nexen have also agreed, incertain circumstances, to carry IGL for its share of any expenditure incurred in relation to IGL’s 50 per cent.interest in the PofA licences; with the total amount incurred for IGL’s share of the PofA licences, togetherwith that incurred under the Original PEDLs, not to exceed »5.75 million. The repayment to Nexen of anyamounts carried under the PofA licences is dependent on successful operations yielding su⁄cient productionfrom PofA to support repayment in accordance with terms of the carry.

On 5 July 2007, obligations on IGL’s PEDLs 115 and 116, which had been three drill or drop wells on eachlicence, were reduced to one drill or drop well on each licence.

On 6 September 2007 and 11 September 2007 IGL’s PEDL 78 and PEDL 92, respectively, were eachextended for a further year to 7 September 2008 to give su⁄cient time for completion of certain drillingoperations that will then result in the licences being extended for a minimum of a further 3 years followed byanother 20 or more years thereafter if IGL decides to pursue production from within the acreage.

95

19. RELATED PARTYDISCLOSURETransactions with related partiesDirectors’ interests

The IGL directors are each directors of management consulting companies that provided services to the IGLon an arms length basis during the year ended 31 December 2005 as follows:

Director2004»’000

2005»’000

2006»’000

FGugen ç 242 çAAustin ç 110 çBCheshire ç 106 ç

All of the above services were fully paid for during the year ended 31 December 2005 leaving no amountsoutstanding at 31 December 2006 (2005 and 2004: »Nil).

20. NATUREOF FINANCIAL INFORMATIONThe ¢nancial information on IGL presented above does not constitute statutory accounts as de¢ned by theCompanies Act 1985 (as amended). Statutory accounts for the 14 month period ended 31 December 2004and for the two years ended 31 December 2005 and 2006 have been ¢led with the Registrar of Companies.

96

PART IV (b) INTERIMRESULTSOF IGLThe unaudited interim ¢nancial statements of IGL for the period ended 30 June 2007 are shown below:

CONDENSED PROFIT & LOSS ACCOUNTSUnaudited6 months to

30 June2007»’000

Unaudited6 months to

30 June2006»’000

AuditedYear ended

31December2006»’000

Revenue 391 280 596Cost of sales (307) (214) (480)

Gross pro¢t 84 66 116Administrative expenses (19) (17) (50)

Operating pro¢t 65 49 66Finance income 10 9 16

Pro¢t on ordinary activities before tax 75 58 82Tax on pro¢t on ordinary activities (14) (11) (17)

Retained pro¢t for the period 61 47 65

97

CONDENSED BALANCE SHEETSUnaudited

30 June2007»’000

Unaudited30 June

2006»’000

Audited31December

2006»’000

Non-Current assetsIntangible exploration and evaluation assets 29 8 14

Current AssetsTrade and other receivables 235 10 33Cash and cash equivalents 425 505 227

660 515 260

Total assets 689 523 274

EquityCalled up share capital çOrdinary 1 1 1

ç Preference 44 44 44Share premium account 44 44 44Retained earnings 179 100 118

Total equity 268 189 207

Current liabilitiesTrade and other payables 390 293 51Taxation 31 41 16

421 334 67

Total Equity and Liabilities 689 523 274

98

CONDENSEDCASH FLOWSTATEMENTSUnaudited6 months to

30 June2007»’000

Unaudited6 months to

30 June2006»’000

AuditedYear ended

31December2006»’000

Net cash £ow from operating activitiesOperating pro¢t 65 49 66

65 49 66Movement in working capital(Increase)/decrease in trade and other receivables (202) 185 162Increase/(decrease) in trade and other payables 340 (427) (670)

Net cash in£ow/(out£ow) from operating activities 203 (193) (442)

Investing activitiesInterest received 10 9 16

Net cash from investing activities 10 9 16

Taxation paid ç ç (30)Expenditure on exploration and evaluation assets (15) (8) (14)

Cash in£ow/(out£ow) in the period 198 (192) (470)Net funds beginning of the period 227 697 697

Net funds end of the period 425 505 227

99

NOTES TOTHE INTERIM FINANCIAL INFORMATION1. The interim results are unaudited and do not comprise statutory accounts within the meaning of

Section 240 of the Companies Act 1985. The results for the year ended 31 December 2006 have beenextracted from the restated ¢nancial statements for that year. These restated ¢nancial statements,prepared under IFRS, have been derived from IGL’s statutory ¢nancial statements prepared under UKGAAP and ¢led with the Registrar of Companies. IGL’s statutory ¢nancial statements included anunquali¢ed auditors’ report.

2. The interim results have been prepared in accordance with the accounting policies adopted in therestated ¢nancial statements for the year ended 31 December 2006, which have been prepared underIFRS.

3. As at 30 June 2007 the issued share capital comprised 668 ordinary shares of »1 and 44,000 redeemablepreference shares of »1.

Allotted and Called Up Issued

Equity

12November

2003

27January

2004

25March2004

16November

2004

19November

2004

23December

2004

30 June2007»’000

Nominal valueç »1 eachAOrdinaryç 50% rights 1 54 55 ç ç ç 1

ç 100% rights ç ç ç 275 ç ç çBOrdinary ç 21 ç ç 105 ç çCOrdinary ç 24 ç ç 120 ç çDOrdinary ç ç ç ç ç 13 ç

1 99 55 275 225 13 1

Non-EquityRedeemable preference Shares of »1 each ç ç 44,000 ç ç ç 44

Total 45

Share Premium AccountArising on Ordinary Shares 44

All of the Ordinary and Preference shares are fully paid up and were issued at par, except the500 Ordinary shares issued in November 2004, which were issued at »90 each, giving a premium of »89per share or »44,500 in total.

The shareholders who subscribed for the shares issued in November 2004 also made irrevocableundertakings (the Irrevocable Undertakings) to IGL to subscribe for redeemable preference sharesgiving IGL access to a further up to »834,000, intended to ensure that IGL should have access tosu⁄cient ¢nancial capability to be able to take up PEDL 145, which it did on 19 November 2004. Withthe sale and carry arrangements made with Nexen on 9 December 2005, IGL now has access tosu⁄cient funds to meet, inter alia, its obligations under PEDL 145. It had always been intended thatthe Irrevocable Undertakings would be cancelled should IGL be able to arrange alternative ¢nancing.Accordingly, the Irrevocable Undertakings were cancelled on 9 December 2005.

The D Ordinary Shares issued in December 2004 carry no votes and do not share in distributions untildistributions to the A shareholders, including distributions made to them in respect of all their othershareholdings in IGL, exceed at least »5 million. Thereafter, distributions due to the A shareholders,including distributions made to them in respect of all their other shareholdings in IGL, were it not forthe existence of the D Ordinary Shares, are to be allocated between the D Ordinary shares and the Ashareholders in the ratio 13 to 100 respectively.

The Preference shares are redeemable by IGL, with the consent of the Preference shareholders, atanytime, and, except to the extent not permitted by the Companies Act 1985, must be redeemed by11 March 2008, or upon any earlier sale or listing of IGL. The preference shares shall be redeemed incash at nominal value. The Preference shareholders are not entitled to participation in the pro¢t of IGLor to vote at any General Meeting of IGL. On liquidation of IGL, the Preference shareholders havepriority in receiving the nominal value of the shares from the surplus assets of IGL remaining afterpayment of its liabilities.

100

PART V

FINANCIAL INFORMATION ON THE COMPANY

101

PARTV (a) ACCOUNTANTS’ REPORTONTHECOMPANY

Our Reference:

The DirectorsKP Renewables PlcAldermary House10-15 Queen StreetLondon EC4N 1TX

Mazars LLP13 Sheldon Square

LondonW2 6PS

The DirectorsLibertas Capital Corporate Finance Limited16 Berkeley StreetLondonW1J 8DZ

27 November 2007

Dear Sirs

We report on the ¢nancial information (‘the Financial Information’) set out below on the Company (the‘Company’) and its subsidiaries (together, the ‘‘Group’’), which has been prepared for inclusion in the AIMAdmission Document (‘the Document’) dated 27 November 2007 of the Company on the basis of theprincipal accounting policies set out in Note 1 to the Financial Information. This report is required bySchedule Two of the AIM Rules and is given for the purpose of complying with that schedule and for noother purpose.

ResponsibilitiesThe Directors of the Company are responsible for preparing the Financial Information on the basis set outbelow and in accordance with applicable International Financial Reporting Standards.

It is our responsibility to form an opinion as to whether the Financial Information gives a true and fair view,for the purposes of the Document, and to report our opinion to you.

Basis of opinionWe conducted our work in accordance with Standards for Investment Reporting issued by the AuditingPractices Board in the United Kingdom. Our work included an assessment of evidence relevant to theamounts and disclosures in the Financial Information. It also included an assessment of signi¢cant estimatesand judgements made by those responsible for the preparation of the Financial Information underlying the¢nancial statements and whether the accounting policies are appropriate to the entity’s circumstances,consistently applied and adequately disclosed.

We planned and performed our work so as to obtain all the information and explanations which weconsidered necessary in order to provide us with su⁄cient evidence to give reasonable assurance that theFinancial Information is free from material misstatement whether caused by fraud or other irregularity orerror.

OpinionIn our opinion the Financial Information gives, for the purposes of the Document dated 27 November 2007,a true and fair view of the state of a¡airs of the Company as at the dates stated and of its losses and cash£ows for the periods then ended in accordance with the basis of preparation set out below and in accordancewith applicable International Financial Reporting Standards and has been prepared in a form that isconsistent with the accounting policies adopted by the Company.

DeclarationFor the purposes of paragraph (a) of Schedule Two of the AIM Rules we are responsible for this report aspart of the Document and declare that we have taken all reasonable care to ensure that the information

102

contained in this report is, to the best of our knowledge, in accordance with the facts and contains noomission likely to a¡ect its import. This declaration is included in the Document in compliance with ScheduleTwo of the AIMRules.

Yours faithfully

Mazars LLPChartered Accountants

103

CONSOLIDATED PROFIT AND LOSS ACCOUNTSThe consolidated pro¢t and loss accounts of the Company for the period ended 31 December 2004 and foreach of the two years 31 December 2006, are set out below:

Notes

13m to31December

2004»’000

Year to31 December

2005»’000

Year to31 December

2006»’000

Administrative expenses (221) (1,968) (2,876)

Operating loss on ordinary activities before interest 2 (221) (1,968) (2,876)

Interest receivable 4 ç 30 10Interest payable and similar charges 4 ç (1) ç

Loss on ordinary activities before taxation (221) (1,939) (2,866)Taxation 5 ç ç ç

Loss on ordinary activities after taxation and forthe period 11 (221) (1,939) (2,866)

Loss per share:Basic and diluted (pence)Before exceptional items 3 ç 4 6

The Group had no recognised gains or losses other than the losses for the periods. All activities relate tocontinuing operations.

104

CONSOLIDATED BALANCE SHEETSThe consolidated balance sheets of the Company as at 31 December 2004, and 2005 and 2006 are set outbelow:

Notes

31 December2004»’000

31December2005»’000

31December2006»’000

Fixed assetsGoodwill 6 515 218 ç

Current assetsProject Development Costs ç ç 14Debtors 8 88 1,024 38Cash at bank and in hand 11 1,100 12

99 2,124 64Creditors: amounts falling due within one year 9 (157) (58) (646)

Net current assets/(liabilities) (58) 2,066 (582)

Total net assets 457 2,284 (582)

Capital and reservesShare capital 10 404 466 466Share option reserve 10 ç 244 244Share premium 11 274 3,734 3,734Accumulated losses 11 (221) (2,160) (5,026)

Equity shareholders’ funds 457 2,284 (582)

105

CONSOLIDATEDCASH FLOWSTATEMENTSThe consolidated cash £ow statements of the Company for the period ended 31 December 2004 and for eachof the two years ended 31 December 2006, are set out below:

Notes

31 December2004»’000

31December2005»’000

31December2006»’000

Net cash £ow from operating activities 14 (221) (1,362) (2,658)Increase in project development costs ç ç (14)Decrease in receivables (66) (316) 986Increase in payables 137 (78) 588Shares issued in lieu of payment 1 ç ç

Net cash used in operating activities (149) (1756) (1,098)

Returns on investment and servicing of ¢nanceInterest received ç 30 10Interest paid ç (1) ç

Net cash £ow from returns on investment andservicing of ¢nance ç 29 10

Capital expenditureNet cash acquired with acquisition of subsidiary 14 ç ç

Net cash £ow from capital expenditure and¢nancial investment 14 29 10

Net Cash £ow before ¢nancing (135) (1,727) (1,088)

FinancingProceeds from issue of share capital 95 2,837 çLoan from parent 50 (20) ç

Net cash £ow from ¢nancing 145 2,817 ç

Increase/(decrease) in cash in the period 10 1,090 (1,088)

Reconciliation of net Cash Flow toMovement in Debt(Decrease)/increase in cash in the year 10 1,090 (1,088)Cash £ow from decrease in debt and lease ¢nancing ç ç ç

Change in net funds resulting from cash £ows 10 1,090 (1,088)Net funds brought forward ç 10 1,100

Net funds carried forward 10 1,100 12

106

CONSOLIDATEDRECONCILIATIONOFMOVEMENTS IN SHAREHOLDERS’ FUNDSPeriod to

31December2004»’000

Year to31 December

2005»’000

Year to31 December

2006»’000

Loss for the ¢nancial period after taxation (221) (1,939) (2,866)Increase in share capital ç 3,522 çShare option reserve ç 244 ç

Movement in shareholders’ funds (221) 1,827 (2,866)Opening shareholders’ funds 678 457 2,284

Closing shareholders’ funds 457 2,284 (582)

107

1. ACCOUNTING POLICIESThe Company is registered in England and Wales and incorporated under the Companies Act 1985. TheCompany is a holding company and the Group was established to provide renewable energy services.

This ¢nancial information is presented in pounds sterling because that is the currency in which the Groupoperates.

Basis of PreparationThe ¢nancial information has have been prepared under the historical cost convention and to comply withInternational Financial Reporting Standards.

Basis of ConsolidationThe accompanying consolidated ¢nancial information includes the accounts of the Company and itssubsidiaries for the 13 month period to 31 December 2004, and for each of the two years ended 2006. Inter-company balances and transactions have been eliminated.

GoodwillGoodwill on consolidation represents the excess of the cost of acquisition over the Group’s interest in the fairvalue of the identi¢able assets, liabilities and contingent liabilities of a subsidiary, associate or jointly-controlled entity at the date of acquisition. Goodwill is recognised as an asset and is tested for impairmentannually, or on such other occasions that events change in circumstances indicate that it might be impaired.

Goodwill arising on the acquisition of an associate is included within the carrying value of the associate.Goodwill on the acquisition of subsidiaries and jointly-controlled entities is presented separately in thebalance sheet.

Goodwill arising on acquisitions before the date of transition to IFRS was retained at the previous UKGAAP amounts and re-categorised as an investment on product development, subject to being tested forimpairment.

PensionsThe Group operates de¢ned contribution pension schemes and the pension charge represents the amountspayable by the group to the funds in respect of the period.

LeasingAssets held under ¢nance leases and hire purchase contracts are capitalised in the balance sheet anddepreciated over their useful life. The interest element of the rental obligation is charged to the incomestatement over the period of the lease and represents a constant proportion of the balance of capitalrepayments outstanding.

Rentals under operating leases are charged to the income statement on a straight line basis over the term ofthe lease.

Research and development costsResearch and development costs are only recognised as an asset from the date when it is virtually certain thatthe fuel supply project will commence and that the project is expected to result in future net cash in£ows witha net present value no less than all amounts recognised as an asset.

Financial Instruments

Financial assets and ¢nancial liabilities are recognised on the Group’s balance sheet when the group becomesa party to the contractual provisions of the instrument.

Revenue RecognitionRevenue comprises the value of services supplied by the Group, exclusive of value added tax, in respect ofrenewable energy operations carried out in the year.

108

Share Based PaymentsThe group has applied the requirements of IFRS 2 Share Based Payments, in respect of payments made tocertain employees. Equity settled share-based payments are measured at fair value at the end of grant. Thefair value determined at the grant date of the equity settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Group’s estimate of shares that will eventually vest. Share-based payments, issued on the termination of employment, have been written o¡ immediately.

Fair Value is measured by use of a binomial model adjusted for a volatility factor.

Power Purchasing Contract Development CostsPower purchasing development costs are recognised as pre-contract costs and will be written o¡ against theincome generated under the power purchasing agreements on the basis of power sales to third parties.

Trade receivablesTrade receivables are measured at initial recognition at fair value, and are subsequently measured atamortised cost using the e¡ective interest rate method. Appropriate allowances for estimated irrecoverableamounts are recognised in pro¢t or loss when there is objective evidence that the asset is impaired. Theallowance recognised is measured as the di¡erence between the asset’s carrying amount and the present valueof estimated future cash £ows discounted at the e¡ective interest rate computed at initial recognition.

InvestmentsInvestments are measured at cost, including transaction costs, less any impairment loss recognised to re£ectirrecoverable amounts. An impairment loss is recognised in pro¢t or loss when there is objective evidencethat the asset is impaired, and is measured as the di¡erence between the investment’s carrying amount andthe present value of estimated future cash £ows discounted at the e¡ective interest rate computed at initialrecognition. Impairment losses are reversed in subsequent periods when an increase in the investment’srecoverable amount can be related objectively to an event occurring after the impairment was recognised,subject to the restriction that the carrying amount of the investment at the date the impairment is reversedshall not exceed what the amortised cost would have been had the impairment not been recognised.

Cash and cash equivalentsCash and cash equivalents comprise cash on hand and short term deposits with a maturity of less than threemonths with any qualifying ¢nancial institution.

Financial liabilities and equityFinancial liabilities and equity instruments are classi¢ed according to the substance of the contractualarrangements entered into. An equity instrument is any contract that evidences a residual interest in theassets of the group after deducting all of its liabilities.

Bank borrowingsInterest bearing bank loans, stocking loans and overdrafts are recorded at the proceeds received, net of directissue costs. Finance charges, including premiums payable on settlement or redemption and direct issue costs,are accounted for on an accrual basis in pro¢t or loss using the e¡ective interest rate method and are added tothe carrying amount of the instrument to the extent that they are not settled in the period in which they arise.

Trade payablesTrade payables are initially measured at fair value, and are subsequently measured at amortised cost, usingthe e¡ective interest rate method.

Equity instrumentsEquity instruments issued by the company are recorded at the proceeds received, net of direct issue costs.

Earnings per shareBasic earnings per share is calculated by dividing the amounts or pro¢t attributable to ordinary equityshareholders in the Company by the weighted average number of shares in issue during the period. Dilutedearnings per share is calculated by reference to the e¡ect of dilutive potential ordinary shares. Potential

109

ordinary shares are treated as dilutive when their conversion to ordinary shares would decrease earnings pershare or increase loss per share from continuing operations.

Liquid resourcesThe Group includes short term deposits and bank deposit accounts as part of liquid resources.

2. OPERATING LOSSONORDINARYACTIVITIES BEFORE INTEREST13m to

31December2004»’000

Year to31 December

2005»’000

Year to31 December

2006»’000

Operating Loss on ordinary activities before taxation is statedafter charging:Impairment of investment on product development and write-o¡of related advance commission expenditure 1,088 297 çAggregate directors’ emoluments 48 950 277Auditors’ remuneration audit 4 19 20

3. STAFF COSTS13m to

31December2004No.

Year to31 December

2005No.

Year to31 December

2006No.

