Interim Results

Asia Energy PLC
07 March 2005


                                7 March 2005

                          Asia Energy PLC (AIM: AEN)

            INTERIM REPORT FOR THE SIX MONTHS ENDED 31 DECEMBER 2004


Highlights


   •Significant progress towards developing Phulbari Coal Project


   •Test results confirm High Volatile Bituminous coal


   •Metallurgical and thermal coal products can also be produced


   •Four coal seams identified


   •Coal basin extends further north and south than expected


   •Initial Environmental Examination submitted on schedule


   •Transport logistics and water management studies progressing


   •Barclays Capital appointed as Financial Adviser


   •Significant commitment of expertise and resources to the Definitive
    Feasibility Study (DFS)


   •£2.4 million spent in period on drilling and the DFS


   •Cash in hand at end of period £10.4 million


For Further Information:

Asia Energy PLC                              Parkgreen Communications
Michael Frayne, Joint Managing Director      Justine Howarth / Cathy Malins
David Lenigas, Joint Managing Director       Tel: [phone]
Tel: [phone]                    [e-mail]

Gary Lye, Head of Operations
Bangladesh: [phone]

www.asia-energy.com

Evolution Securities                         JPMorgan Cazenove
Chris Sim                                    Michael Wentworth-Stanley
Tel: [phone]                        Tel: [phone]


Chairman's Statement


Asia Energy PLC ('the Company') made significant progress towards developing its
Phulbari Coal Project ('Project') in north-west Bangladesh in the six months to
31 December 2004. More than 200 staff, consultants, engineers and field workers
were engaged on the Project, as the Definitive Feasibility Study ('DFS') for the
15 million tonnes per year open cut coal mine moved into its most intensive
stage. Barclays Capital was appointed strategic financial advisor to the Company
and initiated negotiations on financing specific aspects of the Project with a
number of major international financial institutions.


DFS activities included resource definition drilling, geotechnical and
groundwater investigation, coal quality testing, mine planning, coal processing
studies, coal marketing, environmental and social impact assessments, coal
transport logistics and infrastructure.


The extensive programme of resource definition drilling commenced on 2 September
2004. The drilling programme has been enhanced by surface geophysics
(principally gravity), which has provided useful information on the coal basin
morphology and also indicated that the basin extends further northward and
southward than originally anticipated. Test results confirmed that the coal at
Phulbari varies between High Volatile A and High Volatile B Bituminous. The
tests also indicated that both metallurgical and thermal coal products can be
produced economically.


A total of four coal seams have now been identified in the Phulbari basin.
Exploration drilling had previously identified two seams. Highlights from the
drilling programme are tabulated below:

Bore    Top       Thickness   Top       Thickness   Thickness   Thickness  TOTAL
        Upper     Upper       Main      Main Seam   Lower       Lower      COAL
        Seam      Seam        Seam                  Seam1       Seam2
        (metres)  (metres)    (metres)  (metres)    (metres)    (metres) (metres)

AEN2     206.96        11.9    222.88        30.4      0.72      1.26    44.28
AEN8      271.6        13.7     290.1        26.4         -         -    40.10
AEN15     241.8        14.4     259.5        45.7       3.9         -    64.00
AEN17     271.9        16.1     301.5        38.4     10.96      4.33    69.79
AEN19     215.7        11.2     230.1        23.6       5.6       5.4    45.80
AEN26     177.0         9.6     204.2        22.4         -         -    32.00


Early indications are that the Run-of-Mine coal can be processed in a dense
medium plant into three products - a semi-soft coking coal, an export quality
thermal coal, and a high ash domestic product. A very high total recovery is
anticipated with the first product comprising 25% of output, and the second
around 50%. The domestic product, the balance of the output, appears suitable
for the local brickworks industry which consumes several million tonnes per year
of Indian coal. A large diameter coring programme is scheduled to provide
samples for process design and product testing.

Downhole geophysics utilising the services of the Bangladesh Atomic Energy
Commission has been a valuable tool in coal sampling. The Company has applied a
stringent coal handling protocol, refrigerating samples from the field right
through to delivery to the ACIRL Pty Ltd testing facility in Brisbane,
Australia.


The Environmental and Social Impact studies are being carried out by SMEC
International Pty Ltd ('SMEC') with the assistance of numerous consultants and
agencies from Bangladesh. A significant milestone for the project was the
delivery of the Initial Environmental Examination ('IEE') to the Government of
Bangladesh on 9 February 2005. The document is being evaluated by the Department
of Environment with the view to obtaining an environmental site clearance. This
will pave the way for the Environmental Impact Assessment ('EIA') to be lodged
by mid-year. The IEE was the culmination of more than six months' environmental
and socio-demographic studies, with up to 120 personnel involved.

