PRESS RELEASE

For immediate release: 21 March, 2006

TXO (Berlin: UZI.BE - news) plc

IFRS Guidance

TXO plc, in preparing for the adoption of International Financial Reporting Standards (IFRS), today provides unaudited financial results prepared in accordance with IFRS for the years ended 31 March 2005 and 2004. These results have been reviewed by MRI Moores Rowland LLP, TXO's newly appointed auditors, and their report is attached.

The adoption of IFRS, has led to a number of adjustments to the group's historic financial statements which were presented under UK GAAP. The principal adjustment to the group's financial statements under IFRS is a change to the recognition of assets at fair value rather than cost. This adjustment alone has led to an increase in the recorded profit for the year ended 31 March 2005 of £10,221,222 and a corresponding increase in the Group's non current assets at 31 March 2005. For guidance, the adoption of IFRS, which the group will adopt fully for the year ended 31 March 2006, in aggregate, provides the following key differences to the 2005 and 2004 results:

· Results for the year to 31 March 2005 increase from a loss of £362,604 to a profit of £9,775,259, primarily due to the one off exceptional fair value adjustments

· Net (Frankfurt: A0Z22E - news) assets at 31 March 2005 increase from £6,261,445 to £19,803,681

· Net assets at 31 March 2004 increase from £3,045,693 to £6,246,439

A detailed reconciliation of the prime statements presented under UK GAAP and IFRS is provided.

For further information, please contact:

TXO plc

Andrew Glendinning, Finance Director 020 7863 8852

www.txoplc.com

Westhouse Securities LLC

Richard Baty 020 7601 6100

Aquila Financial

Peter Reilly 020 7202 2601

Yvonne Fraser 020 7202 2609

www.aquila-financial.com

Notes to editors

TXO plc is an oil and gas exploration and production company focusing on onshore wells in the Woodbine Field in East Texas, USA. It uses modern technology to re-open inactive wells, previously shut in due to low oil price, and bring them back into production.

TXO plc

Non Statutory Financial Statements,

Reporting Under IFRS

For the year ended

31 March 2005

INCOME STATEMENT

	Year ended 31 March 2005	Year ended 31 March 2004
	£	£
Revenue	613,459	359,438
Operating costs	(404,428)	(244,598)
Gross profit	209,031	114,840
Administrative expenses	(579,992)	(598,625)
Operating loss	(370,961)	(483,785)
Exceptional item: Excess of fair value of assets over cost of acquisition	10,221,222	-
	9,850,261	(483,785)
Finance costs	(75,002)	(46,372)
Profit / (Loss) on ordinary activities before taxation	9,775,259	(530,157)
Taxation on ordinary activities	-	-
Profit / (Loss) for the financial year	9,775,259	(530,157)
Earnings / (loss) per share (pence)	14.02	(1.10)
Fully diluted earnings / (loss) per share (pence)	12.26	(0.80)

All amounts derive wholly from continuing activities

STATEMENT OF CHANGES IN EQUITY

	Year ended 31 March 2005	Year ended 31 March 2004
	£	£
Exchange differences arising on translation of foreign operations	(243,529)	(375,322)
Net income recognised directly within equity	(243,529)	(375,322)
Profit/(loss) for the year	9,775,259	(530,157)
Total (Other OTC: TTFNF.PK - news) recognised income and expense for the year	9,531,730	(905,479)

BALANCE SHEET

	31 March 2005	31 March 2004
Non-current assets
Property, plant ∓ equipment	20,686,500	6,036,112
Current assets
Trade and other receivables	420,374	176,350
Cash and cash equivalents	698,133	319,819
	1,118,507	496,169
Current liabilities
Trade and other payables	(213,570)	(72,884)
Current portion of long term borrowings	(66,363)	(59,042)
Short term provisions	(71,933)	(39,116)
	(351,866)	(171,042)
Net current assets	766,641	325,127
Total assets less current liabilities	21,453,141	6,361,239
Non-current liabilities
Long term borrowings	(1,649,460)	(114,800)
Total net assets	19,803,681	6,246,439
Equity attributable to equity holders of the parent
Share capital	4,170,656	2,957,833
Share premium	4,483,679	2,022,712
Warrant reserve	669,275	317,553
Retained earnings	10,480,071	948,341
Total equity attributable to equity holders of the parent	19,803,681	6,246,439

Approved by the Board of Directors on 20 March 2006.