EmployeesThe average number of Group employees was:Administration 3 4 2

3 4 2

Sta¡ costs »’000 »’000 »’000

Wages and salaries 43 490 401Social security costs 5 22 28Other pension costs ç 26 31Amounts paid to former directors ç 211 çShare-based payments ç 244 ç

48 993 460

The Group contributes to personal pension schemes on behalf of certain employees. The schemes areadministered independently of the group. The total pension cost, which is charged to the Income Statement,represents contributions payable by the Group and amounted to »30,575 (2005: »25,995, 2004: »Nil).

13m to31December

2004»’000

Year to31 December

2005»’000

Year to31 December

2006»’000

Directors’ remunerationAggregate remuneration 43 469 266Amounts paid to former director ç 211 çShare based payments ç 244 çPension contributions 5 26 11

48 950 277

Highest paid director »’000 »’000 »’000Remuneration 48 159 108Pension contributions 18 26 ç

66 185 108

110

Amounts paid to former directorsDuring the year ended 31 December 2005, »211,026 was paid to former directors, P Taylor, RMcGregor andE Delamer House, all of whom resigned in 2004, following the receipt of funds from the raising of equity¢nance and the admission of the Company’s shares to AIM.

Of the emoluments charged in respect of the directors in 2006, »121,721 was unpaid at 31 December 2006and at the date of the Company Voluntary Agreement.

4. INTEREST13m to

31December2004»’000

Year to31 December

2005»’000

Year to31 December

2006»’000

Bank interest receivable ç 30 10

Interest payable ç 1 ç

5. TAXATIONNo charge to taxation was made in the periods under review due to losses being incurred throughout.

At the 31 December 2006 the Group had a deferred tax asset (using a tax rate of 30 per cent.) ofapproximately »1,500,000 (2005: »648,000; »2004: »66,000), which has not been recognised due to thecurrent uncertainty of future pro¢ts. Upon the commencement of trading and generation of pro¢ts, this assetis expected to be recognised.

6. NON-CURRENTASSETSInvestmenton product

development»’000

CostAt 11 December 2003 çAdditions 515On disposal ç

At 31 December 2004, 2005 and 2006 515

ImpairmentAt 11 December 2003 and 31 December 2004 çCharge for the period 297On disposal ç

At 31 December 2005 297Charge for the period 218On disposal ç

At 31 December 2006 515

Net book valueAt 31 December 2006 ç

At 31 December 2005 218

At 31 December 2004 515

The investment on product development of »514,791 arose on the purchase of KP Renewables (Operations)Limited on 31March 2004.

During the year ended 31 December 2005, following a review of its portfolio of power purchase agreements,the board decided not to renew the contract with Centrico to supply 200 mega watts of power. The result ofthis was an impairment loss of »296,995.

111

During the year ended 31 December 2006, the board concluded that the power purchase agreements nolonger had any value to the Group. The result of this was a further impairment charge of »217,796.

The impairment losses have been charged within administration expenses.

7. INVESTMENTS

NameParentCompany

Country ofIncorporation

PrincipalActivity

E¡ectiveproportionof shares held

KPRenewables (Operations)Limited

KP Renewables Plc England Holding Company 100%

KP Bioenergy HoldingLimited

KP Renewables (Operations)Limited

England Holding Company 100%

KPWind Holdings Limited KP Renewables (Operations)Limited

England Holding Company 100%

KP Snodland Power Limited KP Bioenergy HoldingLimited

England Renewable Energy 100%

KP Crayford Power Limited KP Bioenergy HoldingLimited

England Renewable Energy 100%

North OtterWindfarmLimited

KPWind Holdings Limited England Renewable Energy 100%

LephinmoreWindfarmLimited

KPWind Holdings Limited England Renewable Energy 100%

Of these companies, only KP Renewables (Operations) Limited had incurred expenses at 31 December 2006.The other subsidiaries all had an issued share capital of »2 represented by either cash or amounts due fromparent undertaking.

8. TRADE ANDOTHERRECEIVABLES31December

2004»’000

31December2005»’000

31December2006»’000

Other debtors 14 57 çPrepayments 62 925 8Other receivables 12 42 30

88 1,024 38

The payment of »925,455, carried forward at 31 December 2005, included non-refundable advancecommission expenditure on projects in developments, amounting to »870,000. This was written o¡ in 2006,the Group having failed to both commence projects to generate power under the related contracts and alsoraise new ¢nance to commence such projects.

9. TRADE ANDOTHER PAYABLES31December

2004»’000

31December2005»’000

31December2006»’000

Loan from parent 20 ç 5Accrued expensesç parent undertaking 45 ç çAccrued expensesç fellow subsidiary undertaking 37 ç çAccruals and other payables 55 58 641

157 58 646

112

10. SHARECAPITAL31December

2004»’000

31December2005»’000

31December2006»’000

Authorised2004: 75,000,000 ordinary shares of 1p each;2005 & 2006: 100,000,000 share of 1p each 750 1,000 1,000

Allotted, called up and fully paid2004: 40,446,374 ordinary shares of 1p each; 2005 & 2006:46,589,662 ordinary shares of 1p each 404 466 466

Shareholder EntitlementAll shares rank equally in respect of all shareholder rights.

Share Options andWarrantsAt 31 December 2006 the Company had the following unexercised share options:

Granted under the Company Share Option Plan

Number Price Exercise Dates600,000 1p 17 June 2004 to 16 June 2009850,000 1p 5 July 2006 to 4 January 2010

Warrants granted to a Supplier200,000 125p 29 July 2005 to 28 July 2010

The options for 1,450,000 shares were granted to directors on their resignation and were charged to theIncome Statement in full in 2005.

The options were valued on the basis of the market price at the time the option was granted and werecalculated using the binominal method with a 75 per cent. volatility, covering the period to exercise cessationdate. The expected volatility was estimated on the basis of the share price history subsequent to £oatation.The risk free interest rate was assessed at the yield on a gilt edged security with a maturity term of either 5 or10 years, with the further assumption of no dividend yield. The options were valued at prices up to 17.2p pershare, the charge for the year ended 31 December 2005 being »244,000.

11. RECONCILIATIONOFMOVEMENT IN SHAREHOLDERS’ FUNDS

ShareRedemption &

Premium

ShareCapital»’000

Pro¢t & lossaccountCapital»’000

Total»’000

Balance at 11 December 2003 274 404 ç 678Loss for the period ç ç (221) (221)

Balance at 31 December 2004 274 404 (221) 457

Loss for the year ç ç (1,939) (1,939)Increase in share capital 3,704 62 ç 3,766

Balance at 31 December 2005 3,978 466 (2,160) 2,284

Loss for the year ç ç (2,866) (2,866)

Balance at 31 December 2006 3,978 466 (5,026) (582)

12. RELATED PARTY TRANSACTIONSPeriod to 31December 2004

On 31 March 2004, the Company acquired KP Renewable (Operations) Limited from KwikpowerInternational plc, the Company’s parent undertaking, for »345,000, issuing 34,500,000 ordinary shares of 1peach at par.

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During the period ended 31 December 2004, KP Renewables (Operations) Limited incurred costs totallingapproximately »7,000 in connection with a services agreement with Kwikpower International plc. Thisagreement provided for the services of inter alia, Dr James Watkins, a director of the Company. Thisagreement was terminated on 30 April 2004 and replaced by an agreement between the Company andKwikpower International plc. At 31 December 2004, the liability had been settled in full.

During the period ended 31 December 2004, the Company was charged »64,000 by Kwikpower Internationalplc in respect of management charges, in accordance with a service agreement which commenced on 1 May2004. At 31 December 2004, »44,740 remained outstanding. This agreement provided for the services of,inter aliaDr JWatkins, a director of the Company.

During the period ended 31 December 2004, the Company was charged »35,000 by a fellow subsidiaryundertaking, Kwikpower Management Services Limited in respect of rental of o⁄ces. Other charges resultedin »36,647 remaining outstanding as at 31 December 2004.

During the period ended 31 December 2004, CO2e, a company in which Mr Steve Durmmond, a non-executive director of the Company since 5 May 2004, charged the Company »250,000, which monies werepayable on the Company’s admission on AIM. In addition, as noted in note 10, shares with a value of»500,000 were to be issued to CO2e on the Company’s admission to AIM.

During the period ended 31 December 2004, Partner Capital Limited (formerly Crosby & Partners), acompany in which Mr Peter O’Kane, a non-executive director of the Company from 5 May 2004 to18 August 2004, charged the Company »201,500, which monies were payable on the Company’s admissionto AIM.

During the period ended 31 December 2004, Kwikpower International plc loaned the Company »50,000 onan interest free, unsecured basis, repayable on the Company’s successful raising of equity ¢nance. On31 December 2004, »30,000 of this loan was converted into 3 million ordinary shares of 1p each, issued atpar, these shares were subsequently transferred to an external third party. At 31 December 2004, »20,000remained outstanding.

Kwikpower International plc entered into an agreement with a creditor of the Group whereby it agreed totransfer shares to the value of approximately »87,000 in full settlement of the debt due to the creditor by theGroup. This amount will be re-charged to the Group. These costs arose in connection with entering into aframework power purchase agreement. Furthermore, Kwikpower International plc transferred further salesto the creditor with a value of »50,000 in respect of services to be provided by this creditor to the Group.

Year Ended 31December 2005

The Company was charged »166,417 by Kwikpower International plc in respect of management charges, inaccordance with a service agreement, which commenced on 1 May 2004. At 31 December 2005, nil remainedoutstanding. This agreement provided for the services of, inter aliaDr JWatkins, a director of the Company.

CO2e.com Limited charged the Company »250,000, which monies were paid on 9 August 2005, following theCompany’s admission to AIM. In addition, shares with a total value of »500,000, were issued to CO2e.comLimited. Mr Steve Drummond, then a non-executive Director of the Company, was a director of and ashareholder in CO2e.com Limited.

Partner Capital Limited (formerly Crosby & Partners), a company related to Mr Peter O’Kane, charged theCompany »201,500, which monies became payable on the Company’s admission to AIM. Of this sum abalance of »120,900 has not been paid, but, as such, is included within contingent liabilities (see note 17).Mr O’Kane is a past non-executive director of the Company.

During the year ended 31 December 2005, the Company was charged »30,950 by Lindley AssociatesLimited, in respect of consultancy services to the Company by Dr D Lindley OBE, a non-executive directorof the Company and a director of Lindley Associates Limited.

Year Ended 31December 2006

During the year the Company was charged »132,500 by Kwikpower International plc, prior to the death ofDr JWatkins, under the arrangement referred to above.

Prior to the death of Dr JWatkins the Company had advanced funds of »35,000 to Kwikpower Internationalplc and also incurred expenses on behalf of the Company of »34,131. These sums have not been repaid. Thedirectors consider there to be serious doubts over the recoverability of these funds and accordingly have

114

made full provision in the ¢nancial statements. The directors will however make every e¡ort to seek fullrecovery of the sums due.

During the year the Company was charged »21,276 by Wellman Engineering Limited, which is a subsidiaryof Kwikpower International plc. The full balance was unpaid at the year end.

13. PARENTUNDERTAKINGANDCONTROLLING PARTYAt 31 December 2006 the Company’s immediate parent undertaking was Kwikpower International plc, acompany incorporated in Gibraltar. The ultimate controlling party was the estate of Dr J Watkins. Withe¡ect from 10 April 2007 there was no controlling party.

14. RECONCILIATION OF OPERATING PROFIT TO NET CASH FLOW FROM OPERATINGACTIVITIES

13m to31December

2004»’000

Year to31 December

2005»’000

Year to31 December

2006»’000

Operating loss on ordinary activities before interest (221) (1,968) (2,876)Impairment loss ç 297 218Share based payments ç 244 çAdministration costs paid by issue of shares ç 65 ç

Net cash out£ow from operating activities (221) (1,362) (2,658)

15. CONTINGENT LIABILITIESOn 10 April 2007 each of the matters referred to below became subject to the terms of the CVA, details ofwhich are given in Note 17.

Under the terms of an agreement entered into on 2 December 2004, between the Company and PartnerCapital Limited (formerly Crosby Partners Limited), the balance of commission fees outstanding, up to amaximum amount of »120,900, may become payable from additional funds raised from any sourcesubsequent to the admission to AIM in July 2005.

Under the terms of an agreement between Mr RMcGrigor, a former director of the Company, who resignedon 10 August 2004, an amount of »9,002 may become payable, for past services as a director, contingent onthe successful raising of additional funds subsequent to the admission to AIM in July 2005.

Under the terms of an agreement between the Company andMr P Taylor, a former director of the Companywho resigned on 10 August 2004, an amount of »12,602 may become payable, for past services as a director,contingent on the successful raising of additional funds subsequent to the admission to AIM in July 2005.

Following successfully raising of equity ¢nance by the Company a further payment, in the amount of»10,000, may become payable to Mr P Carey, a former director of the Company who resigned on28 February 2005, for past services as a director.

In 2006 the Company was noti¢ed of a claim against Kwikpower International plc by CO2e.com Limited. Ithas been asserted by CO2e.com Limited that the Company is jointly and severally liable in respect of thisclaim. The amount claimed by CO2e.com Limited to be due was »250,000. CO2e.com Limited has alsoasserted that the Company will be jointly and severally liable with Kwikpower International plc for a furtherclaim which will not be determinable and which will not fall due until January 2007 at the earliest, but whichis currently estimated at »380,000. The Company has received legal advice that it has no such joint andseveral liability in relation to either claim.

Under such arrangements the Company had agreed to pay brokerage fees to Kwikpower International plc,as a percentage of revenue earned under its power purchase agreements, to a maximum value of »250,000.

The Company has issued a letter of support to enable one subsidiary to continue to trade as a going concern.

16. POST BALANCE SHEET EVENTSUnder the terms of a CVA agreed at meetings of the Company’s creditors and shareholders on 10 August2007, creditors will receive either a payment of 4p in the » to be paid in cash or, at the option of individualcreditors, a cash payment of 2p in the » plus an allotment of new ordinary shares to the equivalent value of 2p

115

issued at par. Creditors who choose the cash and share alternative will be entitled to annual dividends to bepaid by the CVA Supervisor which will represent 60 per cent. of the net proceeds generated from the thenexisting projects of the company earned over the ¢rst three years following the CVA, subject to a maximumof 100 per cent. of each creditor’s claim under the CVA.

At an Extraordinary General Meeting of the Company held on 10 April 2007, special resolutions werepassed by the shareholders of the Company to sub-divide the then existing ordinary shares of the Companyof 1p each into one new ordinary share of 0.05p and one deferred share of 0.95p, and to consolidateimmediately these new ordinary shares on a 1 for 20 basis so that the nominal value of the shares in theCompany was 1p once more. This consolidation reduced the number of shares in the Company in issue from46,589,662 to 2,329,483.

Conditional on the above the Company completed a placing issuing 75,000,000 shares at 1p per share,raising »750,000 before expenses. Costs of »65,000 were settled by the issue of 6,500,000 shares, taking thenumber of shares in issue to 83,829,483.

On 2 November 2007 the Supervisor of the Company’s CVA reached agreement with all of the Company’screditors who have proved in the CVA.

Pursuant to the CVA, the Company approved the payment to the creditors of »23,603.08, and the allotmentto the creditors of 832,127 new ordinary shares of 1p par value in the Company (the ‘‘New Shares’’). TheNew Shares rank pari passu with the existing ordinary share capital of the Company.

On 27 November 2007, the Company disposed of all of its existing businesses to its subsidiary, KPWind andBiomass Limited. The disposal is conditional upon the approval of creditors as part of the CVA variationproposals.

17. DERIVATIVES ANDOTHER FINANCIAL INSTRUMENTSThe Group ¢nancial instruments comprise bank accounts and various items such as trade receivables andpayables that arise directly from its operations. The group does not enter into any derivative transactionsand has minimal exposure to exchange rate movement as its trade takes place entirely within the UnitedKingdom.

At the year end the group held only a current bank account.

The fair value of the group’s ¢nancial assets and liabilities at 31 December 2006 is as stated in the balancesheet at that date.

18. NEW STANDARDS AND INTERPRETATIONSNew standards and interpretations:

IFRS7 Financial instruments disclosureIFRS8 Operating segmentsIFRIC7 Applying the restatement approach under IAS29IFRIC8 Scope of IFRS2 Share based paymentsIFRIC9 Reassessment of embedded derivativesIFRIC10 Interim ¢nancial reporting and impairmentIFRIC11 Group and treasury share transactionsIFRIC12 Service concession arrangements

Revisions of Existing Standards

The Directors do not expect the new standards and interpretations, or the revisions to existing standards, tohave any impact on the primary ¢nancial statements. However:

IFRS7 This standard will require additional disclosures concerning the Group’s and Company’s¢nancial instruments, to enable the users of the ¢nancial statements to appreciate the ¢nancialrisks to which the Group and the company are subject. This standard is e¡ective for accountingperiods beginning on or after 1 January 2007.

IFRS8 The revisions to this standard will require additional disclosure and e¡ective for accountingperiods beginning on or after 1 January 2009.

IAS1 The revisions to this standard will require additional disclosures, both qualitative andquantitative, concerning the capital of the Group and Company. The revisions to this standardare e¡ective for accounting periods beginning on or after 1 January 2007.

116

19. NATUREOF FINANCIAL INFORMATIONThe ¢nancial information on the Company presented above does not constitute statutory accounts as de¢nedby the Companies Act 1985 (as amended). Statutory accounts for the period ended 31 December 2004 andfor each of the two years ended 31 December 2006 have been ¢led with the Registrar of Companies.

117

PARTV (b) INTERIMRESULTSOF THECOMPANYThe following is the full text of the unaudited interim ¢nancial statements of the Company announced on28 September 2007:

CONDENSED PROFIT & LOSS ACCOUNTS

Notes

Unaudited6 months to

30 June2007»’000

Unaudited6 months to

30 June2006»’000

AuditedYear ended

31December2006»’000

Turnover ç ç çAdministration expenses and operating loss (186) (2,281) (2,876)Exceptional reduction to expenses 4 551 ç çInvestment income 5 10 10Interest paid ç ç ç

Pro¢t/(loss) for the period before tax 370 (2,271) (2,866)Taxation ç ç ç

Retained pro¢t (loss) for the period 370 (2,271) (2,866)

Earnings/(loss) per diluted share (pence)ç basicand diluted 3 0.94 (97.4) (123)

118

CONDENSEDCONSOLIDATED BALANCE SHEETSUnaudited

30 June2007»’000

Unaudited30 June

2006»’000

Audited31December

2006»’000

Current assetsProject development costs 22 ç 14Trade and other receivables 49 108 38Cash and cash equivalents 610 58 12

Total assets 681 166 64

EquityShare capital 1,281 466 466Shares to be issued 8 ç çShare option reserve 244 254 244Share premium 3,682 3,734 3,734Accumulated losses (4,656) (4,431) (5,026)

Total equity 559 23 (582)

Current liabilitiesTrade and other payables 122 143 646

Total equity and liabilities 681 166 64

119

CONDENSEDCONSOLIDATEDCASH FLOWSTATEMENTUnaudited6 months to

30 June2007»’000

Unaudited6 months to

30 June2006»’000

AuditedYear ended

31December2006»’000

Net cash £ow from operating activitiesCash £ow from operating activities (186) (2,053) (2,658)Exceptional item 551 ç ç

365 (2,053) (2,658)Movement in working capitalIncrease in project development costs (9) ç (14)(Increase)/decrease in receivables (10) 916 986Increase/(decrease) in payables (516) 85 588

Net cash used in operating activities (170) (1,052) (1,098)

Investing activitiesInterest received 5 10 10

Net cash from investing activities 5 10 10

Financing activitiesCosts incurred in issue of share capital (52) ç çProceeds from issue of share capital 815 ç ç

Net cash from ¢nancing activities 763 ç ç

Net increase/(decrease) in cash in the period 598 (1,042) (1088)

Cash and cash equivalents at beginning of the period 12 1,100 1,100

Cash and cash equivalents at end of the period 610 58 12

120

CONSOLIDATED STATEMENTOFCHANGES IN EQUITY

ShareCapital»’000

ShareCapital tobe issued

»’000

Sharepremiumaccount»’000

Shareoptionreserve»’000

Accumulatedlosses»’000

Total»’000

Balance at 1 January2006 466 ç 3,734 244 (2,160) 2,284Loss for the year ç ç ç ç (2,866) (2,866)

Balance at31 December 2006 466 ç 3,734 244 (5,026) (582)Pro¢t for the sixmonths ç ç ç ç 370 370Issue of share capital 815 8 ç ç ç 823Costs of issue ofshares ç ç (52) ç ç (52)

Balance at 30 June2007 1,281 8 3,682 244 (4,656) 559

121

NOTES TOTHE INTERIM FINANCIAL INFORMATION1. The interim results are unaudited and do not comprise statutory accounts within the meaning of

Section 240 of the Companies Act 1985. The results for the year ended 31 December 2006 have beenextracted from the Group accounts for that period. Those ¢nancial statements have been ¢led with theRegistrar of Companies and included an auditors’ report, which was modi¢ed in respect of an emphasisof matter of going concern.

