United Energy PLC - Acquisition of Interest

RNS No 6183w
UNITED ENERGY PLC
24th October 1997

United Energy plc, the oil and gas company, announces that it has increased
its interest in Agrigen Ltd to 70% with options over the remaining 30% of the
issued share capital.

Agrigen Ltd holds a government backed NFFO3 contract to supply 8.825 megawatts
of electricity from a poultry litter fired power station to be located at Nunn
Mills, Northampton. The electricity is to be supplied at an April 1997
contracted price of 5.53p per kilowatt hour increased by RPI; this price is
substantially higher than current pool prices paid by the RECs.  The supply
contract is for 15 years from 1 December 1998.  The target date for plant
commissioning is June 30 1999.

United Energy is acquiring a 20% shareholding in Agrigen from  Mr R E Collins
and a further 20% from Mr T R Willison for a total cash consideration of
#225,000, with payments conditional on the Nunn Mills Biomass Power Station
project achieving financial close which is projected to occur during the first
quarter of 1998.

In addition, United Energy has acquired an option to purchase the remaining
30% of the issued share capital in Agrigen Ltd  from Mr T R Willison.  This
option provides United Energy with the opportunity to purchase a further 15%
of the shares on or before plant commissioning, with the option over the
remaining 15% of the shares being exercised on or before the second
anniversary of plant commissioning.  The option cost #1 and the exercise price
is #150,000 in respect of each 15% interest acquired.

Currently, the costs relating to the Agrigen project are being capitalised and
have no effect on the profit & loss.  On the basis of consolidation adopted by
United Energy, the net liabilities of Agrigen amounted to #15,000 at 31
December, 1996.  In due course, the significant increase in interest in
Agrigen will enable United Energy to achieve the maximum benefit from the
profitability of the Nunn Mills Biomass Power Station bearing in mind that the
financing of this project is expected to require dilution of United Energy's
interest.  

Contact:        Nick Tamblyn, Chief Executive - 01242 253773
       Derek Howard-Orchard, Group Technical Director - 01242 253773

END



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