Interim Results

Kern River PLC
21 May 2001


KERN RIVER PLC

INTERIM RESULTS OF FOR THE SIX MONTHS ENDED 31 MARCH 2001


CHAIRMAN'S STATEMENT

Today we have announced the acquisition of Impax Capital Corporation Limited,
a corporate finance and investment advisory business specialising in the
Environmental Infrastructure Technology sector. The acquisition, which
requires shareholder approval, is described in full in a prospectus, which is
being sent to shareholders. The prospectus also contains details of a Placing
and Open Offer to raise £1.43 million net of expenses to fund the development
of the enlarged group. To reflect the importance of the new activities to the
group it is intended to change the name of the Company to Impax Group plc.

The acquisition of Impax represents a new and exciting phase in the Company's
development. We believe that it provides a base for the creation of
substantial growth in shareholder value.

Positive progress has been made in our oil business in the past few months. In
January this year we started the implementation of the development programme
at the Starks Field, which had a small impact on production in the short time
before the end of this reporting period. The board has authorised expenditure
on a pilot project to exploit a natural gas discovery made during the drilling
programme and we will report on that in due course. By the end of March 2001
we were achieving average production at the rate of 237 barrels of oil a day
at the field and this level has improved during April 2001.

In the six months ended 31March 2001 the Group achieved gross production of
29,000 barrels nearly all of which arose on the Starks Field. Production at
the Nukern Lease remained at a minimal level. Turnover was £418,000 (2000: 
£334,000) and profit on ordinary activities before tax was £132,000 (2000: 
£100,000).

Production at Starks Field realised an average price of $28.44 per barrel for
the period. We expect that oil prices will continue to fluctuate but believe
that the prospects for average oil prices provide clear support for the
continuation of our development programme at the Starks Field.

We recently commissioned a new independent petroleum engineers' report on the
Nukern Field. The preliminary findings confirm our previous reports of the
substantial reserves in California and we will report further on it in due
course.

In February 2001 the Court approved the reduction of share premium account
which facilitates the payment of dividends in the future.

The overall profile for the Company is now encouraging and I look forward to
reporting further progress in due course.

Stuart Bickerstaff
Chairman
21 May 2001



Consolidated Profit and Loss Account for the 6 months ended 31 March 2001


                                                 6 months   6 months
                                                    ended      ended Year ended
                                                 31 March   31 March    30 Sept
                                                     2001       2000       2000
                                               (unaudited) (unaudited) (audited)
                                        Note 1      £'000      £'000      £'000

Turnover                                              418        334        686
Cost of sales                                       (309)      (221)      (535)

Gross profit                                          109        113        151
Administrative expenses                              (69)       (43)      (126)
Exchange gain                                          85         41        116

Operating profit                                      125        111        141
Interest receivable                                    26          1          7
Interest payable                                      (5)       (12)       (30)

Profit on ordinary activities before                  146        100        118
taxation
Taxation                                             (14)        (3)        (2)

Profit attributable to the Group                      132         97        116

Basic earnings per share                Note 3      0.64p      0.84p      1.01p

Diluted earnings per share              Note 3      0.64p      0.84p      1.01p

All disclosures relate only to continuing operations

Statement of Total Recognised Gains and Losses

                                                 6 months     6 months    Year
                                                    ended        ended   ended
                                                 31 March     31 March  30 Sept
                                                     2001         2000     2000
                                              (unaudited)  (unaudited)(audited)
                                                    £'000        £'000    £'000

Profit for the period                                 132           97      116
Currency translation differences                      195          168      451

Total recognised gains                                327          265      567


Consolidated Balance Sheet as at 31 March 2001
                                                   31 March   31 March  30 Sept
                                                       2001       2000     2000
                                                 (unaudited)(unaudited)(audited)
                                                      £'000      £'000    £'000
Fixed assets
Tangible assets                                       8,114      6,686    7,351

Current assets
Debtors                                                 232        121      124
Cash at bank and in hand                              1,058         68      240

                                                      1,290        189      364

Creditors -- Amounts falling due within               (325)       (67)    (248)
one year