2. The interim results have been prepared in accordance with the accounting policies adopted in theaccounts for the year ended 31 December 2006, which have been prepared under IFRS and thosepolicies to be adopted in respect of the 31 December 2007.

3. Earnings per share is based on a pro¢t after taxation of »370,214 and on 39,384,468 ordinary shares,being the weighted average number in issue during the period. The loss per share for comparativepurposes has been restated to re£ect the share consolidation that took place in April 2007.

4. Exceptional costs totalling »154,816 were incurred as a consequence of the CVA and ¢nancialreorganisation. The exceptional reduction in expenses of »551,266, being a reversal of amountspreviously estimated to be required, is stated after deducting these exceptional costs.

5. As at 30 June 2007 the issued share capital comprised 83,829,483 ordinary shares of 1p and 46,589,662deferred shares of 0.95p. The deferred shares have no voting or dividend rights. A total of 832,127ordinary shares of 1p are to be issued following the CVA.

6. No tax liability arises due to the losses incurred in prior periods.

122

PART VI

PRO FORMA FINANCIAL INFORMATION ON THE ENLARGED GROUP

123

Set out below is an unaudited pro forma statement of consolidated net assets of the Enlarged Group, which has beenprepared on the basis of the consolidated ¢nancial information on the Company as adjusted for the reverse takeover asset out in the notes below. The pro forma has been prepared for illustrative purposes only and, because of its nature, willnot represent the actual ¢nancial position of the Enlarged Group.

AdjustedCompanynet assets

IGL netassets

Reversetakeover

adjustmentsPro-formabalances

Notes (i) (ii) (iii)»’000 »’000 »’000 »’000

ASSETSNon-current assets:Goodwill ç ç ç çIntangible exploration and evaluation assets ç 29 ç 29Tangible ¢xed assets ç ç ç ç

Total non-current assets ç 29 ç 29

Current assets:Trade and other receivables 49 235 ç 284Cash at bank and in hand 1,465 425 ç 1,890

Total current assets 1,514 660 ç 2,174

Total assets 1,514 689 ç 2,203

LIABILITIESNon-current liabilitiesDeferred tax ç ç ç ç

Total non-current liabilities ç ç ç ç

Current liabilities:Trade and other payables (122) (390) ç (512)Tax payable ç (31) ç (31)

Total current liabilities (122) (421) ç (543)

Total liabilities (122) (421) ç (543)

NETASSETS 1,392 268 ç 1,660

124

NOTES:

(i) The Company balances are extracted from the unaudited interim statements as at 30 June 2007 as set out in SectionB of Part V of this Document and adjusted for the following:

. The disposal of the Company’s Existing Projects to KP Wind and Biomass Limited and the subsequentdisposal of KP Wind and Biomass Limited to Blenheim Energy Limited for consideration of »1 and a fullindemnity against future claims under the CVA.

. The issue on 2 November 2007 of convertible loan notes totalling »855,000, net of transaction costs of»45,000, and the subsequent conversion into 81,818,150 shares at 1.1p per share on the Acquisition. TheseLoan Notes convert automatically to shares upon consummation of the transaction.

TheCompany

as at30 June

2007CVA

adjustment

Convertibleloan note

adjustment

AdjustedCompanybalances

»’000 »’000 »’000 »’000ASSETSNon-current assets:Goodwill ç ç ç çIntangible exploration and evaluation assets ç ç ç çTangible ¢xed assets ç ç ç ç

Total non-current assets ç ç ç ç

Current assets:Project development costs 22 (22) ç çTrade and other receivables 49 ç ç 49Cash at bank and in hand 610 ç 855 1,465

Total current assets 681 (22) 855 1,514

Total assets 681 (22) 855 1,514

LIABILITIESNon-current liabilitiesDeferred tax ç ç ç ç

Total non-current liabilities ç ç ç ç

Current liabilities:Trade and other payables (122) ç ç (122)Tax payable ç ç ç ç

Total current liabilities (122) ç ç (122)

Total liabilities (122) ç ç (122)

NETASSETS 559 (22) 855 1,392

(ii) The balances of IGL are extracted from the unaudited interim statements as at 30 June 2007 as set out inSection b of Part IV of this Document.

(iii) The reverse takeover of the Company by IGL, whereby the Company’s net assets are adjusted as follows:

. The Company’s net assets are adjusted to re£ect their fair value;

. The cost of the transaction will be:

(a) the Company’s market value based on the latest closing price before the date of this document,which for the purposes of this document has been taken at close of business on 19 November2007 at 1.6p per share giving a market capitalisation of »1,354,586, plus;

(b) the shares that will be created as a result of the Loan Note conversion (including shares issuedas a broking fee to e¡ect the fundraising) referred to at (i) above, which for the purposes of thisdocument have been valued on the same basis as referred to at (a) above, and taking account ofthe costs of issuance, gives an additional market capitalisation of »1,397,980, plus;

(c) the costs of e¡ecting the transaction, which are currently projected to be »800,000: giving

(d) a total transaction cost of »3,552,566.

. Goodwill created by the Acquisition of »2,160,566 (being the cost of the transaction of »3,552,566 lessthe fair value of the Company’s assets of »1,392,000) has been written o¡ to the pro¢t and loss accountimmediately on Acquisition.

125

Our Reference:

The DirectorsKP Renewables PlcAldermary House10-15 Queen StreetLondon EC4N 1TX

Mazars LLP13 Sheldon Square

LondonW2 6PS

The DirectorsLibertas Capital Corporate Finance Limited16 Berkeley StreetLondonW1J 8DZ

27 November 2007

Dear Sirs

We report on the unaudited pro forma ¢nancial information set out in Part VI of the AIM AdmissionDocument (‘the Document’) dated 27 November 2007 of KP Renewables Plc (‘the Company’) which hasbeen prepared on the basis of the notes thereto, for illustrative purposes only, to provide information abouthow the New Ordinary Shares and the reverse takeover acquisition might have a¡ected the ¢nancialinformation, presented on the basis of the accounting policies adopted by the Company in preparing the¢nancial information at 30 June 2007. This report is required by Schedule Two of the AIMRules and is givenfor the purpose of complying with that schedule and for no other purpose.

ResponsibilitiesIt is the responsibility of the Directors of the Company to prepare the pro forma ¢nancial information inaccordance with Schedule Two of the AIM Rules. It is our responsibility to form an opinion on the ¢nancialinformation as to the proper compilation of the pro forma ¢nancial information and to report our opinion toyou.

In providing this opinion we are not updating or refreshing any reports or opinions previously made by us onany ¢nancial information used in the compilation of the pro forma ¢nancial information, nor do we acceptresponsibility for such reports or opinions beyond that owed to those to whom those reports or opinions wereaddressed by us at the dates of their issue.

Basis of opinionWe conducted our work in accordance with the Standards for Investment Reporting issued by the AuditingPractices Board in the United Kingdom. The work that we performed for the purpose of making this report,which involved no independent examination of any of the underlying ¢nancial information, consistedprimarily of comparing the unadjusted ¢nancial information with the source documents, considering theevidence supporting the adjustments and discussing the pro forma ¢nancial information with the directors ofthe Company.

We planned and performed our work so as to obtain all the information and explanations we considerednecessary in order to provide us with reasonable assurance that the pro forma ¢nancial information has beenproperly compiled on the basis stated and that such basis is consistent with the accounting policies of theCompany.

OpinionIn our opinion:

(a) the pro forma ¢nancial information has been properly complied on the basis stated; and

(b) such basis is consistent with the accounting policies of the Company

126

DeclarationFor the purposes of Paragraph (a) of Schedule Two of the AIM Rules we are responsible for this report aspart of the Document and declare that we have taken all reasonable care to ensure that the informationcontained in this report is, to the best of our knowledge, in accordance with the facts and contains noomission likely to a¡ect its import. This declaration is included in the Document in compliance with ScheduleTwo of the AIMRules.

Yours faithfully

Mazars LLPChartered Accountants

127

PART VII

ADDITIONAL INFORMATION

1. ResponsibilityThe Existing Directors and the Proposed Directors, whose names appear on page 3 of this document, acceptresponsibility for the information contained in this document including collective and individualresponsibility for the compliance with the AIMRules for Companies. To the best of the knowledge and beliefof the Existing Directors and the Proposed Directors (who have taken all reasonable care to ensure that suchis the case), the information contained in this document is in accordance with the facts and contains noomission likely to a¡ect its import.

Each of Andrew Austin, Brent Cheshire, Francis Gugen, Leigh Dyson, Edward Lasseter, Andrew Purcell,Michael Smith and Roger Smith, accepts responsibility for the information contained in this documentrelating to the Concert Party. To the best of each of the knowledge and belief of Andrew Austin, BrentCheshire, Francis Gugen, Leigh Dyson, Edward Lasseter, Andrew Purcell, Michael Smith and Roger Smith(having taken all reasonable care to ensure that such is the case) the information for which they eachaccepted responsibility is in accordance with the facts and does not omit anything likely to a¡ect the importof such information.

2. The Company and its subsidiariesThe Company is registered and domiciled in England and Wales, having been incorporated on 1 December2003 under the Acts as a public company limited by shares with registered number 4981279.

2.1 The principal legislation under which the Company operates is the Acts and regulations madethereunder.

2.2 The Company’s registered o⁄ce is at 7th £oor Aldermary House, 10-15 Queen Street, London,EC4N 1TX. The telephone number of the Company’s registered o⁄ce is 020 7332 2200.

2.3 The business of the Company and its principal activity is to act as a holding company. The EnlargedGroup’s main activity will be appraising, developing and extracting CBM in the UK and providingtechnical and other related services to CBM operators in the industry, this activity and operation willbe carried on by IGL.

2.4 The Company currently has two subsidiaries, KP Renewables (Operations) Limited and KPWind andBiomass Limited.

2.5 Immediately following Admission, the Company will be the holding company of the followingsubsidiary companies:

NameDate ofincorporation

Country ofincorporation Interest

KPRenewables (Operations) Limited 22May 2000 England 100%Island Gas Limited 12 November 2003 England 100%

2.6 The Company and its subsidiaries do not currently have any employees. Following Admission theEnlarged Group will have three employees.

3. Share capital of the Company3.1 On incorporation, the Company had an authorised share capital of »50,000 divided into 50,000

ordinary shares of »1 each, of which 2 were issued to the subscribers to the memorandum or associationof the Company.

On 20 December 2003 ordinary resolutions of the Company were passed, subdividing each issued andunissued ordinary shares in the capital of the Company into 100 new ordinary shares of 1 pence eachand increasing the authorised share capital of the Company by »700,000 by the creation of anadditional 70,000,000 Ordinary Shares of 1 pence each.

Between 1 December 2003 and 30 January 2004, the Board allotted 1,375,000 new Ordinary Shares at 1pence per share, pursuant to subscription for cash.

Between 1 February 2004 and 29 March 2004, the Board allotted 601,000 new Ordinary Shares atbetween 7.17 and 10 pence per share, pursuant to subscriptions for cash.

128

On 30 March 2004, the Board allotted 725,574 Ordinary Shares at between 18.07 and 72.30 pence pershare, pursuant to subscriptions for cash.

On 31 March 2004, the Board allotted 34,500,000 Ordinary Shares at 1 pence per share, pursuant tosubscriptions for cash.

On 3 December 2004, the Board allotted 3,244,600 Ordinary Shares at 1 pence per share, pursuant tosubscriptions for cash.

On 31 January 2005, the Board allotted 850,600 Ordinary Shares at 1.02 pence per share, pursuant tosubscriptions for cash.

On 13 May 2005 an ordinary resolution of the Company was passed, increasing the authorised sharecapital of the Company by »250,000 by the creation of an additional 25,000,000 Ordinary Shares of1 pence each.

On 26 July 2005, the Board allotted 2,282,464 Ordinary Shares at 40 pence per share, to certain personspursuant to a pre-IPO subscription.

On 27 July 2005, the Board allotted 2,373,664 Ordinary Shares at 125 pence per share, to certainpersons pursuant to the IPO subscription.

On 5 August 2005, the Board allotted 30,080 Ordinary Shares at 82.5 pence per share, to certainpersons.

On 12 August 2005, the Board allotted 58,480 Ordinary Shares at 85.5 pence per share to Dr HussanFakhroo.

On 15 August 2005, the Board allotted 400,000 Ordinary Shares to coze.com pursuant to a contractbetween the parties dated 2 July 2004.

On 16 August 2005, the Board allotted 148,000 Ordinary Shares to BizzEnergy Ltd pursuant to acontract dated 16May 2005.

On 10 April 2007, special resolutions were passed sub-dividing each issued ordinary share of theCompany into one deferred share of 0.95 pence and one ordinary share of 0.05 pence each. Further,each ordinary share of 0.05 pence each was consolidated on a twenty to one basis to create newconsolidated Ordinary Shares of 1 pence each.

On 10 April 2007, an ordinary resolution was passed to increase the Company’s authorised sharecapital by »5,000,000 through the creation of 500,000,000 Ordinary Shares of 1 pence each.

On 10 April 2007, the Board allotted 75,000,000 Ordinary Shares at 1 pence per share pursuant to afund raising.

On 10 April 2007, the Board allotted 6,500,000 Ordinary Shares at 1 pence per share as considerationfor services provided to the Company in the aggregate total amount of »65,000 and payable as fees.

On 2 November 2007, the Company issued »900,000 of Loan Notes at par value. The Loan Notesconvert into Existing Ordinary Shares at a price of 1.1p per Existing Ordinary Share (equivalent to 55pper New Ordinary Share). The Loan Notes convert on a mandatory basis in the event that theProposals are completed and will result in the issue of 1,636,364 New Ordinary Shares.

On 7 November 2007, the Existing Directors allotted 832,127 Ordinary Shares to former creditors,pursuant to the CVA.

3.2 The existing authorised and issued fully paid up share capital of the Company as at the date of thisdocument is set out below:

Authorised Issued

Number » Number »

Existing Ordinary Shares of 1p each 555,739,821 5,557,398.21 84,661,610* 846,616Deferred Shares of 0.95p 46,589,662 442,601.79 46,589,662 44,260,178

*This does not include the shares to be issued pursuant to the conversion of the LoanNotes.

3.3 Save as otherwise disclosed in paragraph 3.1 above there has been no change in the amount of theissued share or loan capital of the Company and no material change in the amount of the issued shareor loan capital of any other member of the Enlarged Group (other than intra-group issues by wholly-

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owned subsidiaries) in the three years preceding the date of this document/since the incorporation ofthe Company. No shares in the Company are held by the Company or any of its subsidiaryundertakings.

3.4 Save as disclosed in this document, there are no acquisition rights or obligations over authorised butunissued share capital of the Company and there is no undertaking to increase the share capital.

3.5 Resolutions have been proposed, which if approved by shareholders on 27 December 2007, wouldgrant the following powers and authorities to the Directors to issue New Ordinary Shares:

(i) the authorised share capital of the Company will be increased from »6,000,000 to »45,000,000 bythe creation of 78,000,000 New Ordinary Shares of 50p each;

(ii) in substitution for all previous authorities (save to the extent already exercised) the Directors willbe generally and unconditionally authorised in accordance with section 80 of the Act to exerciseall powers of the Company to allot relevant securities (as de¢ned by section 80(2) of the Act) upto an aggregate nominal amount of »15,000,000; for a period expiring (unless previously renewed,varied or revoked by the Company in general meeting) at the conclusion of the Company’sannual general meeting next following the passing of the resolution or 15 months after the date ofthe passing of this resolution, whichever is the earlier, but the Company may before such expiry,revocation or variation make an o¡er or agreement which would or might require relevantsecurities to be allotted after such expiry, revocation or variation and the Directors may allotrelevant securities in pursuance of such o¡er or agreement as if the authority conferred by theresolution had not expired or been revoked or varied;

(iii) the Directors will be empowered pursuant to section 95 of the Act, to allot equity securities(within the meaning of section 94(2) of the Act) for cash, pursuant to the authority conferred byparagraph (ii) above as if section 89(1) of the Act did not apply to such allotment provided thatthis power is limited to:

(a) the allotment of equity securities up to a maximum aggregate nominal amount to permitthe issue of the Consideration Shares pursuant to the terms of the Acquisition;

(b) the allotment of equity securities up to a maximum aggregate nominal amount to permitthe issue of New Ordinary Shares in connection with the exercise of theWarrants;

(c) the allotment of equity securities pursuant to a rights issue, open o¡er scrip dividendscheme or other pre-emptive o¡er or scheme in favour of holders of New Ordinary Sharesand any other persons who are entitled to participate in such issue, o¡er or scheme wherethe equity securities o¡ered to each such holder and other person are proportionate (asnearly as may be) to the respective numbers of New Ordinary Shares held or deemed to beheld by them for the purposes of determining their inclusion in such issue, o¡er or schemeon the record date applicable thereto, but subject to such exclusions or other arrangementsas the Directors may deem ¢t to deal with fractional entitlements, legal or practicalproblems arising under the laws of any overseas territory, the requirements of anyregulatory body or stock exchange or by virtue of shares being represented by depositaryreceipts or by virtue of any other matter whatever which the Directors consider to requiresuch exclusions or other arrangements; and;

(d) the allotment of equity securities for cash otherwise than pursuant to sub-paragraphs (a)and (b) above up to an aggregate nominal amount of »6,000,000.

and that, subject to the case of an allotment of equity securities, to the continuance of theauthority conferred by paragraph (d) above, the power conferred by the resolution shall expire 15months after the passing of the resolution or at the conclusion of the Company’s annual generalmeeting next following such passing, whichever is the earlier, but may be previously revoked orvaried from time to time by special resolution but so that the Company may before such expiry,revocation or variation make an o¡er or agreement which would or might require equitysecurities to be allotted after such expiry, revocation or variation and the Directors may allotequity securities in pursuance of such o¡er or agreement as if such power had not expired or beenrevoked or varied.