CASH FLOW STATEMENT

	31 March 2005	31 March 2004
	£	£
Cash flows from operating activities
Profit/(loss) before taxation	9,775,259	(530,157)
Adjustments for:
Exceptional item	(10,221,222)	-
Finance costs	75,002	46,372
Depreciation	33,117	11,015
Foreign exchange	(74,342)	7,518
Increase in trade and other receivables	(244,025)	(165,593)
Increase/(decrease) in trade payables	168,009	(190,019)
Expenses paid by issue of equity	104,919	360,803
Net cash from operating activities	(383,283)	(460,061)
Cash flows from investing activities
Purchase of property, plant ∓ equipment	(2,138,593)	(209,400)
Net cash used in investing activities	(2,138,593)	(209,400)
Cash flows from financing activities
Proceeds from issue of share capital	1,197,118	1,143,819
Proceeds/(repayments) of long term borrowing	1,772,579	(166,247)
Finance costs	(69,507)	(19,050)
Net cash used in financing activities	2,900,190	958,522
Increase in cash	378,314	289,061

RECONCILIATION FROM UK GAAP TO IFRS

IFRS 1 FIRST TIME ADOPTION

The consolidated financial statements of TXO plc and subsidiaries ("consolidated entity") for the year ended 31 March 2005 have been prepared in accordance with United Kingdom Generally Accepted Accounting Principles ("UK GAAP"), which differ in certain respects from International Financial Reporting Standards ("IFRS").

The Company has evaluated the financial impact of key differences in accounting policies that are expected to arise from adopting IFRS. Based on the current information, the adoption of IFRS should have no material effect, except as noted below.

The Directors have applied the exemptions provided in IFRS 1 First (OTC BB: FSTC.OB - news) -time Adoption of International Financial Reporting Standards, which permits the consolidated entity to grandfather all prior business combinations so that only minor restatements for prior consolidated entries are needed and permits the recognition of items of plant, property and equipment at deemed cost at the date of transition to IFRS.

An explanation of the key accounting policies and the differences from previous UK GAAP to IFRS and its effect on the consolidated entity's financial position and financial performance is set out in the following tables and notes to the accompanying income statement, statement of changes in equity, balance sheet and cash flow statement.

ACCOUNTING POLICIES

The accounts have been prepared in accordance with applicable International Accounting Standards and under the historical cost convention. The financial statements fall within the scope of the Statement of Recommended Practice, "Accounting for Oil and Gas Exploration, Development, Production and Decommissioning Activities", issued by the Oil Industry Accounting Committee ("SORP"). The financial statements, including disclosures, have been prepared in accordance with the provisions of the SORP currently in effect.

The following accounting policies, which are considered the more important, have been consistently applied:

Basis of Consolidation

The Group accounts consolidate the accounts of the parent company, TXO plc, and all its subsidiary undertakings drawn up to 31 March each year. The results of subsidiary undertakings acquired are included from the date of acquisition on an acquisition accounting basis. On acquisition all the subsidiary's assets and liabilities which existed at the date of acquisition are recorded at their fair values reflecting their condition at the time.

The Group accounts have been prepared using the going concern basis. In the opinion of the directors this is the appropriate basis to use given the board's consideration that the groups' future cashflow requirements can be met for at least one year from the date of approval of the accounts.

A separate profit and loss account setting out the results of the parent company is not presented as permitted by s230 Companies Act 1985.

Turnover

The company's development and production activities are conducted by M-C Production and Drilling Co. Inc. Turnover represents the company's share of sales of oil during the year, excluding sales tax and royalties. All income arises from the United States of America.

Negative goodwill

In accordance with IFRS 3 Business Combinations negative goodwill represents the excess of the fair value of the net assets acquired on acquisitions over the fair value of the consideration given. Negative goodwill arising on assets acquired in the year is reassessed and then recognised in the income statement. This represents a change in policy whereby under UK GAAP negative goodwill was previously capitalised and amortised in line with the assets to which it related. In accordance with the transitional provisions, previously recognised negative goodwill arising from business combinations has been derecognised and included in retained earnings.

The effect of the change in policy is detailed in the accompanying reconciliation of profits and equity and related notes.

Tangible fixed assets

Oil and gas lease costs comprise the cost or fair value of the oil and gas leases acquired by the group. Development costs comprise reworking and other costs.

Exploration and evaluation assets

Costs of acquiring rights to explore are capitalised within oil and gas leases and reviewed annually for impairment. Costs of exploration and evaluation are written off as incurred until such time as a discovery is made, after which costs will be treated as development expenditure.