Net current assets/(liabilities)                        965        122      116

Total assets less current liabilities                 9,079      6,808    7,467

Creditors -- Amounts falling due after                (740)    (1,834)  (2,191)
more than one year

Net assets                                            8,339      4,974    5,276

Capital and reserves
Called up share capital                               5,750      2,875    2,875
Share premium                                             1        381      381
Merger reserve                                        2,198      2,198    2,198
Exchange equalisation reserve                           430       (52)      226
Profit and loss account                                (40)      (428)    (404)

Equity shareholders' funds                            8,339      4,974    5,276


Consolidated Cash Flow Statement for the 6 months ended 31 March 2001


                                                   6 months   6 months
                                                      ended      ended     Year
                                                                          ended
                                                   31 March   31 March  30 Sept
                                                       2001       2000     2000
                                                 (unaudited)(unaudited)(audited)
                                                             (revised)
                                         Note 1       £'000      £'000    £'000

Cash flow from operating activities                      67       (26)      158

Returns on investments and servicing of
finance
Interest received                                        26          -        -
Interest paid                                           (5)          1        7
Expenses of share issue                               (139)          -        -

Capital expenditure and financial
investment
Purchase of tangible fixed assets                     (500)      (101)    (365)
Tax paid                                               (14)        (3)      (2)

Net cash outflow before financing                     (565)      (129)    (202)

Financing
Ordinary shares issued                                2,875          -        -
(Decrease)/Increase in loans                        (1,451)        100      360

Increase/(Decrease) in cash in the period               859       (29)      158

Reconciliation of net cash flow to
movement in net cash
Increase/(Decrease) in cash in the period               859       (29)      158
Cash (outflow)/inflow from change in debt             2,191      (100)    (360)
Translation differences                                (42)       (64)    (187)

Movement in net debt in the period                    3,008      (193)    (389)
Net debt at beginning of the period                 (1,950)    (1,561)  (1,561)

Net cash/(debt) at end of period                      1,058    (1,754)  (1,950)

Reconciliation of operating profit to cash
flow from operations
Operating profit                                        125        111      141
Depreciation and depletion charges                       58         56      111
Exchange gain                                          (85)       (36)    (116)
(Increase)/ decrease in debtors                       (108)       (59)     (61)
(Decrease)/increase in creditors                         77       (98)       83

Net cash flow from operations                            67       (26)      158


Notes to the Interim Accounts for the 6 months ended 31 March 2001

1.      The financial information set out in this report does not constitute    
        full accounts for the purposes of Section240 of the Companies Act 1985. 
        The interim accounts for the six months ended 31 March 2001 and 31 March
        2000 are unaudited. The comparative figures for the financial year ended
        30 September 2000 are not the Company's statutory accounts for the      
        financial year but are abridged from those accounts which have been     
        reported on by the Company's auditors, whose report was unqualified. The
        interim accounts have been prepared on the basis of the accounting      
        policies set out in the annual financial statements of the Group for the
        year ended 30 September 2000. The interim accounts were approved by the 
        Directors on 21 May 2001.

2.      Amounts denominated in US Dollars have been converted at the closing    
        rate on 31 March 2000 of £1 to $1.42 (31 March 2000 -- $1.58; 30        
        September 2000 -- $1.48). The results of the US subsidiary undertaking  
        have been translated at the average rate ruling in the accounting period
        of £1 to $1.45 (31 March 2000 -- $1.62; 30 September 2000 -- $1.55).

3.      The figures for diluted and basic earnings per share are based on the   
        profit attributable to the Group of £131,558 (31 March 2000 -- £96,952; 
        30 September 2000 -- £115,834) and on the weighted average number of    
        ordinary shares in issue during the period of 20,532,967 (31 March 2000 
        and 30 September 2000 -- 11,500,000). No dividend is proposed.

This interim statement is contained in the prospectus dated 21 May 2001 which
is being sent to shareholders. Copies of the interim statement are available
free of charge from the registered office of the Company, Cooper Street,
Wolverhampton WV2 2JL.