3.6 The provisions of section 89 of the Act, which confers on shareholders rights of pre-emption in respectof the allotment of equity securities which are, or are to be, paid up fully in cash, other than by way ofallotment to employees under an employee share scheme (as de¢ned in section 743 of the Act) will

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apply to the balance of the authorised but unissued Ordinary Share capital of the Company, to theextent that such rights are not disapplied by special resolution by the shareholders pursuant to section95 of the Act in accordance with paragraph 3.5 above or otherwise.

3.7 The New Ordinary Shares to be issued pursuant to the Acquisition will, on Admission, rank pari passuin all respects with the Existing Ordinary Shares (on a post consolidation basis), including the right toreceive all dividends and other distributions declared, made or paid after the date of this document andwill have the rights and be subject to the restrictions referred to in paragraph 6 of this Part VII.

3.8 Save as disclosed in this document, no commission, discounts, brokerages or other speci¢c terms havebeen granted by the Company in connection with the issue or sale of any of its share or loan capital.

3.9 The International Securities Identi¢cation Number (ISIN) for the Existing Ordinary Shares isGB00BIVNNX82. The ISIN for the New Ordinary Shares is GB00B1VNNX82.

3.10 Following Admission, the New Ordinary Shares may be held in either certi¢cated or uncerti¢catedform.

4. Share Options andWarrants4.1 Save as set out in paragraph 4.3, below, there are no outstanding share options or warrants.

4.2 Save as disclosed in this document, no share capital of the Company will, at Admission, be underoption or be agreed conditionally or unconditionally to be put under option.

4.3 It is proposed that in recognition of the services for Peter Redmond, Richard Armstrong and JohnBryant, the Existing Directors and David Lindley who recently stepped down from the Board thatWarrants be granted to these individuals in recognition of the work carried out by them inorchestrating the reconstruction and re¢nancing of the Company. Each individual will receive 110,000Warrants of which 82,500 are exercisable into New Ordinary Shares at a price of 55p per NewOrdinary Share and 27,500 are exercisable at a price of 75p per New Ordinary Share. The Warrants arein all cases exercisable for a period of 3 years, ending on the third anniversary of Admission. The lowestexercise price for the ¢rst tranche of Warrants is based upon the price at which the Company raised»900,000 by way of the issue of the Loan Notes.

On 10 April 2007 the Company entered into a warrant agreement with Merchant Capital Limitedpursuant to which Merchant Capital Limited was granted warrants to acquire up to 4,191,474Ordinary Shares at a price of 1p per Ordinary Share. The warrants lapse on 10 April 2009. If theResolutions are passed the adjustment mechanism set out in the agreement will operate to rebase thewarrants so that they reduce in number to 83,830 and the exercise price increases to 50p per NewOrdinary Share.

On 16 May 2005 the Company entered into a warrant instrument with KBC Peel Hunt Limitedpursuant to which KBC Peel Hunt Limited is entitled to subscribe for ordinary shares in the Companyas is equal to »250,000, at the last price the Ordinary Shares were subscribed prior to the originaladmission of the Ordinary Shares to trading on AIM. KBC Peel Hunt Limited may subscribe forshares during the period commencing on the date of admission of the ordinary shares to trading onAIM and expiring on the ¢fth anniversary of such date. The warrant may be exercised in whole or inpart on any one or more occasions during this period. KBC Peel Hunt Limited has been given noticethat the warrant is now rebased on a warrant to subscribe for 31,250 Ordinary Shares at a price of»8.00 per Ordinary Share and if the Resolutions are passed it will be further rebased as a warrant tosubscribe for 625 New Ordinary Shares at a price of »400.00 per New Ordinary Share.

On 5 January 2005 the Company entered into a share option agreement with Castle Trust andManagement Services Limited as Trustees of the Kwikpower Employee Bene¢t Trust pursuant towhich the Company agreed to grant to Castle Trust and Management Services Limited an option over850,000 of the Ordinary Shares at 1 pence per share. Such options are held by Castle Trust andManagement Services Limited as Trustees of the Kwikpower Employee Bene¢t Trust on behalf ofElaine Delamer House. The option cannot be transferred, assigned or otherwise disposed of and iscapable of being exercised at any time up to 5 January 2010. This option has been released as a result ofthe resolutions passed on 10 April 2007 and is now an option to acquire 42,500 Existing OrdinaryShares at a price of 20p per Existing Ordinary Share. Assuming the Resolutions are passed this optionwill be released to become an option to acquire 850 New Ordinary Shares at a price of »10.00 per NewOrdinary Share.

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On 17 June 2004 the Company granted Philip Taylor an option over 600,000 of the Company’sordinary shares at 1 pence per share under the terms of the KP Renewables plc Share Option Plan 2004.The option is capable of being exercised at any time up to 5 January 2009. This option has been releasedas a result of the resolutions passed on 10 April 2007 and is now an option to acquire 30,000 ExistingOrdinary Shares at a price of 20p per Existing Ordinary Share. Assuming the Resolutions are passedthis option will be released as an option to acquire 600 New Ordinary Shares at a price of »10.00 perNew Ordinary Share.

5. Memorandum of AssociationThe principal object of the Company, which is set out in Clause 4(A) of its Memorandum of Association is tocarry on business as a general commercial company and to carry on any trade or business whatsoever and todo all such things as are incidental or conducive to the carrying on of any trade or business by it. The objectsof the Company are set out in full in Clause 4 of theMemorandum of Association.

6. Articles of AssociationIt is proposed that the New Articles will be adopted by a special resolution of the Company at the EGM andwill contain, inter alia, provisions to the following e¡ect:

6.1.1 Rights attaching to Ordinary Shares(a) Voting rights of members

Subject to disenfranchisement in the event of (a) non-payment of any call or other sum due and payable inrespect of any share or (b) any non-compliance with any statutory notice requiring disclosure of thebene¢cial ownership of any shares and subject to any special rights or restrictions as to voting for the timebeing attached to any shares (as to which there will be none following Admission), on a show of hands everymember who, being an individual, is present in person or by proxy or being a corporation, is present by aduly authorised representative who is not himself a member entitled to vote shall have one vote and on a pollshall have one vote for every share of which he is a holder. In the case of joint holders, the vote of the personwhose name stands ¢rst in the register of members is accepted to the exclusion of any votes tendered by anyother joint holders.

(b) Dividends

Subject to the rights attached to any shares issued on any special terms and conditions (as to which there willbe none at Admission), dividends shall be declared and paid according to the amounts paid up on the shareson which the dividend is paid, but no amount paid up on a share in advance of a call shall be regarded as paidup on the share. Dividends are not payable on any ¢xed dates.

(c) Return of capital

Subject to the rights attached to any shares issued on any special terms and conditions (as to which there willbe none at Admission), on a winding-up the surplus assets remaining after payment of all creditors of theCompany will be divided amongst the members of the Company according to their respective holding ofshares. The liquidator may, with the sanction of an extraordinary resolution of the Company and any othersanction required by statute (a) divide amongst the members in specie the whole or any part of the assets ofthe Company, or (b) vest the whole or any part of the assets in trustees on such trusts for the bene¢t ofmembers as the liquidator shall determine, but no member shall be compelled to accept any assets uponwhich there is any liability.

(d) Restrictions on shareholders

Subject to the AIM Rules, if a member or any other person appearing to be interested in shares, has beengiven notice under section 793 of the Companies Act 2006 and has failed to give information of their interestin any shares (the ‘‘Default Shares’’) within a prescribed time, the member shall not be entitled in respect ofthe Default Shares to attend or vote either personally or by proxy at a general meeting of the Company or ameeting of the holders of any class of shares or to exercise any other right in relation to general meetings ofthe Company or meeting of the holders of any class of its shares.

Where the Default Shares represent 0.25 per cent. or more (in nominal value or number) of the issued sharesof a class, then the Company shall be entitled to withhold any dividend (or part thereof), any right to receiveshares instead of a dividend or other money which would otherwise be payable in respect of the DefaultShares. Where the Default Shares represent 0.25 per cent or more (in nominal value or number) of the issued

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shares of a class, then no transfer of the Default Shares shall be registered unless the shareholder is nothimself in default as regards supplying the information required and provides evidence, to the satisfaction ofthe Directors, that no person in default as regards supplying such information is interested in any of theshares which are the subject of the transfer or registration is required by the Uncerti¢cated SecuritiesRegulations 2001.

6.1.2 Rights attaching to the Deferred SharesThe speci¢c rights attaching to the Deferred Shares are as follows:

(a) the Deferred Shares shall not be entitled to any dividends or to any other right or participation in thepro¢ts of the Company;

(b) on return of assets on liquidation, the Deferred Shares shall confer on the holders thereof anentitlement to receive out of the assets of the Company available for distribution amongst the members(subject to the rights of any new class of shares with preferred rights) the amount paid up or credited aspaid up on the deferred shares held by them respectively after (but only after) payment shall have beenmade to the holders of the ordinary shares of the amounts paid up or credited as paid up on such sharesand the sum of »10,000,000 in respect of each ordinary share held by them respectively. The holders ofthe Deferred Shares shall have no further right to participate in the assets of the Company;

(c) the holders of the Deferred Shares shall not be entitled to vote upon any resolution and shall not beentitled to receive notice of, attend any general meeting, or be part of the quorum thereof as the holdersof the Deferred Shares;

(d) any reduction of capital involving the cancellation of the Deferred Shares for no consideration shall notbe deemed to be a variation of the rights attaching to them nor a modi¢cation or abrogation of therights or privileges attaching to the Deferred Shares;

(e) the special rights conferred upon the holders of the Deferred Shares shall be deemed not to be modi¢ed,varied or abrogated by the creation or issue of further shares ranking pan passu with or in priority tothe Deferred Shares; and

(f) the Company shall have irrecoverable authority at any time to appoint any person to execute on behalfof the holders of the Deferred Shares a transfer thereof and/or an agreement to transfer the same,without making any payment to the holders thereof or g, to such person as the Company maydetermine as custodian thereof and/or to cancel the same without making any payment to the holdersthereof and/or acquire the same (in accordance with the provisions of the Acts) without making anypayment to or obtaining the sanction of the holders thereof.

6.1.3 Transfer of sharesA member may transfer all or any of his uncerti¢cated shares and the Company shall register the transfer ofany uncerti¢cated shares in accordance with any applicable statutory provision. The Directors may refuse toregister the transfer of an uncerti¢cated share or any renounceable right of allotment of a share which is aparticipating security held in uncerti¢cated form in accordance with the CREST Regulations to the extentthat the Company is permitted to do so by the CREST Regulations, provided that where the uncerti¢catedshares are admitted to AIM, such a refusal would not prevent dealings in the shares of that class taking placeon an open and proper basis. If the board of directors refuses to register a transfer of an uncerti¢cated shareit shall, within two months of the date on which the operator instruction relating to such a transfer wasreceived by the Company, send to the transferee notice of the refusal.

A member may transfer all or any of his certi¢cated shares by an instrument in writing in any usual form, orin any other form which the Directors may approve. The instrument of transfer shall be executed by or onbehalf of the transferee. The Directors may, in their absolute discretion and without giving any reason, refuseto register the transfer of a certi¢cated share which is not fully paid up but shall not be bound to specify thegrounds upon which such registration is refused provided that, where any such shares are admitted to AIM,such a refusal would not prevent dealings in the shares of that class taking place on an open and proper basis.The Directors may also refuse to register a transfer of a certi¢cated share or a renunciation of a renounceableletter of allotment, whether or not fully paid, unless the instrument of transfer is lodged, duly stamped oradjudged or certi¢ed as not chargeable to stamp duty, at the transfer o⁄ce, or such other place as theDirectors may appoint and is accompanied by the certi¢cate(s) for the share(s) to which it relates (exceptwhere the shares are registered in the name of a market nominee and no certi¢cate has been issued for them)and such other evidence as the Directors may reasonably require to show the right of the transferor to make

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the transfer or the person renouncing to e¡ect the renunciation. If the Directors refuse to register a transferof a share they shall, within two months after the date on which the transfer was lodged with the Company,send to the transferee notice of the refusal.

The Directors may refuse to register any transfer unless it is in respect of only one class of share and is infavour of not more than four transferees or renouncees.

6.1.4 Changes in capitalThe Company may by ordinary resolution:

(a) increase its share capital by a sum to be divided into shares of such amounts as the resolution shallprescribe;

(b) consolidate and divide all or any of its share capital into shares of a larger amount than its existingshares;

(c) sub-divide its shares, or any of them, into shares of a smaller amount than is ¢xed by the Memorandumof Association; and

(d) cancel shares which, at the date of the passing of the resolution, have not been taken or agreed to betaken by any person and diminish the amount of its share capital by the amount of the shares socancelled.

Subject to the provisions of the statutes and the AIM Rules and to the rights attaching to existing shares, theCompany may:

(i) by extraordinary resolution purchase, or enter into a contract under which it will or may purchase, itsown shares; and

(ii) by special resolution reduce its share capital, any capital redemption reserve share premium account orother undistributable reserve in any manner.

6.1.5 Variation of rightsSubject to the provisions of the statutes, if at any time the capital of the Company is divided into di¡erentclasses of shares (which it will not be following Admission), the rights attached to any class may be varied orabrogated in such manner (if any) as may be provided by these rights or in the absence of any suchprovisions, with the consent in writing of the holders of not less than three-quarters in nominal value of theissued shares of that class or with the sanction of a special resolution passed at a separate meeting of theholders of the shares of that class. At any separate general meeting, the necessary quorum shall be twopersons holding or representing by proxy at least one-third in nominal amount of the issued shares of theclass in question or, at any adjourned meeting of such holders, shall be one person holding shares of the classin question in person or by proxy whatever his or their holding. Every holder of the shares of the class presentin person or by proxy shall, on a show of hands or on a poll, have one vote in respect of every share of theclass held by them respectively and a poll may be demanded in writing by any holder of shares of the classpresent in person or by proxy.

6.1.6 Directors(a) The number of directors (other than alternate directors) shall not be less than four. There shall be no

more than 10 directors. The quorum for meetings of the board shall be 4 in number.

(b) ADirector shall not be required to hold any shares of the Company by way of quali¢cation.

(c) There shall be no age limit for Directors.

(d) At each annual general meeting at least one-third of the Directors for the time being shall retire fromo⁄ce by rotation. The Directors to retire by rotation shall include, ¢rstly, any Director who wishes toretire at the meeting and not o¡er himself for re-election and, secondly, those Directors who have beenlongest in o⁄ce since their last appointment or reappointment, provided always that each director shallbe required to retire and o¡er himself for re-election at least every three years. The retiring Directorshall, if willing to act, be deemed to have been reappointed, unless at the general meeting it is resolvednot to ¢ll the vacancy or a resolution for the reappointment of the director is put to the meeting and notpassed.

(e) The Directors (other than alternate directors) shall be entitled to such remuneration by way of fees fortheir services in the o⁄ce of a director as the Directors may determine (not exceeding »200,000 in

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aggregate per annum or such larger sum as the Company may, by ordinary resolution, decide). Suchfee shall be divided between the Directors as they agree or, failing agreement, equally. The fees shall bedistinct from any salary, remuneration or other amount payable to a Director in respect of anyexecutive o⁄ce held by him or other work performed by him which is beyond the scope of his o⁄ce as aDirector.

(f) The Directors may also be paid all travelling, hotel and other expenses properly incurred by them inconnection with their attendance at meetings of the Directors or of committees of the Directors orgeneral meetings or separate meetings of the holders of any class of shares of the Company.

(g) The Directors may provide bene¢ts, whether by the payment of gratuities or pensions or by purchasingand maintaining insurance or otherwise, for the bene¢t of any persons who are or were at any timeDirectors or the holders of any executive or comparable o⁄ce of employment with the Company orany other company or undertaking which is or has been (a) a subsidiary of the Company or (b)otherwise allied to or associated with the company or a subsidiary of the Company or (c) a predecessorin business of the Company or of any such subsidiary, or (d) for any member of his family (including aspouse and a former spouse) or any person who is or was dependent on him, and may (as well before orafter he ceases to hold such o⁄ce or employment) establish, maintain, subscribe and contribute to anyfund and pay premiums for the purchase or provision of any such bene¢t.

(h) Subject to the provisions of the statutes a Director may be a party to or otherwise interested in anycontract, transaction, arrangement or proposal with the Company or in which the Company isotherwise interested either in regard to his tenure of any o⁄ce or place or pro¢t or as vendor purchaseror otherwise. A Director may hold any other o⁄ce or place of pro¢t under the Company (except that ofauditor or auditor of a subsidiary of the Company) in conjunction with the o⁄ce of director and mayact by himself or through his ¢rm in such professional capacity to the Company and in any such case onsuch terms as to remuneration and otherwise as the Directors may arrange. Any remuneration shall bein addition to any remuneration provided for by any other article.

(i) A Director who to his knowledge is in any way (directly or indirectly) interested in a contract,transaction, arrangement or proposal with the Company shall declare the nature of his interest at themeeting of the Directors at which the question of entering into such contract, transaction, arrangementor proposal is ¢rst considered if he knows his interest then exists or in any other case at the ¢rst meetingof the directors after he knows that he is or has become so interested.

(j) A Director shall not vote or be counted in the quorum on any resolution of the directors concerning hisown appointment (including the ¢xing and varying of terms of appointment) as the holder of any o⁄ceor place of pro¢t with the Company or any other company in which the Company is directly orindirectly interested. Where proposals are under consideration concerning the appointment (includingthe ¢xing or varying of terms of appointment) of two or more Directors to o⁄ces or employment withthe Company or any body corporate in which the Company is interested the proposals may be dividedand considered in relation to each director separately and (provided he is not under the Articles or forany other reason precluded from voting) each of the directors concerned shall be entitled to vote and becounted in the quorum in respect of each resolution except that concerning his own appointment.

(k) A Director shall not vote or count in the quorum in relation to a resolution or meeting of the Directorsin respect of any contract or arrangement or any other proposals whatsoever in which he has an interestwhich (together with any interest of a connected person) to his knowledge is material interest.Notwithstanding the above, a Director shall be entitled to vote (and be counted in the quorum) on: (a)any contract in which he is interested by virtue of his interest in shares or debentures or other securitiesof or otherwise in or through the Company; (b) the giving of any guarantee, security or indemnity tohim in respect of money lent or obligations incurred by him or by any other person at the request of, orfor the bene¢t of, the Company or any of its subsidiary undertakings; or the giving of any guarantee,security or indemnity to a third party in respect of a debt or obligation of the Company or any of itssubsidiary undertakings for which he himself has assumed responsibility in whole or in part andwhether alone or jointly with others under a guarantee or indemnity or by the giving of security; (c) anymatter relating to an o¡er of shares, debentures or other securities of or by the Company or any of itssubsidiary undertakings in which o¡er the Director is or may be entitled to participate as a holder ofsecurities or in the underwriting or sub-underwriting of which the Director is to participate; (d) anycontract, transaction, arrangement or proposal to which the Company is or is to be a party relating toanother company, including any subsidiary of the Company, in which he and any persons connectedwith him do not to his knowledge (directly or indirectly) hold an interest in shares (as that term is used

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in Part 22 of the Companies Act 2006) whether as an o⁄cer, shareholder, creditor or otherwiserepresenting one per cent. or more of any class of the equity share capital, or the voting rights, in thatcompany or of any other company through which his interest is derived; (e) any contract, transaction,arrangement or proposal for the bene¢t of employees of the Company or any of its subsidiaryundertakings (including in relation to a pension fund, retirement, death or disability bene¢ts scheme orpersonal pension plan) which does not award him any privilege or bene¢t not generally awarded to theemployees to whom the arrangement relates; and (f) any contract, transaction, arrangement orproposal concerning insurance which the Company proposes to maintain or purchase for the bene¢t ofdirectors or for the bene¢t of persons including directors.