This does not represent a change in accounting policy but IFRS 6 requires exploration assets to be disclosed as a separate class of asset. This will be disclosed in full in the notes to the accounts for the year ended 31 March 2006, however IFRS 6 has been applied in these statements from the year beginning 1 April 2003 and an extract of Tangible Fixed Assets disclosing the amounts applicable to exploration assets is as follows:

	Oil ∓ Gas Leases 31 March 2005	Oil ∓ Gas Leases 31 March 2004
Cost and net book value	£	£
At the beginning of the year	-	-
Additions	23,472	-
At the end of the year	23,472	-

Depreciation

The Group follows the full cost method of accounting for expenditure on oil and gas properties. Depreciation of oil and gas leases, development costs and fixtures, fittings and equipment is provided on a unit of production basis based on the reserves estimated to be recoverable from existing leases and including the estimated future costs to develop those reserves. Such depreciation is included as an operating cost in the profit and loss account. Depreciation of office fixtures and fittings is provided at 33.3% per annum on cost. The carrying values of tangible fixed assets are reviewed for impairment if events or changes in circumstances indicate the carrying value may not be recoverable.

Investment in Subsidiaries

Investments in subsidiaries are included as fixed asset investments at cost less any provision for impairment. The carrying value of investments in subsidiaries is revalued annually to reflect the underlying value of the net assets of the subsidiaries. The directors believe that this method is appropriate in the circumstances of the company. The loss arising in the year from this revaluation is considered to be temporary and therefore has been charged to a revaluation reserve.

Deferred tax

Deferred tax is provided for on a full provision basis on all timing differences, which have arisen but not reversed at the balance sheet date. No timing differences are recognised in respect of gains on sale of assets where those gains have been rolled over into replacement assets. Deferred tax assets are recognised to the extent that they are recoverable, that is, on the basis of all available evidence, it is more likely than not that there will be suitable taxable profits from which the future reversal of the underlying timing differences can be deducted. A deferred tax asset is not recognised on unrelieved tax losses as their recoverability is uncertain in the foreseeable future.

Operating leases

Rentals payable under operating leases are taken to the profit and loss account on a straight line basis over the period of the lease.

Foreign currencies

The functional currency of the group is US Dollars, being the local currency of the trading subsidiary. The presentational currency of the group is pounds sterling being the local currency of the parent company and the currency of the country in which the shares are listed. This is therefore considered to be an appropriate presentational currency of the group.

Assets and liabilities held in the functional currency are translated into the presentational currency at the rate of exchange ruling at the balance sheet date and profit and loss account items are translated at the average rate for the year. All resulting exchange differences are recognised as a separate component of equity. With the exception of reporting exchange differences as a separate component of equity this treatment represents no change in accounting policy and IAS 21 will be applied from 1 April 2005.

Share based payment

Equity settled share based payment transactions in which goods or services received are measured where possible at the fair value of the goods and services received. Where this value cannot be reliable estimated, for example in transactions with employees, measurement is taken at the fair value of equity instruments granted at grant date and a corresponding increase in equity applied. The transitional provisions of IFRS 2 have been followed and instruments granted after 7 November (Stuttgart: A0Z24E - news) 2002 and not yet vested have been recognised in these statements.

Compound Financial Instruments

The simultaneous issue of a debt instrument and warrants to purchase ordinary shares are regarded as compound instruments, consisting of a liability component and an equity component. At the date of issue, the fair value of the liability component is estimated using the prevailing market interest rate for similar non-convertible debt. The difference between the proceeds of issue of the warrants and the fair value assigned to the liability component, representing the embedded option for the holder to convert the warrants into equity of the Group, is included in equity (capital reserves).

Issue costs are apportioned between the liability and equity components of the convertible loan notes based on their relative carrying amounts at the date of issue. The portion relating to the equity component is charged directly to equity.

The interest expense on the liability component is calculated by applying the prevailing market interest rate for similar non-convertible debt to the liability component of the instrument. The difference between this amount and the interest paid is added to the carrying amount of the loan.