Groundwater and surface water management are critical for the project, and a
combined team from SMEC and GHD Pty Ltd has been carrying out field testing and
modelling. The Company has appointed water management specialists from Coffey
Geoscientists Pty Ltd to assist in developing an overall water management plan.

Coal transport logistics studies are progressing. They are being guided by
marketing studies, with rail, port and road options for transporting coal to
both international and the local Bangladesh markets.


Results


During the six months to 31 December 2004, the Company made a loss before and
after tax of £300,307 (30 June 2004 : Loss of £396,065) . Exploration costs of
£2.4 million for the period have been capitalised (30 June 2004 : £2.1million).
They relate mainly to the drilling programme at Phulbari and the work on the
Definitive Feasibility Study.


In Summary


Great strides have been made during the period towards realising the Phulbari
Project. Drilling continues to confirm the resource base and the quality of the
product, in line with expectations of starting a substantial low cost coal
mining operation in the Phulbari coal basin. I would like to thank Asia Energy
staff, consultants and supporting engineers and field workers for their positive
contribution. This statement is being sent to all shareholders and will also be
available from the Company's registered office.


Christopher Eager

Chairman




Group Profit and Loss Account

                                                   6 months to    Period ended
                                                   31 December         30 June
                                                          2004            2004
                                           Note    (unaudited)
                                                             £               £

Administrative Expenses                               (561,482)       (497,171)

Operating loss                                        (561,482)       (497,171)

Net interest                                           261,175         101,106

Loss on ordinary activities before            2       (300,307)       (396,065)
taxation

Taxation on loss on ordinary activities                      -               -

Loss on ordinary activities after                     (300,307)       (396,065)
taxation

Loss for the financial period                         (300,307)       (396,065)

Basic and diluted loss per share (pence)                  (0.7)p          (2.2)p




GROUP STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES

                 
                                               6 months to        Period ended
                                               31 December             30 June
                                                      2004                2004
                                               (unaudited)
                 
                                                         £                   £
                 
Loss for the financial period                     (300,307)           (396,065)

Total recognised loss for the period              (300,307)           (396,065)



The comparative for 30 June 2004 includes the period from 26 September 2003 to
30 June 2004. The Company was incorporated on 26 September 2003.



Group Balance Sheet

                                                     31 December       30 June
                                                            2004          2004
                                             Note    (unaudited)
                                                               £             £

Fixed assets
Intangible assets                                      4,548,467     2,121,004
Tangible assets                                          379,221       154,475
                                                       4,927,688     2,275,479

Current assets
Stocks                                                         -        36,564
Debtors                                                  163,909       115,656
Cash at bank and in hand                        4     10,169,946    12,165,535
                                                      10,333,855    12,317,755


Creditors: amounts falling due within one               (637,976)     (170,359)
year

Net current assets                                     9,695,879    12,147,396

Total assets less current liabilities                 14,623,567    14,422,875

Capital and reserves
Called up share capital                                3,827,064     3,760,264
Share premium account                                 11,492,875    11,058,676
Profit and loss account                                 (696,372)     (396,065)

Shareholders' funds                             5     14,623,567    14,422,875




The Financial Statements were approved by the Board on 4 March 2005 and signed
on its behalf.





.....................                               .....................

Jonathan Malins                                    Michael Frayne



Group Cash Flow Statement

                                          Note     6 months to    Period ended
                                                   31 December         30 June
                                                          2004            2004
                                                   (unaudited)
                                                             £               £

Net cash outflow from operating               3       (575,363)       (619,820)
activities

Returns on investments and servicing of
finance
Interest received                                      288,823          55,579
Interest paid                                                -          (5,317)
Net cash inflow from returns on                        288,823          50,262
investments and servicing of finance

Taxation                                                     -               -

Capital expenditure and financial
investment
Purchase of tangible fixed assets                     (244,393)       (121,120)
Purchase of intangible fixed assets                 (1,950,655)       (466,155)
Net cash outflow from capital expenditure           (2,195,048)       (587,275)
and financial investments

Acquisitions and disposals
Net cash acquired with subsidiary                            -          33,014
undertaking

Net cash outflow from acquisitions                           -          33,014

Management of liquid resources
Short term deposits                                  2,000,000     (11,000,000)

Net cash outflow before financing                     (481,588)    (12,123,819)

Financing
Issue of shares                                        500,999      14,726,977
Share issue costs                                      (15,000)     (1,268,038)
Repayment of borrowings on acquisition                       -        (165,221)
Net cash inflow from financing                         485,999      13,293,718

Increase in cash                              4          4,411       1,169,899







The comparative for 30 June 2004 includes the period from 26 September 2003 to
30 June 2004. The Company was incorporated on 26 September 2003.