(l) For so long as Francis Gugen, Andrew Austin and Brent Cheshire collectively hold shares representingmore than 75 per cent. of the outstanding voting rights comprised in the issued ordinary share capitalof the Company, Mr Gugen in his capacity of Chairman of the Board shall have a second casting votein the event of deadlock on voting at Board Meetings. This second casting vote will fall away in theevent that the aggregate shareholdings of Francis Gugen, Andrew Austin and Brent Cheshire fallbelow 75 per cent. of the outstanding voting rights comprised in the issued ordinary share capital of theCompany.

6.1.7 Borrowing powersThe board of Directors may exercise all the powers of the Company to borrow money and to mortgage orcharge all or any part of its undertaking, property and assets (both present and future) and uncalled capitaland to issue debentures and other securities, whether outright or as collateral security for any debt, liabilityor obligation of the Company or of any third party. The board of Directors shall restrict the borrowings ofthe Company and exercise all voting and other rights or powers of control exercisable by the Company inrelation to its subsidiary undertakings (if any) so as to secure (as regards subsidiary undertakings only so faras by such exercise it can secure) that the aggregate principal amount outstanding at any time in respect of allborrowings by the Enlarged Group (exclusive of any borrowings which are owed by one Enlarged Groupcompany to another Enlarged Group company) after deducting the amount of cash deposited will not,without the previous sanction of the Company in general meeting, exceed an amount equal to »100,000,000or any higher limit ¢xed by ordinary resolution of the Company which is applicable at the relevant time.

6.1.8 MeetingsSubject to the provisions of the Act, an annual general meeting shall be called by at least twenty-one cleardays’ notice, and all extraordinary general meetings shall be called by at least fourteen clear days’ notice. Thenotice should specify the place, the date and the time of meeting and the general or special nature of businessto be transacted. A general meeting shall, notwithstanding that it has been called by shorter notice than thatspeci¢ed above, be deemed to have been duly called if it is so agreed the case of an annual general meeting, byall the members entitled to attend and vote at the meeting; and in the case of any other meeting, by a majorityin number of the members having a right to attend and vote at that meeting, being a majority togetherholding not less than 95 per cent. in nominal value of the shares giving that right.

6.1.9 Unclaimed dividendsAny dividend which has remained unclaimed for twelve years from the date when it became due for paymentshall, if the directors so resolve, be forfeited, revert to and cease to remain owing by the Company.

6.2 Mandatory BidsThe Takeover Code applies to the Company. Under the Takeover Code, if an acquisition of an interest inshares, whether by a series of transactions over a period of time or not were to increase the aggregateinterests of the acquiror and its concert parties to an interest in shares carrying 30 per cent. or more of thevoting rights in the Company, the acquiror and, depending on the circumstances, its concert parties would berequired (except with the consent of the Panel) to extend o¡ers for the outstanding shares in the Company ata price not less than the highest price paid for the Ordinary Shares by the acquiror or its concert partiesduring the previous 12 months. This requirement would also be triggered by any acquisition of an interestshares by a person holding (together with its concert parties) shares carrying between 30 and 50 per cent. ofthe voting rights in the Company if the e¡ect of such acquisition were to increase that person’s percentage ofshares voting rights in which he is interested. There are no provisions in the New Articles of Association ofthe Company delaying, deterring or preventing a change of control of the Company.

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6.3 Mandatory compulsory purchase or ‘‘squeeze out’’ provisionsSections 974 to 991 of the Companies Act 2006 are applicable to the Company, so should a takeover o¡er bemade for all the Ordinary Shares then in issue (other than any already held by the o¡eror) and the o¡eror, byvirtue of acceptances of the o¡er, has acquired or contracted to acquire not less than nine-tenths of suchOrdinary Shares, excluding any such shares held in treasury, the o¡eror may compulsorily acquire the rest ofsuch Ordinary Shares upon the same terms as those contained in the o¡er by serving a statutory notice oneach holder of such Ordinary Shares who has not accepted the o¡er. Further, a holder of Ordinary Shareswho has not accepted the o¡er may, where the o¡eror has acquired or contracted to acquire not less thannine-tenths of such Ordinary Shares, give notice to the o¡eror, requiring the o¡eror to purchase his OrdinaryShares. If the o¡eror has not previously served notice requiring the compulsory acquisition by the o¡eror ofthe outstanding Ordinary Shares it must serve notice upon each holder of such Ordinary Shares who has notaccepted the o¡er, within one month of the right of the holder to require the o¡eror to purchase his OrdinaryShares arising, setting out the rights of such holders to require the o¡eror to purchase their Ordinary Shareswhich may specify a time limit for the exercise of those rights which may end no earlier than three monthsafter the end of the period within which the o¡er can be accepted.

Where a notice has been served by the o¡eror on a holder of Ordinary Shares requiring the compulsoryacquisition of his Ordinary Shares, such holder may challenge the same by applying to the court within sixweeks of the notice being served upon him. The court may order that the o¡eror shall not be entitled toacquire the relevant Ordinary Shares or that it may only do so on di¡erent terms from those of the o¡er,although to succeed the relevant holder of Ordinary Shares will have to show that the terms of the o¡er areunfair. Where a holder of Ordinary Shares has served a notice upon an o¡eror, requiring the o¡er topurchase his Ordinary Shares, either such holder or the o¡eror may apply to the court for an order that therelevant Ordinary Shares shall be acquired on di¡erent terms to those set out in the o¡er. The court may notorder a holder of Ordinary Shares who is making an application to pay any costs or expenses unless itconsiders that the application was unnecessary, improper or vexatious, there has been unreasonable delay inmaking his application or unreasonable conduct on his part in conducting the proceedings.

6.4 Notice of 3 per cent. interestsSubject to certain quali¢cations and exceptions, Chapter 5 of the Admission and Disclosure Rules of theFinancial Services Authority requires that a person who acquires an interest in 3 per cent. or more of thevoting rights attaching to issued voting shares of a company whose shares are admitted to trading on AIMmust, within two business days of such acquisition, or of his becoming aware of the facts constituting theacquisition of the interest, notify the Company and the Financial Services Authority of his interest. If whilehe has such an interest, he acquires or disposes of an interest in 1 per cent. or more of the voting rightsattaching to issued voting shares of the Company he must notify that event, and must also notify thecessation of his having a 3 per cent. interest. Where a person is party to an agreement between two or morepersons which obliges them to adopt by concerted exercise of voting rights a lasting common policy towardsthe management of the Company, the interests of all such persons are aggregated for the purposes of thenoti¢cation provisions and each party is required to notify not only his own interests and changes therein butthose of the other parties to the agreement. All noti¢cations received under these provisions will be thesubject of a public announcement under the AIMRules.

6.5 Requirement to disclose interests in voting rightsUnder provisions contained in Part 22 of the Companies Act 2006 the Company may serve a notice on anyperson who it believes has, or may in the three previous years have had , an interest in its voting sharesrequiring them to give particulars of their interest, or, if no interest is then held, of any person to whom anyprevious interest was transferred. The Company must exercise its right to serve such a notice if required to doso by holders of at least 10 per cent. of its paid up voting shares. Failure to comply with a notice is a criminalo¡ence and the Company may impose sanctions against the shareholder concerned under its Articles ofAssociation including disenfranchisement, withholding of dividends and restrictions on transfer. ‘‘Interest’’is widely de¢ned and includes an interest of any kind in the shares, subject to certain speci¢c exclusions, but‘‘interest’’ includes, inter alia, an agreement to purchase shares or the right to do so by virtue of an optionand a person is interested in shares held by companies which he controls or by his spouse, civil partner andchildren and where a person is party to an agreement between two or more persons that includes provisionsfor the acquisition by any one or more of them of interests in shares of the Company which imposesobligations or restrictions on any one or more of the parties with respect to their use, retention or disposal ofsuch interests and such interests are acquired in pursuance of any agreement, each party to the agreement isregarded as interested in the shares held by each other such party.

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7. Information on the Concert PartyThe names and addresses of the members of the Concert Party are:

Andrew Austin The VineyardsBeaulieuBrockenhurstSO42 7YL

Brent Cheshire WoodpeckersThe HavenBillinghurstWest SussexRH14 9BE

Leigh Dyson 18 Paddock CloseEdwinstoweMans¢eldNottinghamshireNG21 9LP

Francis Gugen 38 Argyll RoadLondonW8 7BS

Edward Lasseter 1009 Fairfax DriveTuscaloosa,AL 35406USA

Andrew Purcell 9 Masson CourtWellington PointQLD, 4160Australia

Michael Smith 39 Bedford RoadSt AlbansHertfordshireAL1 3BH

Roger Smith 7 Newton RoadSwepstoneCoalvilleLeicestershireLE67 2SH

Further information about Andrew Austin, Brent Cheshire and Francis Gugen, who are Proposed Directorsof the Company is set out on pages 28 to 29 of Part I of this document and in paragraph 10 of Part VII of thisdocument.

Michael Smith has 15 years oil and gas experience as a geologist. He currently works as a consultant tocompanies in the E&P sector, particularly in relation to the giving of strategic corporate advice. He currentlyacts as Head of Geoscience for IGL for whom he has worked part time as a contractor since April 2004. MrSmith was previously a senior corporate strategic planner at Amerada Hess.

Roger Smith has 22 years mining and 14 years CBM experience in UK/Minerals Surveyor and works as aConsultant to energy sector specialising in mining, land and planning. He presently acts as DevelopmentManager for IGL for whom he has worked extensively as a contractor since May 2004.

Andrew Purcell joined Arrow Energy in August 2006 after being appointed Chief Executive O⁄cer of CH4Gas earlier in that year. Prior to that Mr Purcell was chief executive o⁄cer and managing director of SydneyGas. He is a mechanical engineer with over 20 years international experience in coal, base minerals andmetals and gas industries. He began his career in the UK coal mines, moved to South Africa where he tookup several engineering and executive roles before returning to the UK in 1994. He was part of a managementbuy-out team that purchased two of the few cash generative coal mines in 1996 and began to generate powerfor local markets from coal seam gas thereafter. From June 2000 to January 2004 Mr Purcell was Managing

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Director of Stratagas plc; where he worked with Mr Francis Gugen who was Chairman from September2000 until September 2005 and from whom IGL acquired a number of its Licences as described elsewhere inthis document, as a result of which acquisitionMr Purcell became a shareholder in IGL.

Leigh Dyson is currently pursuing non-Oil & Gas interests in the UK. From June 2000 to December 2003MrDyson was business development director, and then until April 2006, a director of StrataGas plc where heworked with Mr Francis Gugen who was Chairman from September 2000 until September 2005 and fromwhom IGL acquired a number of its Licences as described elsewhere in this document, as a result of whichacquisitionMr Dyson became a shareholder in IGL.

Edward Lasseter is currently pursuing entrepreneurial interests in the US in Oil & Gas including CBMinterests. From June 2000 to December 2003 Mr Lasseter was director of planning, and then until April2006, a director of Stratagas plc where he worked with Mr Francis Gugen who was Chairman fromSeptember 2000 until September 2005 and from whom IGL acquired a number of its Licences as describedelsewhere in this document, as a result of which acquisitionMr Lasseter became a shareholder in IGL.

8. Substantial shareholders8.1 Save for the following persons and those disclosed below, the Company is not aware of any person

who, at the date of this document and following the Acquisition, directly or indirectly, jointly orseverally, holds or will hold three per cent. or more of the ordinary share capital of the Company orexercises or could exercise control over the Company:

As at the date of thisdocument

Immediately followingthe Acquisition (taking

into account conversion ofthe LoanNotes but

assuming no exercise ofWarrants)

No. ofExistingOrdinary

Shares

% ofExistingOrdinary

Shares

No. of NewOrdinary

Shares

% ofEnlarged

ShareCapital

Francis Gugen 0 0 27,419,097 46.4%Andrew Austin 0 0 11,429,253 19.3%Brent Cheshire 0 0 11,429,253 19.3%Roger Smith 0 0 2,564,100 4.3%Merchant House Group Plc 5,000,000 5.9% 211,111 0.4%Libertas Capital Ventures Limited 5,000,000 5.9% 211,111 0.4%David Newton 5,000,000 5.9% 100,000 0.2%Ezenet Limited 3,000,000 3.5% 60,000 0.1%Wolf Martinick 3,000,000 3.5% 150,909 0.3%

8.2 All shareholders have identical voting rights in respect of the Existing Ordinary Shares held by them.

8.3 Save as disclosed below, there have been no dealings for value by the Existing Directors (pursuant toPart 22 of the Companies Act 2006) during the Disclosure Period or by IGL, the Concert Party(pursuant to Part 22 of the Companies Act 2006) nor any persons acting in concert with the ConcertParty during the Disclosure Period, in each case in relevant securities of the Company.

Date Nature of transaction

Number ofExistingOrdinary

Shares

Price ofExistingOrdinary

Shares(pence)

when dealtRichard Armstrong 18 April 2007 Shares subscribed 1,000,000 1pJohn Bryant 18 April 2007 Shares subscribed 2,518,500 1pPeter Redmond 18 April 2007 Shares subscribed 1,000,000 1pMerchant House Group Plc 18 April 2007 Shares subscribed 5,000,000 1p

8.4 Save as disclosed below, there have been no dealings for value in relevant securities of the Company bypersons falling within the categories speci¢ed in paragraphs (A), (B) and (D) of the de¢nition of‘‘associate’’ in paragraph 8.8(ii) below, in relation to the Company during the Disclosure Period:

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Date Nature of transaction

Number ofExistingOrdinary

Shares

Price ofExistingOrdinary

Shares(pence)

whengranted

Merchant Capital plc 10 April 2007 Grant ofWarrants 4,191,474 1p

8.5 Save as disclosed in paragraphs 8.1, 8.2, 8.3 and 8.4 above and 9.1 below:

(i) neither the Company nor any subsidiary of the Company, is interested in any relevant securities(as de¢ned below) or has rights to subscribe for, or short positions in any relevant securities ofany member of the Concert Party;

(ii) no Existing Director is interested directly or indirectly in any relevant securities of any member ofthe Concert Party;

(iii) no person acting in concert with the Company or any of its connected advisers is interested in anyrelevant securities or has rights to subscribe for, or short positions in any relevant securities of theCompany;

(iv) no associate of the Company, nor any person whose investments are managed on a discretionarybasis by fund managers (other than exempt fund managers) connected with the Company or anyof its associates, nor any employee bene¢t trust of the Company or any of its associates, nor anyconnected adviser (excluding exempt principal traders) to the Company or any of its associates(including any persons controlling, controlled by, or under the same control as any suchconnected adviser), owns or controls or is interested, directly or indirectly in any relevantsecurities or has rights to subscribe for, or short positions in any relevant securities of theCompany nor has any such person dealt for value in, or borrowed or lent any relevant securitiesduring the Disclosure Period;

(v) no member of the Concert Party or any person acting in concert with the Concert Party isinterested directly or indirectly in any relevant securities of the Company, or has any right tosubscribe for or had any short position in relation to relevant securities of the Company;

(vi) no director of IGL nor of any member of the Concert Party is interested in any relevant securitiesor has rights to subscribe for, or short positions in any relevant securities of the Company; and

(vii) neither IGL, nor the Concert Party nor any persons acting in concert with any of them has anyshort positions in or options over or rights to subscribe (or has borrowed or lent) any relevantsecurities.

8.6 No member of the Concert Party nor any person acting in concert with the Concert Party has dealt forvalue in any relevant securities of the Company during the Disclosure Period.

8.7 Neither the Company nor any person acting in concert with it has any short position in or options overor rights to subscribe (or has borrowed or lent) any relevant securities.

8.8 For the purposes of this Part VII:

(i) ‘‘relevant securities’’ in relation to any company are:

(A) shares comprised in the ordinary share capital (including, in the case of the Company,Ordinary Shares);

(B) securities convertible into such shares, rights to subscribe for such shares, options(including traded options) in respect of, and derivatives referenced to, any of the foregoing;

(ii) references to an ‘‘associate’’ of the Company are to any of:

(A) its subsidiaries, its associated companies and companies of which any such subsidiaries orassociated companies are associated companies;

(B) connected advisers to the Company (as de¢ned in the Takeover Code) or any companywithin (A) above, including persons controlling, controlled by or under the same control as,such connected advisers;

(C) the directors (together with their close relatives and related trusts) of the Company or acompany within (A) above; and

(D) the pension funds of the Company or a company within (A) above;

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(iii) references to a ‘‘connected adviser’’ are to:

(A) in relation to the Company or any associate of the Company an organisation which isadvising the Company or any such associate in relation to the Proposals and any corporatebroker to any such party (other than any corporate broker who is unable to act inconnection with the Proposals because of a con£ict of interest); and

(B) in relation to a person who is acting in concert with the Company, an organisation which isadvising that person in relation to the Proposals or in relation to the matter which is thereason for that person being a member of the relevant concert party;

(iv) ownership or control of 20 per cent. or more of the equity share capital of a company is regardedas the test of associated status and ‘‘control’’ means a holding or aggregate holdings of sharescarrying 30 per cent. or more of the voting rights attributable to the share capital of a companywhich are currently exercisable at a general meeting, irrespective of whether the holding oraggregate holding confers de facto control;

(v) ‘‘derivative’’ includes any ¢nancial product whose value, in whole or in part, is determined,directly or indirectly, by reference to the price of any underlying security;

(vi) ‘‘acting in concert’’ with a party mean any such person acting or deemed to be acting in concertwith that party for the purposes of the Takeover Code;

(vii) ‘‘arrangement’’ include indemnity or option arrangements and any agreement or understanding,formal or informal, of whatever nature relating to relevant securities which may be aninducement to deal or refrain from dealing;

(viii) ‘‘dealing’’ or ‘‘dealt’’ include:

(a) the acquisition or disposal of securities, of the right (whether conditional or absolute) toexercise or direct the exercise of the voting rights attaching to securities, or of generalcontrol of securities;

(b) the taking, granting, acquisition, disposal, entering into, closing out, terminating, exercisingor varying of an option in respect of any securities;

(c) subscribing or agreeing to subscribe for securities;

(d) exercising or converting any securities carrying conversion or subscription rights;

(e) the acquisition, disposal, entering into, closing out, exercise of any rights under, or varying,a derivative referenced, directly or indirectly, to securities;

(f) entering into, terminating or varying the terms of any agreement to purchase or sellsecurities; and

(g) any other action resulting, or which may result, in an increase or decrease in the number ofsecurities in which a person is interested or in respect of which he has a short position;

(ix) a person having an ‘‘interest’’ in relevant securities include where a person:

(a) owns securities;

(b) has the right (whether conditional or absolute) to exercise or direct the exercise of the votingrights attaching to securities or has general control of them;

(c) by virtue of any agreement to purchase, option or derivative, has the right or option toacquire securities or call for their delivery or is under an obligation to take delivery of them,whether the right, option or obligation is conditional or absolute and whether it is in themoney or otherwise; or

(d) is party to any derivative whose value is determined by reference to the price of securitiesand which results, or may result, in his having a long position in them.

(x) ‘‘short position’’ mean any short position (whether conditional or absolute and whether in themoney or otherwise) including any short position under a derivative.