Non Statutory Financial Statements,

Reporting Under IFRS

for the Year Ended

31 March 2005

Reconciliation of profit for the year ended 31 March 2004

	Note ref	UK GAAP Balance	IFRS Adjustments	IFRS Balance
		£	£	£
Revenue		359,438	-	359,438
Operating costs	1	(241,957)	(2,641)	(244,598)
Gross Profit		117,481	(2,641)	114,840
Administrative expenses	2	(281,072)	(317,553)	(598,625)
Operating loss		(163,591)	(320,194)	(483,785)
Finance costs		(46,372)	-	(46,372)
Loss on ordinary activities before taxation		(209,963)	(320,194)	(530,157)
Taxation		-	-	-
(Loss)/profit for the financial year		(209,963)	(320,194)	(530,157)

Reconciliation of profit for the year ended 31 March 2005

	Note ref	UK GAAP Balance	IFRS Adjustments	IFRS Balance
		£	£	£
Revenue		613,459	-	613,459
Operating costs	1	(398,407)	(6,021)	(404,428)
Gross Profit		215,052	(6,021)	209,031
Administrative expenses	2	(502,654)	(77,338)	(579,992)
Operating loss		(287,602)	(83,359)	(370,961)
	1	-	10,221,222	10,221,222
		(287,602)	10,137,863	9,850,261
Finance costs		(75,002)	-	(75,002)
Loss on ordinary activities before taxation		(362,604)	10,137,863	9,775,259
Taxation		-	-	-
(Loss)/profit for the financial year		(362,604)	10,137,863	9,775,259

Reconciliation of equity at 31 March 2004

	Note ref	UK GAAP Balance	IFRS Adjustments	IFRS Balance
Non current assets		£	£	£
Goodwill	1	(3,200,746)	3,200,746	-
Property, plant ∓ equipment		6,036,112	-	6,036,112
		2,835,366	3,200,746	6,036,112
Current assets
Trade and other receivables		176,350	-	176,350
Cash and cash equivalents		319,819	-	319,819
		496,169	-	496,169
Current liabilities
Trade and other payables		(72,884)	-	(72,884)
Current portion of long term borrowing		(59,042)	-	(59,042)
Short term provisions		(39,116)	-	(39,116)
		(171,042)	-	(171,042)
Net current assets		325,127	-	325,127
Total assets less current liabilities		3,160,493	3,200,746	6,361,239
Non current liabilities
Long term borrowings		(114,800)	-	(114,800)
Total net assets		3,045,693	3,200,746	6,246,439
Equity attributable to equity holders of the parent
Share capital		2,957,833	-	2,957,833
Share premium		2,022,712	-	2,022,712
Warrants proceeds reserve	2	-	317,553	317,553
Retained earnings	1	(1,934,852)	2,883,193	948,341
Total equity attributable to equity holders of the parent		3,045,693	3,200,746	6,246,439

Reconciliation of equity at 31 March 2005

	Note ref	UK GAAP Balance	IFRS Adjustments	IFRS Balance
Non current assets		£	£	£
Goodwill	1	(13,324,012)	13,324,012	-
Property, plant ∓ equipment		20,686,500	-	20,686,500
		7,362,488	13,324,012	20,686,500
Current assets
Trade and other receivables		420,374	-	420,374
Cash and cash equivalents		698,133	-	698,133
		1,118,507	-	1,118,507
Current liabilities
Trade and other payables		(213,570)	-	(213,570)
Current portion of long term borrowing		(66,363)	-	(66,363)
Short term provisions		(71,933)	-	(71,933)
		(351,866)	-	(351,866)
Net current assets		766,641	-	766,641
Total assets less current liabilities	1	8,129,129	13,324,012	21,453,141
Non current liabilities
Long term borrowings	3	(1,867,684)	218,224	(1,649,460)
Total net assets		6,261,445	13,542,236	19,803,861
Equity attributable to equity holders of the parent
Share capital		4,170,656	-	4,170,656
Share premium		4,483,679	-	4,483,679
Warrant reserve	2,3	56,160	613,115	669,275
Retained earnings		(2,449,050)	12,929,121	10,480,071
Total equity attributable to equity holders of the parent		6,261,445	13,542,236	19,803,681

Notes to the reconciliation of UK GAAP to IFRS

The following notes detail the differences between the financial statements presented under IFRS and financial statements presented under the previous UK GAAP:

1. Goodwill and impairment

Under UK GAAP negative goodwill is carried on the balance sheet and amortised in line with the asset to which it relates. Under IFRS 3, Business Combinations, negative goodwill existing at the transitional date will be derecognised at that date, with a corresponding increase to retained earnings. Goodwill acquired since the transitional date is reassessed and recognised immediately in the profit and loss. Any amortisation charge previously recognised in the financial year has been reversed.

Goodwill deemed to be impaired will be required to be written down in accordance with IAS 36. The Group is currently undertaking and impairment review of its assets and any resulting impairment adjustment is anticipated to be recognised in the year ended 31 March 2006.