Notes to Interim Report


1 - Basis of Preparation of Financial Statements

The financial information contained herein does not constitute statutory
accounts within the meaning of Section 240 of the Companies Act 1985. The
unaudited interim financial information has been prepared on the basis of the
accounting policies set out in the Group's accounts for the year ended 30 June
2004. The figures for the year ended 30 June 2004 have been extracted from the
accounts. Those accounts have been filed with the Registrar of Companies and
contained an unqualified report. The Company's auditors, Ernst & Young LLP, have
reviewed the interim financial information for the six months ended 31 December
2004 and their report is set out below.


The comparative for 30 June 2004 includes the period from 26 September 2003 to
30 June 2004. The Company was incorporated on 26 September 2003.


The financial information for the 6 months ended 31 December 2004 is unaudited.
In the opinion of the directors the financial information for this period fairly
presents the financial position, results of operations and cash flows for this
period and conforms with generally accepted accounting principles.


2 - Segmental Analysis

There was no turnover during the financial period. The administrative expenses
relate to the United Kingdom, Australian and Bangladesh offices.


The Group operates in one principal area of activity being coal exploration and
development.


The Group operates within one geographical market, being Bangladesh, and is
supported by management and administrative functions in Australia and the United
Kingdom.

                        United Kingdom   Australia    Bangladesh         Total
                                    £            £             £             £

Six Months ended 31
December 2004
Operating loss                (62,275)    (238,032)            -      (300,307)
Net assets/                15,025,158     (403,871)        2,280    14,623,567
(liabilities)

Period ended 30 June
2004
Operating loss               (232,507)    (138,218)      (25,340)     (396,065)
Net assets/                14,586,433     (139,778)      (23,780)   14,422,875
(liabilities)



3 - Net Cash Outflow from Operating Activities

                                                 6 months to      Period ended
                                                 31 December           30 June
                                                        2004              2004
                                                 (unaudited)
                                                           £                 £

Operating loss                                      (561,482)         (497,171)
Depreciation and amortisation                         19,646                 -
Increase in debtors                                  (75,900)          (36,988)
Increase/(Decrease) in creditors                       5,809           (49,097)
Decrease/(Increase) in stocks                         36,564           (36,564)
Net cash outflow from operating activities          (575,363)         (619,820)



4 - Reconciliation of Net Cash Flow to Movement in Net Funds

                        
                                                   6 months to    Period ended
                                                   31 December         30 June
                                                          2004            2004
                                                   (unaudited)
                       
                                                             £               £
                        
Increase in cash in the period                           4,411       1,169,899
Cash (outflow)/inflow from financing - short        (2,000,000)     11,000,000
term                                                   
                                                    (1,995,589)     12,169,899
                        

Exchange differences                                         -          (4,364)
Net funds at beginning of period                    12,165,535               -
Net funds at end of period                          10,169,946      12,165,535



5 - Reconciliation of Movements in Shareholders' Funds

                                                 6 months to      Period ended
                                                 31 December           30 June
                                                        2004              2004
                                                 (unaudited)
                                                           £                 £

Loss for the period                                 (300,307)         (396,065)
New share capital subscribed                          66,800         3,760,264
Share premium (net of costs)                         434,199        11,058,676
Net increase in shareholders' funds                  200,692        14,422,875

Shareholders' funds at beginning of period        14,422,875                 -

Shareholders' funds at end of period              14,623,567        14,422,875



Independent Review Report


Introduction


We have been instructed by the company to review the financial information for
the six months ended 31 December 2004 which comprises Group Profit and Loss
Account, Group Balance Sheet, Group Cash Flow Statement, Group Statement of
Total Recognised Gains and Losses, Reconciliation of Movements in Shareholders'
Funds and the related notes 1 to 5. We have read the other information contained
in the interim report and considered whether it contains any apparent
misstatements or material inconsistencies with the financial information.


This report is made solely to the company having regard to guidance contained in
Bulletin 1999/4 'Review of interim financial information' issued by the Auditing
Practices Board. To the fullest extent permitted by the law, we do not accept or
assume responsibility to anyone other than the company, for our work, for this
report, or for the conclusions we have formed.


Directors' responsibilities


The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by, the directors. The directors
are responsible for preparing the interim report as required by the AIM Rules
issued by the London Stock Exchange.


Review work performed


We conducted our review having regard to the guidance contained in Bulletin 1999
/4 'Review of interim financial information' issued by the Auditing Practices
Board for use in the United Kingdom. A review consists principally of making
enquiries of management and applying analytical procedures to the financial
information and underlying financial data, and based thereon, assessing whether
the accounting policies and presentation have been consistently applied, unless
otherwise disclosed. A review excludes audit procedures such as tests of
controls and verification of assets, liabilities and transactions. It is
substantially less in scope than an audit performed in accordance with United
Kingdom Auditing Standards and therefore provides a lower level of assurance
than an audit. Accordingly we do not express an audit opinion on the financial
information.


Review conclusion


On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 31 December 2004.









Ernst & Young LLP
Registered Auditor
London
4 March 2005







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