9. Existing Directors’, Proposed Directors’ and other interests9.1 The interests and short positions in relevant securities of the Existing Directors, the Proposed

Directors, their immediate families and as far as they are aware having made due and careful enquiries,

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of persons connected with them, (pursuant to Part 22 of the Companies Act 2006) in the share capitalof the Company as at 26 November 2007 (being the latest practicable date prior to the publication ofthis document) and at Admission, all of which are bene¢cial unless otherwise stated are set out below:

As at date of this documentImmediately following implementation

of the Proposals

No. ofOrdinary

Shares

% ofExistingOrdinary

SharesNo of

Warrants

No. of NewOrdinary

Shares

% ofEnlarged

ShareCapital

No ofWarrants

John Bryant 2,518,500 2.97% 0 50,370 0.09% 110,000Peter Redmond 1,000,000 1.18% 0* 20,000 0.03% 110,000Richard Armstrong 1,000,000 1.18% 0 20,000 0.03% 110,000Francis Gugen 0 0% 0 27,419,097 46.39% 0Andrew Austin 0 0% 0 11,429,253 19.34% 0Brent Cheshire 0 0% 0 11,429,253 19.34% 0

* Mr Redmond is also a director of Merchant Capital Limited, a wholly owner subsidiary of Merchant House Group plc which owns5,000,000 shares and 4,191,474 warrants in the Company.

Full details of the outstandingWarrants are set out in paragraph 4 of this Part VII.

10. Existing Directors’ and Proposed Directors’ employment agreements and letters of appointment10.1 The following are particulars of the Existing Directors’ and the Proposed Directors’ employment

agreements or letters of appointment with the Company.

Executive Directors:

Francis Gugen

Mr Gugen’s services are provided to the Company pursuant to a letter agreement with the Companydated 27 November 2007 which is conditional upon Admission. This agreement employs Mr Gugenunder the same terms and conditions (with such amendments as are noted below) he was previouslyemployed by IGL under an agreement dated 9 December 2005 (as amended from time to time). Underthe agreement Mr Gugen has agreed to act as executive chairman to the Company for which he willdevote such time as is required require to discharge his duties, which is expected to be not less than oneand a half days per week. The terms of his engagement as executive Chairman are terminable by eitherparty giving 12 months notice in writing. The appointment carries a salary of »100,000 per annum. MrGugen will be eligible to receive a bonus dependent upon the achievement of various objective targetsand milestones to be set by the Remuneration Committee.

Andrew Austin

Mr Austin’s services are provided to the Company pursuant to a letter agreement with the Companydated 27 November 2007 which is conditional upon Admission. This agreement employs Mr Austinunder the same terms and conditions (with such amendments as are noted below) he was previouslyemployed by IGL under an agreement dated 9 December 2005 (as amended from time to time). Underthe agreement Mr Austin has agreed to act as Chief executive o⁄cer of the Company for which he willdevote all of his working time. The terms of his engagement as Chief Executive O⁄cer is terminable byeither party given 12 months notice in writing. The appointment carries a salary of »200,000 perannum. Mr Austin will be eligible to receive a bonus dependent upon the achievement of variousobjective targets and milestones to be set by the Remuneration Committee.

Brent Cheshire

Mr Cheshire’s services are provided to the Company pursuant to a letter agreement with the Companydated 27 November 2007 which is conditional upon Admission. This agreement employs Mr Cheshireunder the same terms and conditions (with such amendments as are noted below) he was previouslyemployed by IGL under an agreement dated 9 December 2005 (as amended from time to time). Underthe agreement Mr Cheshire has agreed to act as technical director to the Company for which he willdevote such time as is required to discharge his duties, which is expected to be two days per week. Theterms of his engagement as technical director is terminable by either party given 12 months notice inwriting. The appointment carries a salary of »100,000 per annum. Mr Cheshire will be eligible to

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receive a bonus dependent upon the achievement of various objective targets and milestones to be setby the Remuneration Committee.

Non-Executive Directors:

Peter Redmond

Mr Redmond’s services are provided to the Company pursuant to an agreement entered between theCompany and Mr Redmond on 29 October 2007, e¡ective from 10 April 2007. Under the agreement,Mr Redmond has agreed to act as non-executive director to the Company for which he is entitled to afee of »15,000 per annum for working up to 3 days in any month with a day rate of »750 for daysworked in excess of that amount. The engagement is terminable by the Company on 3 months’ writtennotice, or immediately by the Company in the event that Mr Redmond ceases to be a director of theCompany for any reason provided that Mr Redmond receives the amount that he would otherwise bedue for working such notice period. Were the Company to terminate Mr Redmond’s engagementbefore the ¢rst year anniversary of Admission, he would (if greater than the amount otherwise due)instead be entitled to the amount due for working the unexpired period of such ¢rst year.

Conditional upon Admission Mr Redmond will enter into a new agreement with the Company. Underthe terms of the new agreement Mr Redmond agrees to act as non-executive director of the Companyfor a ¢xed period of 6 months, terminable after 3 months by either party on 3 months’ notice and at afee of »15,000 based on 12 days commitment per annum with any additional days being charged on apro rata basis. This fee arrangement will be reviewed after 6 months.

Richard Armstrong

Mr Armstrong’s services are provided to the Company pursuant to an agreement entered into on29 October 2007, e¡ective from 10 April 2007. Under the agreement, Mr Armstrong has agreed to actas non-executive director to the Company for which he is entitled to a fee of »15,000 per annum forworking up to 3 days in any month with a day rate of »750 for days worked in excess of that amount.The engagement is terminable by the Company on 3 months’ written notice, or immediately by theCompany in the event that Mr Armstrong ceases to be a director of the Company for any reasonprovided that Mr Armstrong receives the amount that he would otherwise be due for working suchnotice period. Were the Company to terminate Mr Armstrong’s engagement before the ¢rst yearanniversary of Admission, he would (if greater than the amount otherwise due) instead be entitled tothe amount due for working the unexpired period of such ¢rst year.

Conditional upon Admission Mr Armstrong will enter into a new agreement with the Company.Under the terms of the new agreement Mr Armstrong agrees to act as non-executive director of theCompany for a ¢xed period of 6 months, terminable after 3 months by either party on 3 months’ noticeand at a fee of »15,000 based on 12 days commitment per annum with any additional days beingcharged on a pro rata basis. This fee arrangement will be reviewed after 6 months.

John Bryant

Mr Bryant’s services are provided to the Company pursuant to an appointment agreement and aconsultancy agreement entered into between the Company and Axeman Overseas Limited (the‘‘Consultant’’) on 29 October 2007, e¡ective from 10 April 2007. Under the terms of appointment, MrBryant has agreed to act as a non-executive director of the Company for no remuneration and theengagement is terminable on three months’ written notice from the Company or one months’ noticefrom Mr Bryant. Under the consultancy agreement, the Consultant has agreed to provide the servicesof Mr Bryant for which the Consultant will receive a fee of »15,000 per annum for working up to 3 daysin any month with a day rate of »750 for days worked in excess of that amount. The consultancyagreement can be terminated on the same terms as the appointment agreement.

Conditional upon Admission Mr Bryant’s terms of appointment and the consultancy agreement withAxeman Overseas Limited will be amended to extend them to run for a ¢xed term of 6 months from thedate of Admission and to be terminable after his ¢rst three months by any party on 3 months’ notice.Fees payable will be »15,000 based on 12 days commitment per annum with any additional days beingcharged on a pro rata basis. This fee arrangement will be reviewed after 6 months.

10.2 Save for the payment in lieu of notice, there are no employment agreements or letters of engagementbetween any Existing Directors or Proposed Directors and the Company which provide for bene¢tsupon termination of employment.

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10.3 Save as disclosed in paragraph 10.1, no service contracts, consultancy agreements or letters ofappointment have been entered into or amended within 6 months of the date of this document with theCompany.

10.4 The aggregate remuneration paid and bene¢ts in kind granted to the Existing Directors for the yearended 31 December 2006 was »277,000. It is estimated that the aggregate remuneration paid andbene¢ts in kind granted to the Existing Directors for the year ending 31 December 2007, under thearrangements in force at the date of this document, will amount to approximately »65,000.

10.5 None of the Directors are, nor have been within the ¢ve years prior to the publication of this document,partners in any partnerships. The Directors have held the following directorships (in addition, whererelevant, to being a director of the Company) within the ¢ve years prior to the publication of thisdocument.

Director Current Directorships Past Directorships

John Bryant Attiki Denmark ApSAttiki Gas Supply Company SAAxeman Overseas LimitedCinergy Global Hellas s.a.Gas Turbine E⁄ciency LimitedWeatherly International plc

Anglian Ash LimitedAnglian Straw LimitedCinergy Global (Cayman) Holdings, IncCinergy Global Ely, Inc.Cinergy Global Foote Creek, IncCinergy Global Hydrocarbons PakistanCinergy Global Power (UK) LimitedCinergy Global Power Iberia SACinergy Global Power Services LimitedCinergy Global Power, Inc.Cinergy Global Resources Inc..Cinergy Global Trading LimitedCinergy Global Tsavo PowerCinergy Holdings, BVCinergyMPI II, Inc.CinergyMPI IV, Inc.CinergyMPI IX, Inc.CinergyMPI V, Inc.CinergyMPI VI, Inc.CinergyMPI VII, Inc.CinergyMPI VIII, Inc.CinergyMPI X, Inc.CinergyMPI XI, Inc.CinergyMPI XII, Inc.CinergyMPI XIII, Inc.CinergyMPI XIV, Inc.CinergyMPI XV, Inc.Cinergy Renewable Trading LimitedCinergy Trading andMarketingLimitedCinergy Zambia BVCommercial Electricity SuppliesLimitedConstrucciones Y RepresentacionesIndustriales, S.A.Copperbelt Energy Corporation PLCEly Power Limited EPR Ely LimitedEPR Ely Power LimitedIPS-Cinergy Power LimitedMidlands Hydrocarbons (Bangladesh)LimitedMidlands Power (HPL) LimitedMidlands Power (Indus) LimitedMidlands Power (One) LimitedUK Electric Power LimitedVendresse Limited

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Director Current Directorships Past Directorships

Peter Redmond Bella Media PlcBWAGroup plcFort¢eld Investments plcMerchant Capital LimitedMerchant House Finance LimitedSynigence PlcWeatherly International plcWestover Wines plc

Artilium plcMerchant House Group plcPetsome PlcStratus Holdings plcVictoria Oil & Gas Central AsiaLimited

RichardArmstrong

AlphaWorx plcBWAGroup plcBelisarius LimitedCamvaxx LimitedFort¢eld Investments plc (Ireland)Safevaxx LimitedStageworx plcVoipnetwork Limited

Artilium plcBellaMedia plcBriar Abbey Services LimitedCrescent Technology Ventures plcCrescent Hydropolis Resorts plcHolroyd Consultants LimitedMerchant House Group plcParallel Media Group plcVictoria Oil & Gas Central AsiaLimitedWeatherly International plcZoa Corporation plc

Francis Gugen Britannia Building SocietyChrysaor Holdings LimitedGugen Consulting LimitedEcho Petroleum LimitedFraudscreen LimitedPetroleum Geo-Services ASARaft Trustees Limited

CH4 Energy LimitedCH4 LimitedCH4 Pipelines LimitedPermagas LimitedStratagas CBMLimitedStratagas Plc

Andrew Austin Austin and Austin Limited Recombinagen LimitedTrafalgar Marine LimitedTrafalgar International Marine LimitedM. A. Keeping LimitedWhit¢eld Solar Limited

Brent Cheshire Cheshire Energy Resources LimitedDong E&P (UK) Limited

Amerada Hess Energy ApsAmerada Hess Nominees LimitedAmerada Hess LimitedAmerada Hess NWEHoldingsAmerada Hess International LLCAmerada Hess ApsAmerada Hess Scandinavia ApsAmerada Hess Norge A/SUnited KingdomO¡shore OperatorsAssociation Limited

10.6 Save as disclosed below, none of the Directors has:

(a) any unspent convictions in relation to indictable o¡ences;

(b) had a bankruptcy order made against him or entered into any individual voluntary arrangement;

(c) been a director of a company which has been placed in receivership, compulsory liquidation,creditors’ voluntary liquidation or administration or entered into a company voluntaryarrangement or any composition or arrangement with its creditors generally or any class of itscreditors whilst he was a director of that company at the time of, or within the twelve monthspreceding, such events;

(d) been a partner of a ¢rm which has been placed in compulsory liquidation or administration orwhich has entered into a partnership voluntary arrangement whilst he was a partner of that ¢rmat the time of, or within twelve months preceding, such events;

145

(e) had any asset belonging to him placed in receivership or been a partner of a partnership whoseassets have been placed in receivership whilst he was a partner at the time of, or within twelvemonths preceding, such receivership; or

(f) been publicly criticised by any statutory or regulatory authority (including any recognisedprofessional body) or ever been disquali¢ed by a court from acting as a director of a company orfrom acting in the management or conduct of the a¡airs of any company.

Mr Redmond is a director of BWA Group Plc, Bella Media plc, Weatherly International plc, all ofwhich are or, have in the past been, subject to CVAs. Mr Redmond joined the boards of the companiesconcerned in order to assist in the re¢nancing and reconstruction immediately after the CVAs had beenput in place. In all cases the CVAs have concluded or are in the course of satisfactory conclusions.

Mr Armstrong was a director of Crescent Technology Ventures plc and of Holroyd ConsultantsLimited which went into members’ voluntary liquidation on a solvent basis. Mr Armstrong is a directorof BWA Group plc and was formerly a director of Parallel Media Group plc, Bella Media plc andWeatherly International plc all of which are or, have in the past been, subject to CVA’s. Mr Armstrongjoined the boards of the companies concerned in order to assist in the re¢nancing and reconstructionimmediately after the CVA’s had been put in place. In all cases the CVAs have concluded or are in thecourse of satisfactory conclusions.

10.7 No Director has been interested in any transaction with the Company, which was unusual in its natureor conditions or signi¢cant to the business of the Company during the current or previous ¢nancialyear or during any previous ¢nancial year that remains outstanding or unperformed.

10.8 Andrew Austin, a Proposed Director, will receive a bonus of »40,000 on the successful completion ofthe Acquisition pursuant to an agreement with IGL.

11. Lock-in, orderly market arrangements and agreements with Nominated Adviser and Broker11.1 Lock-ins and orderly market arrangements

The Existing Directors and the Proposed Directors have entered into lock-in and orderly marketingarrangements with Libertas Capital pursuant to which the Directors have undertaken, subject tocertain limited exceptions, including a sale in the event of an o¡er for all the New Ordinary Shares inthe Company, not to dispose of any of the New Ordinary Shares which they hold immediatelyfollowing Admission for a period of 12 months, in the case of the Proposed Directors, and 6 months, inthe case of the Existing Directors (the ‘‘Directors Lock-up Period’’), following Admission without theprior written consent of Libertas Capital. In all cases the Directors Lock-up Period is capable of waiveror being shortened by agreement between Libertas Capital and the Director or Directors concerned inrespect of all or a part of the New Ordinary Shares subject to the Lock-up arrangement. Each Directorhas also agreed that, in the 12 months in the case of the Proposed Directors and 6 months in the case ofthe Existing Directors, following the expiry the Directors Lock-up Period, any sale of New OrdinaryShares held by him will be e¡ected through Libertas Capital in such orderly manner as Libertas Capitalmay reasonably require with a view to maintaining an orderly market in the share capital of theCompany.

Each member of the Concert Party, other than the Proposed Directors whose arrangements aredescribed above (the ‘‘Other Concert Party Members’’), is expected, as part of the Scheme, toundertake to the Company and Libertas Capital that, save in certain limited circumstances, he will notdispose of any of more than 15 per cent. of the New Ordinary Shares held by him after Admission for aperiod of twelve months following Admission. Such period may be waived or shortened in respect ofsome or all of the New Ordinary Shares by agreement between Libertas Capital and the Other ConcertParty Member of Members concerned. Each of the Other Concert Party Members is also expected, aspart of the Scheme, to further undertake to the Company and Libertas Capital that, in the 24 monthsafter Admission, any sale of New Ordinary Shares held by him will be e¡ected through Libertas Capitalin such orderly manner as Libertas Capital may reasonably require with a view to maintaining anorderly market in the share capital of the Company.

In all cases the lock-ins and orderly market arrangements do not prevent the restricted party fromaccepting or agreeing to accept and o¡er made from the entire issued share capital of the Company.

11.2 On 20 March 2007 the Company entered into an agreement with Libertas Capital pursuant to whichLibertas agreed to act as nominated adviser and broker to the Company for a fee in the sum of »25,000per annum. The Company has given warranties and indemnities typical for this kind of transaction.

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The agreement may be terminated by either party by written notice. This agreement will be replaced on31March 2008 and by the agreement described in the paragraph below.

11.3 On 17 October 2007, the Company entered into an agreement with Libertas Capital pursuant to which(i) Libertas Capital agreed to act as ¢nancial adviser and Rule 3 adviser to the Company with respect tothe Proposals for a corporate ¢nance fee of »200,000 of which »100,000 is payable in cash and »100,000in New Ordinary Shares at the Reference Price; and (ii) conditional upon Admission pursuant to whichLibertas Capital agreed to act as nominated adviser and broker to the Company commencing from1 April 2008 for a fee of »50,000 per annum. The Company has given certain indemnities which are notunusual in this type of transaction. The agreement may be terminated by either party by written notice.

12. Material contracts12.1 In addition to the Nominated Adviser and Broker Agreements details of which are set out in paragraph

11 above, the following contracts (not being contracts entered into in the ordinary course of business)have been entered into by the Company or another member of the Enlarged Group (i) within the twoyears immediately preceding the date of this document and are, or may be, material; or (ii) at any timeand contain provisions under which any member of the Enlarged Group has an obligation orentitlement which is material to the Enlarged Group at the date of this document.

12.2 The following contracts, not being contracts entered into in the ordinary course of business, have beenentered into by the Company (or its subsidiaries) in the two years prior to the date of this document,and are, or may be, material:

(a) The share warrant agreements set out at paragraph 4.3, above.

(b) On 30 July 2006 KP Renewables (Operations) Limited entered into a framework agreement withBizzEnergy Limited, as amended by an amendment agreement dated 16 May 2007, pursuant towhich KP Renewables (Operations) Limited has the right to require BizzEnergy to purchase fromKP Renewables (Operations) Limited renewable energy generated by facilities developed by KPRenewables (Operations) Limited within England and Wales. The parties to the frameworkagreement acknowledge that the terms of the agreement allow KP Renewables (Operations)Limited to develop, ¢nance, construct and commission a series of renewable energy plants in theknowledge that BizzEnergy Limited will take and pay for the energy and associated bene¢ts fromeach renewable energy plant. Subject to termination the agreement shall continue until the earlierof (a) the date on which KP Renewables (Operations) Limited has entered into obligations havinga total aggregate contracted output of 150MW or (b) 30 June 2008.

(c) On 18 October 2007 the Company created the Loan Notes by deed. The loan note instrumentcreates up to »900,000 of Loan Notes issuable in denominations of »1.00 which are convertibleinto Ordinary Shares at a price of 1.1p per Existing Ordinary Share, equivalent to 55p per NewOrdinary Share. The loan note instrument contains additional provisions governing the transferof the Loan Notes and the holding of meetings of holders of the Loan Notes. In connection withthe issue of the Loan Notes, the Company paid an aggregate commission of »44,127.30 to Fiskeplc andMerchant Capital plc.

(d) On 27 November 2007 the Company and KP Renewables (Operations) Limited entered into anagreement with KP Wind and Biomass Limited, conditional upon Admission, for the disposal ofthe Existing Projects to KP Wind and Biomass Limited. The agreement contains an indemnity infavour of the Company and KP Renewables (Operations) Limited in respect of any furthercreditor claims under the CVA. The consideration is the sum of »1.00 subject to upwardadjustment in the event that the Company expends any sums on further development of theExisting Projects prior to completion of the agreement which would result in its net cash balanceimmediately prior to Admission falling below »1,409,000.

(e) On 27 November 2007 the Company entered into an agreement with Blenheim Energy Limited,conditional upon Admission, for the disposal of KP Wind and Biomass Limited to BlenheimEnergy Limited. The price for the sale is »1.00. The agreement contains a guarantee in favour ofthe Company of the obligations of KP Wind and Biomass Limited pursuant to the agreementreferred to at paragraph 12.2(a) above.

(f) On 27 November 2007 the Company entered into the Implementation Agreement with IGL,Andrew Austin, Brent Cheshire and Francis Gugen. The Implementation Agreement sets out andregulates the steps to be taken to implement the Scheme and contains warranties and

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representations from Andrew Austin, Brent Cheshire and Francis Gugen in favour of theCompany concerning the business of IGL. The Implementation Agreement also containsrepresentations from the Company to Andrew Austin, Brent Cheshire and Francis Gugenconcerning the Company and its operations.

(g) The Company executed an engagement letter with Businesscare Solutions Limited (‘‘BSL’’) on23 February 2007 pursuant to which BSL agreed to provide services in connection with the CVA.BSL agreed a fee of »10,000 plus Ordinary Shares with a value of »5,000 at the re¢nancing priceof 1p per Share in consideration for its services.

(h) The Company entered into any engagement letter with Merchant Capital plc on 1 February 2007.Under this agreement Merchant Capital plc received »127,500 for corporate ¢nance services inrelation to the reconstruction and re¢nancing of the Company of which »30,000 was taken inOrdinary Shares at the re¢nancing price, and a grant of warrants (described in paragraph 4.3above). This agreement was amended on 30 April 2007 pursuant to which Merchant Capital plcwas engaged to provide additional services for a monthly retainer of »2,000 for one full day perweek. This retainer was terminated on 13 September 2007.

(i) The Company entered into an engagement letter with Merchant Capital plc on 3 November 2007under which Merchant Capital plc agreed to act as adviser to the Company in respect of theAcquisition in consideration for the issue of »100,000 in value of New Ordinary Shares at thePurchase Price.

12.3 The following contracts, not being contracts entered into in the ordinary course of business, have beenentered into by IGL in the two years prior to the date of this document, and are, or may be, material:

(a) Agreements with Nexen

(i) Asset Purchase Agreement and related documents

On 9 December 2005, IGL entered into an asset purchase agreement with Nexen in respectof certain licences (PEDLs 40-1, 56-1, 78-1, 115, 92-1, 116 and 145).

Pursuant to the terms of the agreement, IGL sold an undivided legal interest and an 80 percent. bene¢cial interest in each of the licences. The consideration for the sale was»1,200,000.

By letter agreement dated the same date as the asset purchase agreement, IGL agreed that ifit was considering marketing or selling o¡, or if it received an unsolicited o¡er for theacquisition of, all or part of its interest in a licence and in and under any joint operatingagreement, it would notify Nexen, and allow Nexen to make an o¡er for all or part of suchinterest. The letter did not impose any obligation on IGL to accept any such o¡er fromNexen.

In connection with the asset purchase agreement, Nexen Petroleum (U.K) Limited (acompany incorporated in the UK with Nexen as its sole shareholder) gave an unconditionaland irrevocable guarantee to IGL in respect of the due and punctual performance by Nexenof all of its obligations and liabilities arising out of or in connection with the asset purchaseagreement, the carried interest agreements, the management services agreement and thesecondment agreement. The guarantee is a continuing security. Neither party may assignthe bene¢t of the guarantee without the consent of the other.

(ii) Management Services Agreement

On 9 December 2005, IGL and Nexen entered into a management services agreement.Pursuant to the terms of the agreement, IGL was required to procure that Francis Gugen,Brent Cheshire and Andrew Austin were made available to provide management, advisoryand technical services in respect of the licences.

Under the terms of the management services agreement a service fee of »2,000,000 (plusVAT), was payable in four equal instalments with the ¢nal two payments of »500,000 eachbeing payable on 2 January 2008 and 2 January 2009. If, at any time prior to 31 December2009, Francis Gugen, Andrew Austin or Brent Cheshire cease to own at least 50 per cent. ofthe issued share capital of IGL (which provision was subsequently varied to allow theCompany to acquire IGL) or cease to form a majority of the board, no further instalment ofthe management service fee is payable.

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On 18 May 2007, the parties entered into an additional management services agreement forthe provision of 100 days of additional management services to be provided during thecalendar year 2007. »150,000 was payable by Nexen on 18 May 2007 as a fee for theprovision of these services.

(iii) Licence Application Agreement

On 15 May 2006, IGL and Nexen entered into a licence application agreement in respect ofthe 13th onshore licensing round.

Consistent with the existing contractual relations between IGL and Nexen concerning thelicences, the parties agreed that the rights, bene¢ts, assets, obligations and liabilities inrespect of any application made or licence granted should be in the following proportions:Nexen 80 per cent.; IGL 20 per cent.

The 13th onshore licensing round has not currently been announced and consequently noapplications have been made. It is expected that it shall be announced by the end of 2007.

(iv) Subcontractor Agreement

On 8 August 2007, IGL entered into an agreement with MAS Energy Solutions Ltd, aconsultancy company, pursuant to which that company agreed to perform managementservices for IGL for the period of twelve months from 1 September 2007 to 31 August 2008.Either party may, at any time, terminate the agreement or the services on giving 90 days’prior written notice to the other party.

(b) Licence Agreements with Nexen

(i) Joint Operating Agreements in respect of PEDLs 040-1, 056-1, 078-1, 092-1, 115, 116 & 145

On 9 December 2005, Nexen and IGL as the present holders of the licences entered intojoint operating agreements for the purpose of de¢ning their respective rights, interests,duties and obligations in connection with the licences and all petroleum producedthereunder.

The scope of the joint operating agreements shall extend to the exploration for, thedevelopment of and the production of petroleum under the licences but shall not extend toany joint ¢nancing arrangements.

All joint property, joint petroleum and all costs and obligations incurred in the conduct ofthe joint operations shall be owned and borne by the parties in proportion to theirrespective percentage interests (Nexen 80 per cent. and IGL 20 per cent.).

Nexen is designated as the operator under the joint operating agreements and has beenapproved as such by the Secretary of State for Berr.

Each party shall have access and inspection rights under the terms of the joint operatingagreements.

Nexen shall obtain and maintain in respect of joint operations all insurance required underthe licences or any applicable law.

Each of the parties shall have the right to take in kind and separately dispose of itspercentage interest share of the total quantities of petroleum won and saved under jointoperations. Provided that Nexen shall have the right to use, in any joint operations, as muchof such petroleum as is needed by it.

Each party shall have the obligation to lift and dispose of its percentage interest share ofsuch petroleum in accordance with the quantities and procedures agreed between theparties but so that the rights of each party to lift petroleum to which they are entitled is notprejudiced.

The terms of the joint operating agreements and all data and information acquired orreceived by any party under the agreement shall be held con¢dential during the continuanceof the joint operating agreements and for a period of 5 years thereafter.

If both parties give notice to withdraw from any of the joint operating agreements within 30days of one another no assignment shall take place and it shall be deemed that the joint

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operations and licences conducted under such joint operating agreements have beenabandoned and surrendered at the earliest date.

If less than all the other parties give such notice to withdraw, the withdrawing parties shallassign their respective interests in such licences and under the respective joint operatingagreement to the non withdrawing party.

Subject to certain restrictions and conditions including the consent of the Secretary of Statefor Berr and the other parties any party may at any time upon notice to the other partiesassign all or part of its interest.

(ii) Carried Interest Agreements in respect of PEDLs 040-1, 056-1, 078-1, 092-1, 115, 116 & 145

On 9 December 2005, IGL and Nexen as holders of the licences entered into carried interestagreements to govern Nexen’s payment obligations and rights in IGL production as aconsequence of the joint operating agreements.

In consideration of the transfer of an interest in the licences pursuant to the Asset PurchaseAgreement Nexen shall bear the cost of joint operations conducted pursuant to anapproved budget and IGL shall grant to Nexen the right to lift a proportion of itshydrocarbon entitlement derived from joint operations. This agreement operates on alicence by licence basis.

Nexen’s obligations shall immediately cease when the combined payments made pursuantto the carried interest agreements in respect of these licences are equal to »5,000,000.

Neither party shall assign or dispose of any interest in the carried interest agreementswithout ¢rst having made an assignment of an equivalent percentage interest under therespective joint operating agreement and having obtained the prior written consent of theother party.

(iii) Deeds of Assignment in respect of PEDLs 040-1, 056-1, 078-1, 092-1, 115, 116 & 145

On 9 December 2005 IGL assigned to Nexen all rights, interest, obligations and liabilities ofIGL in under and pursuant to and in respect of the licences. The Secretary of State for Berrgave his consent to the assignments by way of a letter dated 8 December 2005.

IGL and Nexen jointly and severally covenant in favour of the Secretary of State for Berrthat they will perform and observe the terms and conditions contained in the licences.

(iv) Carried Interest Agreements in respect of PEDL 107 & SPPL 1481

On 18 May 2007 IGL and Nexen entered into carried interest agreements in respect of jointoperations under these licences. IGL and Nexen as the holders of the licences will enter intojoint operating agreements in due course, in a form similar to those that apply to the otherLicences.

In consideration for IGL granting to Nexen the right to lift a proportion of its hydrocarbonentitlement derived from joint operations Nexen shall bear the cost of joint operationsconducted pursuant to an approved programme and budget.

Nexen’s obligations shall cease when aggregate payments made pursuant to the initialcarried interest agreements and the carried interest agreements in respect of PEDL 107 andSPPL 1481 are equal to »5,750,000.

If, at any time prior to 18 May 2008, Francis Gugen, Andrew Austin and Brent Cheshirecease to own at least 50 per cent. of the issued share capital of IGL (which provision wassubsequently varied to allow the Company to acquire IGL), IGL shall pay to Nexenamounts paid by Nexen, together with interest. All rights under the agreement shallterminate.

Neither party shall assign or dispose of any interest in this agreement without ¢rst havingmade an assignment of an equivalent percentage interest under the respective jointoperating agreement and having obtained the prior written consent of the other party.

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(v) Deed of Assignment in respect of PEDL 107

On 23 January 2007 pursuant to a deed of assignment, Alkane Energy UK Limitedassigned all rights, interests, obligations and liabilities in respect of the licence to Nexen50 per cent. and IGL 50 per cent. The Secretary of State for Berr gave his consent to thisassignment by way of letter dated 22 January 2007.

IGL and Nexen jointly and severally covenant in favour of the Secretary of State that theywill perform and observe the terms and conditions contained in the licence.

(vi) Deed of Assignment in respect of SPPL 1481

IGL and Nexen Petroleum UK Limited assigned all rights, interests, obligations andliabilities in respect of the licence to Nexen and IGL to be held in equal proportions. Wehave not been provided with the Deed of Assignment approved by the Secretary of State on12 July 2007, but have been informed by the Company that the DTI has con¢rmed thatthese documents have been executed.

(c) Implementation Agreement

IGL is a party to the Implementation Agreement described at paragraph 12.2(d) above.

12.4 Related party transactions (which for these purposes are as set out in the standards adopted accordingto the Regulation (EC) No 1606/2002) that members of the Enlarged Group have entered into duringthe period from 1 April 2004 to 31 December 2004 and the two ¢nancial years ended 31 December2005, and 31 December 2006 and up to the date of this document are set out on pages 113 to 115 of PartV(a) of this document.

12.5 No members of the Concert Party have entered into any contracts (not being contracts in the ordinarycourse of business) in relation to the Proposals during the two years immediately preceding the date ofthis document which are, or may be, material other than the Implementation Agreement details ofwhich appear in paragraph 12.2(f) above, the bonus arrangement with Mr Austin described inparagraph 10.8 above, and a bonus of »50,000 payable to Michael Smith in the event that IGL or itsparent undertaking raises at least »2,000,000 of new equity share capital.

13. Working capitalThe Directors are of the opinion having made due and careful enquiry, that the working capital available tothe Enlarged Group will be su⁄cient for its present requirements, that is for at least the next 12 months fromthe date of Admission.

14. LitigationThere are no governmental, legal or arbitration proceedings, active, pending or threatened against, or beingbrought by, the Company or any of its subsidiaries, which may have or have had during the 12 monthspreceding the date of this document a signi¢cant e¡ect on the Company’s ¢nancial position or pro¢tability.

15. Overseas Securities LawsIt is the responsibility of any person (including, without limitation, nominees and trustees) outside theUnited Kingdom wishing to purchase the New Ordinary Shares to satisfy himself as to the full observance ofthe laws of the relevant jurisdiction in connection therewith, including the obtaining of any governmental orother consents which may be required, the compliance with other necessary formalities and the payment ofany issue, transfer or other taxes due in such jurisdiction. The comments set out in this paragraph are intendedas a general guide only and anyone who is in doubt as to his position should consult his professional adviserwithout delay.

Persons receiving a copy of this document should not distribute or send it into any jurisdiction where to do sowould or might contravene local securities laws or regulations.

16. Taxation16.1 UK taxationThe following information is based upon law and practice currently in force in the United Kingdom. Exceptwhen expressly stated, it applies to persons resident in the United Kingdom for tax purposes. Theinformation is of a general nature only, and is not a full description of all relevant tax considerations. In

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particular, it does not apply to persons who do not hold their New Ordinary Shares as investments and maynot apply to certain classes of shareholders, such as dealers in securities, insurance companies and collectiveinvestment schemes. Any person who is in any doubt as to his tax position should consult a professionaladviser concerning his tax position in respect of the acquisition, holding or disposal of NewOrdinary Shares.

(a) DividendsçUK resident shareholders

Under current United Kingdom taxation legislation no withholding tax applies on dividends paid bythe Company.

Where the Company pays a dividend, a holder of New Ordinary Shares who is an individual and whoreceives that dividend is generally entitled to a tax credit in respect of the dividend received. The taxcredit currently equals 10 per cent. of the combined amount of the dividend and tax credit (the ‘‘grossdividend’’), which together will be regarded as the top slice of the individual recipients’ income for taxpurposes and will be subject to UK income tax at the rates of the tax described below.

Individual shareholders who are liable to income tax at lower or basic rate will be liable to tax on thegross dividend received at the rate of 10 per cent. This means that the tax credit will fully satisfy theindividual’s liability to pay income tax at the lower or basic rate.

The rate of income tax applied to dividends received by individual shareholders liable to income tax atthe higher rate will be the Schedule F upper rate (currently 32.5 per cent. of the gross dividend). Aftertaking into account the 10 per cent. tax credit a higher rate tax payer will be liable to additional incometax of 22.5 per cent. of the gross dividend, equal to 25 per cent. of the net dividend.

A corporate shareholder will not be liable to UK corporation tax on any dividend received from theCompany.

Shareholders who are not liable to income tax on the dividend income cannot reclaim payment of thetax credit from the HMRevenue & Customs.

(b) Dividendsç nonUK resident shareholders

Shareholders not resident in the UK are generally not taxed in the UK on dividends received by them.By virtue of double taxation agreements between the UK and other countries, some overseasshareholders may be able to claim payment of all or part of the tax credits carried by the dividends theyreceive from UK companies. Such shareholders should note, however, that due to a change in law, thelevel of tax credit in most cases is now minimal. Persons who are not resident in the UK should consulttheir own tax advisers on the possible applicability of such provisions, the procedure for claimingrepayment and what relief or credit may be claimed in respect of such tax credit in the jurisdiction inwhich they are resident.

(c) Taxation of chargeable gains

Any disposal of New Ordinary Shares by a shareholder resident or ordinarily resident for tax purposesin the UK or a non-UK resident shareholder who carries on a trade, profession or vocation in the UKthrough a branch or agency and has used, held or acquired the New Ordinary Shares for the purposesof such trade, profession or vocation or such branch or agency may, depending on the shareholder’scircumstances, and subject to any available exemptions, allowances or reliefs, give rise to a chargeablegain or an allowable loss for the purposes of UK capital gains tax (or for companies, corporation taxon chargeable gains unless the gain is exempted by the Substantial Shareholding Exemptionlegislation). Special rules apply to disposals by individuals at a time when they are temporarily notresident or ordinarily resident in the UK.

Any chargeable gain (or allowable loss) will be calculated by reference to the consideration receivedfrom the disposal of the New Ordinary Shares less the allowable cost to the shareholder of acquiringthe New Ordinary Shares. For shareholders within the charge to UK corporation tax, an indexationallowance (calculated by reference to UK retail prices index) in respect of the acquisition cost of theNew Ordinary Shares should be available to reduce the amount of any chargeable gain realised on asubsequent disposal. A corporate shareholder owning at least 10 per cent. of Ordinary Shares in theCompany, may, subject to satisfaction of certain exemption conditions, qualify under the ‘‘Substantialshareholder exemption’’ for exemption from corporation tax in respect of any gains arising on adisposal of such shares. For individual shareholders, a relief known as ‘‘taper relief’’ may be availableto reduce the proportion of any chargeable gain subject to tax. It was recently announced by the

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Chancellor of Exchequer that taper relief will be abolished with e¡ect from 6 April 2008 and replacedwith a £at capital gains tax rate of 18 per cent.

(d) Stamp duty and stamp duty reserve tax

The conveyance or transfer or sale of New Ordinary Shares, which are held in certi¢cated formfollowing registration will be subject to stamp duty on the instrument of transfer, at the rate of 0.5 percent. (rounded up to the nearest multiple of »5) of the amount of the value of the consideration. Theagreement to transfer such shares or warrants will also give rise to a SDRT liability, again at the rate of0.5 per cent. of the amount of the value of the consideration. This liability is cancelled (and any SDRTpaid, refunded) if the agreement is completed by a duly stamped transfer within six years of theagreement becoming unconditional. Where New Ordinary Shares are held in uncerti¢cated form withinCREST a liability to SDRT will arise where a change in the legal and/or bene¢cial ownership of thoseOrdinary Shares occurs.

The above is a summary of certain aspects of current law and practice in the UK. Any person who is inany doubt as to his tax position or who is subject to tax in a jurisdiction other than the UK, shouldconsult his or her professional adviser.

17. Other information17.1 There is no agreement, arrangement or understanding between any of the Directors, recent directors,

shareholders or recent shareholders of KP Renewables having any connection with or dependenceupon the completion of the Proposals.

17.2 There is no agreement, arrangement or understanding whereby the bene¢cial ownership of the NewOrdinary Shares to be acquired by the Concert Party pursuant to the Proposals will be transferred toany other person.

17.3 The Company currently has no employees and the Acquisition will have no material e¡ect on thesubsidiaries of the Company, save for KPWind and Biomass Limited which will be disposed of.

17.4 The following table sets out the middle market quotations for the Existing Ordinary Shares as derivedfrom the Daily O⁄cial List for the ¢rst business day of each month from 1 June 2007 to 1 November2007 inclusive and for 26 November 2007 (the latest practicable date prior to the posting of thisdocument).

Date Price

1 June 1.6p2 July 1.6p1 August 1.38p3 September 1.1p1 October 1.23p1 November 1.6p

17.5 There is no intention that the payment of any interest on repayment of or security for any liability ofany members of the Concert Party (contingent or otherwise) will depend to any signi¢cant extent on thebusiness of the Company.

17.6 The total costs and expenses payable by the Company in connection with or incidental to the Proposalsincluding London Stock Exchange fees, printing and advertising and distribution costs, legal andaccounting fees and expenses are estimated to amount to approximately »800,000 (including anyirrecoverable VAT).

17.7 Save as disclosed in this document, no person (excluding professional advisers otherwise disclosed inthis document and trade suppliers) has:

(a) received directly or indirectly from the Company within twelve months preceding the Company’sapplication for Admission; or

(b) entered into contractual arrangements for (not otherwise disclosed in this document) to receive,directly or indirectly, from the Company on or after Admission any of the following:

(i) fees totalling »10,000 or more; or

(ii) securities in the Company with a value of »10,000 or more calculated by reference to theSuspension Price; or

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(iii) any other bene¢t with a value of »10,000 or more at the date of Admission.

17.8 Save for the Acquisition and as disclosed in this document, there has been no signi¢cant change in thetrading or ¢nancial position of the Company or IGL since the last published audited accounts of theCompany or IGL respectively.

17.9 Save for the Acquisition and as disclosed in this document, there has been no signi¢cant change in thetrading or ¢nancial position of IGL since 30 June 2005.

17.10Save as disclosed in this document, the Directors are not aware of any exceptional factors which havein£uenced the Company’s activities.

17.11The auditors of the Company for the period covered by the historical ¢nancial information containedin Part IV of this document are as follows:

(a) 31 December 2004çMoore Stephens LLP

(b) 31 December 2005çMoore Stephens LLP

(c) 31 December 2006çMoore Stephens LLP

All of the auditors listed above are members of the Institute of Chartered Accountants of England andWales.

17.12Save as disclosed in this document, there are no patents, licences, industrial, commercial or ¢nancialcontracts or new manufacturing processes which are material to the business or pro¢tability of theCompany.

17.13Save as disclosed in this document and in particular on pages 113 to 115 of Part V(a) of this document,there have been no related party transactions entered into by the Company prior to the date of thisdocument.

17.14The Company’s accounting reference date is 31 December.

17.15There has been no public takeover bid for the whole or any part of the share of the Company or anymember of the Enlarged Group prior to the date of this document. There are no mandatory takeoverbids and/or squeeze out and sell out rules in relation to the Ordinary Shares.

17.16Save as disclosed in this document there are no exceptional factors which have in£uenced the EnlargedGroup’s activities.

17.17There are no arrangements in place under which future dividends are to be waived or agreed to bewaived.

17.18The Company’s principal investments in progress and for each ¢nancial year for the period covered bythe historical ¢nancial information are as set out in Part I of this document and from Admissioncomprise its investment in IGL. Neither the Company nor any member of the Enlarged Group havemade any other ¢rm commitment in respect of any other investments.

17.19No ¢nancial information contained in this document is intended by the Company to represent orconstitute a forecast of pro¢ts by the Company nor to constitute publication of accounts by it.

17.20Save as set out in this document, the Enlarged Group has not sold any products or performed anyservices during the period covered by the historical ¢nancial information and there are therefore nosigni¢cant trends in production, sales and inventory costs and selling prices between the end of the last¢nancial year and the date of this document.

17.21Equipoise Solutions Limited has given and not withdrawn its written consent to the inclusion of itsreports in the form set out in Part III of this document and the references to such reports in the formand context in which they appear and accepts responsibility for such reports.

17.22Mazars LLP has given and not withdrawn its written consent to the inclusion of its reports and letter inthe form set out in Parts IV, V and VI of this document and the references to such reports and letter inthe form and context in which they appear and accepts responsibility for such reports.

17.23Libertas Capital Corporate Finance Limited has given and not withdrawn its written consent to theinclusion in this document of references to its name in the form and context in which it appears.

17.24Libertas Capital Securities Limited has given and not withdrawn its written consent to the inclusion inthis document of references to its name in the form and context in which it appears.

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17.25Nexen has given and not withdrawn its written consent to the inclusion in this document of referencesto its name in the form and context in which it appears.

17.26Where information in this document is indicated as having been sourced from a third party, suchinformation has been accurately reproduced and as far as the Company is aware from informationpublished by the relevant third parties (comprising pages 113 to 115), no facts have been omitted fromthis document which would render the information inaccurate or misleading.

18. Documents available for inspection18.1 Copies of the following documents will be available for inspection from the date of this document until

the date which is one month after Admission, at the o⁄ces of Morrison & Foerster MNP, 7th Floor,CityPoint, One Ropemaker Street, London EC2Y 9AW.

18.2 the memorandum and articles of association of the Company;

18.3 the published accounts of KP Renewables for the two year ended 31 December 2005 and 2006;

18.4 the Accountant’s Reports and Letter set out in Part IV, V and VI;

18.5 the letters of consent referred to in paragraph 17 above;

18.6 the report set out in Part III of this document;

18.7 the consultancy agreements and letters of appointment referred to in paragraph 10 above;

18.8 the material contracts of the Company and IGL set out in paragraphs 11 and 12 above;

18.9 the published accounts for Island Gas Limited for the two years ended 31 December 2005 and 2006;and

18.10 this document.

Dated: 27 November 2007

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PART VIII

NOTICE OF EXTRAORDINARY GENERAL MEETING

KPRenewables plc(Incorporated and registered in England andWales with RegisteredNo. 04981279)

NOTICE OF EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN that an extraordinary general meeting of KP Renewables plc (the‘‘Company’’) will be held at the o⁄ces of Morrison & Foerster, CityPoint, One Ropemaker Street, LondonEC2Y 9AW at 12.00 midday on 27 December 2007 for the purposes of considering and, if thought ¢t,passing the following resolutions which will be proposed in the case of resolutions (1), (2), (3), (4), (5), (6), (7),(9), (10) and (11) as ordinary resolutions and in the case of resolutions (8), (12), (13), (14) and (15) as a specialresolutions.

In accordance with the requirements of the Takeover Code, a poll will be taken on Resolution 2.

ORDINARY RESOLUTIONS

1. THAT:

(A) the proposed acquisition by the Company of the entire issued and to be issued share capital of IslandGas Limited (‘‘IGL’’) to be e¡ected pursuant to a scheme of arrangement (the ‘‘Scheme’’) underSection 425 of the Companies Act 1985 (the ‘‘Act’’) between IGL and the holders of the Scheme Shares(as de¢ned in the Scheme), details of which are contained in a document dated 13 November 2007 (the‘‘Scheme Document’’), a copy of which, initialled by the Chairman of the meeting for the purposes ofidenti¢cation, has been produced to the meeting or on such other terms (which are not materiallydi¡erent to the terms of the Scheme as set out in the Scheme Document but which may include anacquisition implemented by way of takeover o¡er pursuant to Sections 974 to 993 of the CompaniesAct 2006 and subject to such other conditions as may be approved by the directors of the Company (the‘‘Board’’) (or any duly authorised committee thereof) be and is hereby approved in accordance withRule 14 of the AIMRules for Companies published by the London Stock Exchange plc; and

(B) the directors (or any duly authorised committee thereof) be and are hereby authorised to bind theCompany to the Scheme in its original or in any modi¢ed or amended form if approved by them and totake all necessary or appropriate steps to complete or to procure the completion of such acquisition andgive e¡ect thereto with such modi¢cations, variations, revisions, waivers or amendments (not beingmodi¢cations, variations, revisions, waivers or amendments which are of a material nature) as theBoard or any duly authorised committee thereof may deem necessary, expedient or appropriate.

2. THAT the waiver granted by the Panel on Takeovers and Mergers of the obligations which wouldotherwise arise on the members of the Concert Party (as de¢ned in the circular to shareholders dated 27November 2007 of which this notice forms part (the ‘‘Circular’’)) to make a general o¡er to theshareholders of the Company pursuant to Rule 9 of the Takeovers Code as a result of the issue to themof New Ordinary Shares (as de¢ned in the Circular) in the Company as consideration for the sale bythem of any shares in IGL pursuant to the Scheme or upon the exercise by any of them of the Options(as de¢ned in the Circular) be and is hereby approved.

3. THAT the amendments to the Company Voluntary Arrangement pursuant to Part I of the InsolvencyAct 1986 made on 10 April 2007 in the form produced to theMeeting and initiated by the Chairman forthe purposes of identi¢cation be approved and that the sale of KPWind and Biomass Limited, a whollyowned subsidiary of the Company and the bene¢cial and legal owner of the Existing Projects (asde¢ned in the circular to shareholders dated 27 November 2007 of which this notice forms part) toBlenheim Energy Limited be approved on the terms of the contract now produced to the Meeting andinitialled by the Chairman for the purposes of identi¢cation.

4. THAT the terms and grant of the Warrants (as de¢ned in the circular to shareholders dated27 November of which this notice forms part) to Peter Redmond, Richard Armstrong, John Bryantand David Lindley be approved.

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5. THAT every 50 of the authorised Existing Ordinary Shares of 1p each be consolidated into 1 NewOrdinary Share of 50p and that any fractions arising from the inability to fully consolidate individualholdings of Existing Ordinary Shares be consolidated in aggregate and sold in the market for thebene¢t of the Company.

6. THAT the authorised share capital of the Company be increased from »6,000,000 to »45,000,000 bythe creation of an additional 78,000,000 New Ordinary Shares of 50p each.

7. THAT the Directors be and are hereby generally and unconditionally authorised, in substitution for allprevious authorities, pursuant to Section 80 of the Companies Act 1985 (the ‘‘Act’’) to exercise all thepowers of the Company to allot relevant securities (as de¢ned in section 80(2) of the Act) up to anaggregate nominal amount of »15,000,000 for a period expiring (unless previously renewed, varied orrevoked by the Company in general meeting) at the conclusion of the Company’s next Annual GeneralMeeting or 15 months after the date of the passing of this resolution, whichever ¢rst occurs, but theCompany may make an o¡er or agreement which would or might require relevant securities to beallotted after expiry of this authority and the Directors may allot relevant securities in pursuance ofthat o¡er or agreement as if the authority conferred hereby had not expired or been varied or revoked.

SPECIAL RESOLUTION

8. THAT the Directors are hereby empowered pursuant to section 95 of the 1985 Act to subject to andconditionally upon the passing of resolution No 7 allot equity securities (as de¢ned by section 94(2) ofthe 1985 Act) for cash pursuant to the authority conferred by resolution No 7 as if section 89(1) of the1985 Act did not apply to any such allotment; provided that such powers are limited to:

(a) the allotment of equity securities up to a maximum aggregate nominal amount su⁄cient topermit the issue of the Consideration Shares (as de¢ned in the Circular to shareholders dated27 November 2007 of which this notice forms part (the ‘‘Circular’’);

(b) the allotment of equity securities up to a maximum aggregate nominal amount to permit the issueof New Ordinary Shares (as de¢ned in the Circular) in connection with the exercise of Warrants(as de¢ned in the Circular);

(c) the allotment of equity securities pursuant to a rights issue, open o¡er, scrip dividend scheme orother pre-emptive o¡er or scheme in favour of holders of New Ordinary Shares (as de¢ned in theCircular) and any other persons who are entitled to participate in such issue, o¡er or schemewhere the equity securities o¡ered to each such holder and other person are proportionate (asnearly as may be) to the respective numbers of New Ordinary Shares held or deemed to be held bythem for the purposes of their inclusion in such issue, o¡er or scheme on the record dateapplicable thereto, but subject to such exclusions or other arrangements as the Directors maydeem ¢t or expedient to deal with fractional entitlements, legal or practical problems under thelaws of any overseas territory, the requirements of any regulatory body or stock exchange in anyterritory, shares being represented by depositary receipts, directions from any holders of shares orother persons to deal in some other manner with their respective entitlements or any other matterwhatever which the Directors consider to require such exclusions or other arrangements; and

(d) the allotment of equity securities for cash otherwise than pursuant to sub-paragraphs (a) and (b)up to an aggregate maximum nominal amount of »6,000,000;

and that subject to the case of an allotment of equity securities, to the convenience of the authorityconferred by paragraph (b) above the power conferred by this resolution shall expire ¢fteen monthsafter the passing of this resolution or at the conclusion of the next annual general meeting of thecompany following the passing of this resolution, whichever occurs ¢rst, but may be previouslyrevoked or varied from time to time by special resolution but so that the Company may before suchexpiry, revocation or variation make an o¡er or agreement which would or might require equitysecurities to be allotted after such expiry, revocation or variation and the Directors may allot equitysecurities in pursuance of such o¡er or agreement as if such power had not expired or been revoked orvaried.

ORDINARY RESOLUTIONS

9. THAT Francis Gugen, having consented to act, be appointed as a director of the Company to serve asexecutive chairman.

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10. THAT Andrew Austin, having consented to act, be appointed as a director of the Company to serve aschief executive o⁄cer.

11. THAT Brent Cheshire, having consented to act, be appointed as a executive technical director of theCompany.

SPECIAL RESOLUTIONS

12. THAT the name of the Company be changed to Island Gas Resources Plc.

13. THAT the regulations contained in the printed document produced to the meeting and signed for thepurpose of identi¢cation by the Chairman of the meeting be adopted as the new Articles of Associationof the Company in substitution for the existing Articles of Association.

14. THAT the Company be generally and unconditionally authorised in accordance with the Articles ofAssociation and generally to make o¡-market purchases (within the meaning of section 163(1) of theAct) of all issued Deferred Shares (as de¢ned in the Circular) pursuant to the terms of a draft contractproduced to the meeting and initialled by the Chairman for the purpose of identi¢cation (the‘‘Contract’’) the terms of which Contract are hereby approved for the purposes of Section 164 of theAct generally. The authority hereby conferred shall expire on the earlier of 18 months from the date ofthis Notice or the close of the next annual general meeting of the Company.

15. THAT the capital of the Company be reduced by applying the sum of »5,000,000 standing to the creditof the share premium account and any capital redemption reserve arising on the repurchase of theDeferred Shares in eliminating the debit balance standing on the Company’s accumulated pro¢t andloss account.

27 November 2007

Registered O⁄ce:7th Floor, Aldermary House10-15 Queen StreetLondonEC4N 1TX

By Order of the BoardAldermary Secretaries Limited

Company Secretary

Notes:(1) A Shareholder entitled to attend and vote at the meeting is also entitled to appoint one or more proxies to attend, speak and vote

instead of him or her. The proxy need not be a member of the Company. Where a Shareholder appoints more than one proxy, eachproxy must be appointed in respect of di¡erent shares comprised in his or her shareholding which must be identi¢ed on the proxyform. Each such proxy will have the right to vote on a poll in respect of the number of votes attaching to the number of shares inrespect of which the proxy has been appointed but such proxies will only be entitled to one vote between them on a show of hands.The proxy who is to exercise the one vote on a show of hands must be identi¢ed on the appropriate proxy form. Where more thanone joint Shareholder purports to appoint a proxy in respect of the same shares, only the appointment by the most seniorShareholder will be accepted as determined by the order in which their names appear in the Company’s register of members. If youwish your proxy to speak at the meeting, you should appoint a proxy other than the chairman of the meeting and give yourinstructions to that proxy.

(2) If you are not a Shareholder but you have been nominated by a Shareholder to enjoy information rights, you do not have the rightto appoint a proxy or proxies pursuant to Note (1). Please read Note (7) below.

(3) To be e¡ective an instrument appointing a proxy and any authority under which it is executed (or a notarially certi¢ed copy of suchauthority) must be deposited at the o⁄ces of Computershare Investor Services PLC, at PO Box 1075, The Pavillions, BridgewaterRoad, Bristol BS99 3FA, not later than 12.00 midday on 21 December 2007 except that, (a) should the meeting be adjourned, suchdeposit may be made not later than 48 hours before the time of the adjourned meeting and (b) in the case of a poll taken more than48 hours after it was demanded, such deposit may be made not later than 24 hours before the time appointed for the taking of thepoll. In calculating the said periods of 48 and 24 hours, there is to be excluded any part of a day which is a Saturday or Sunday,Christmas Day, Good Friday or a bank holiday in England. A Form of Proxy is enclosed with this notice. Shareholders who intendto appoint more than one proxy can obtain additional Forms of Proxy from Computershare Investor Services PLC by telephoningthem on 0870 7071106. Alternatively, the form provided may be photocopied prior to completion.

(4) An abstention (or ‘‘vote withheld’’) option has been included on the Form of Proxy. The legal e¡ect of choosing the abstentionoption on any resolution is that the shareholder concerned will be treated as not having voted on the relevant resolution. Thenumber of votes in respect of which there are abstentions will however be counted and recorded, but disregarded in calculating thenumber of votes for or against each resolution.

(5) In accordance with Regulation 41 of the Uncerti¢cated Securities Regulations 2001, the Company speci¢es that only thoseShareholders registered in the register of members of the Company as at 12.00 midday on 27 December 2007 or, in the event thatthe meeting is adjourned, in such register not later than 48 hours before the time of the adjourned meeting, shall be entitled toattend, or vote (whether in person or by proxy) at the meeting in respect of the number of shares registered in their names at therelevant time. Changes after the relevant time will be disregarded in determining the rights of any person to attend or vote at themeeting.

(6) CREST members who wish to appoint a proxy or proxies by using the CREST electronic proxy appointment service may do so byutilising the procedures described in the CREST Manual. The message, (a CREST proxy instruction) must be properly

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authenticated in accordance with the speci¢cations of Euroclear UK & Ireland Limited (‘‘EUI’’) and must contain the informationrequired for such instructions, as described in the CREST manual. The message, regardless of whether it relates to the appointmentof a proxy or to an amendment to the instruction given to a previously appointed proxy must, in order to be valid, be transmitted soas to be received by the Company’s agent not later than the time stated in Note (2) above. For this purpose, the time of receipt willbe taken to be the time (as determined by the time stamp applied to the message by the CREST Applications Host) from which theCompany’s agent is able to retrieve the message by enquiry to CREST in the manner prescribed by EUI.CREST members and, where applicable, their CREST sponsors or voting service providers should note that EUI does not makeavailable special procedures for any particular messages. Normal system timings and limitations will therefore apply in relation tothe input of CREST proxy instructions. It is the responsibility of the CRESTmember concerned to take (or, if the CRESTmemberis a CREST personal member or sponsored member or has appointed a voting service provider, to procure that his CREST sponsoror voting service provider takes) such action as shall be necessary to ensure that a message is transmitted by any particular time.Reference should be made to those sections of the CREST Manual concerning practical limitations of the CREST system andtimings.The Company may treat as invalid a CREST proxy instruction in the circumstances set out in Regulation 35(5)(a) of theUncerti¢cated Securities Regulations 2001.

(7) If you are a person who has been nominated under section 146 of the 2006 Act to enjoy information rights, you may have a right,under an agreement between you and the Shareholder who nominated you, to be appointed or to have someone else appointed foryou as a proxy for the meeting. If you do not have such a right, or you do have such a right but do not wish to exercise it, you mayhave a right under such an agreement to give instructions to the Shareholder who nominated you as to the exercise of the votingrights attached to the Ordinary Shares in respect of which you have been nominated.

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Sterling Greenaways. 94534

Acquisition and Admission to trading on AIM

Libertas CapitalNominated Adviser & Broker

KP RENEWABLES PLCto be renamed

ISLAND GAS RESOURCES PLC

PROJECT EARTH – LANDKOM INTERNATIONAL PATHFINDER PROOFDRAFT 12-OCTOBER-2007TOTAL SIZE: 512 x 383mmDOCUMENT SIZE: 436 x 303 mm10mm spine, 3mm bleed