2. Share based payment

IFRS 2 Share based payments, requires all such payments including share warrants which were granted after 7 November 2002 to be shown as an expense in the Income Statement or Balance Sheet as applicable. Share warrants granted to employees are measured at fair value at grant date. Share warrants granted to third parties as consideration for goods or services received are measured at the fair value of those good or services at the date of receipt.

		2005		2004
	Warrants	Weighted Average Exercise Price (in pence)	Warrants	Weighted Average Exercise Price (in pence)
Outstanding at beginning of period	7,550,000	18.71	15,916,000	9.18
Granted during the period	29,196,000	20.24	3,250,000	17
Forfeited during the period	0	0	0	0
Exercised during the period	0	0	11,420,000	5.15
Expired during the period	0	0	196,000	6.53
Outstanding at the end of the period	36,746,000	19.93	7,550,000	18.71
Exercisable at the end of the period	36,746,000	19.93	7,550,000	18.71

The options outstanding at 31 March 2005 had a weighted average exercise price of 19.93, and a weighted average remaining contractual life of 3.16 years.

The inputs into the Black-Scholes model were as follows:

	2005	2004
Weighted average share price	17	20.50
Weighted average exercise price	19.93	18.71
Expected volatility	40%	59%
Risk free rate	4%	4%
Expected dividends	None	None

Expected volatility was determined by calculating the historical volatility of the Group's share price using the Bloomberg 100 day volatility curve. The expected life used in the model has been adjusted, based on management's best estimate, for the effects of non-transferability, exercise restrictions, and behavioural considerations.

3. Financial Instruments

IFRS 7, Financial Instruments: Disclosure, requires the separate presentation on the balance sheet of liability and equity elements created by the simultaneous issue of a debt instrument and warrants to purchase ordinary shares. The bond and related warrants issued in March 2005 has been represented in accordance with IFRS 7, IAS 32 and the attached accounting policies.

Nominal value of loan issued	£1,596,594
Equity component	£(218,224)
Liability component at 31 March 2005	£1,378,370

4. Leases

Under IAS 17, Leases, operating leases of land and buildings must be split into their constituent parts, with the land element and the building element assessed separately. The Group is currently reviewing its portfolio of operating leases to determine whether the current operating lease treatment remains appropriate under IAS 17. No adjustment is currently included.

Non-Statutory Report to the Directors of TXO plc

The International Financial Reporting Standards ("IFRS") information including income statement, balance sheet, change in equity and cash flow statement has been prepared by the company as part of its transition to IFRS. The procedures undertaken are highlighted below.

Basis of Opinion

We have performed the procedures agreed with you and enumerated below with respect to the conversion of the UKGAAP financial statements of TXO plc ("the Company" or "the Group") as at 31 March 2005 to the prepared ancillary results applying International Financial Reporting Standards ("IFRS"). These IFRS statements should be read in conjunction with the statutory accounts prepared under UK GAAP as at 31 March 2005.

The procedures were performed solely to assist you in confirming the accounting results under IFRS as part of the Group's transition to reporting under IFRS and are summarised as follows:

a) We were provided with the adjustments to convert the UK GAAP financial statements to those prepared in accordance with IFRS and we have checked the arithmetic accuracy of the adjustments;

b) We have reviewed all material conversion adjustments to confirm the correct treatment;

c) We have reviewed the attached financial statements as a whole to confirm that further material disclosures required under IFRS have been included over those disclosed in the statutory UK GAAP financial statements as at 31 March 2005.

We do not express an audit opinion on either the UK or the IFRS financial information. This report, including the conclusion, has been prepared for and only for the Company for the purposes of assisting with their transition to IFRS and for no other purpose. We do not, in producing this report, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

Responsibility

The IFRS financial statements, which have been prepared under the historic cost convention, have not been prepared for statutory purposes. They have been prepared, as part of the Group's strategy to transition to statutory reporting under IFRS for the year ended 31 March 2006. Because the above procedures do not constitute an audit or a review, we do not express any assurance on the IFRS or UKGAAP financial statements. Had we performed additional procedures or had we performed an audit of the financial statements other matters might have come to our attention that would have been reported to you.

Emphasis of matter

Without modifying our review conclusion, we draw your attention to the fact that the basis of preparation and accounting policies used to draw up the IFRS interim financial information may require adjustment before the Group issues its first complete set of IFRS financial statements for the year ended 31 March 2006.

This is because further interpretations may be issued by the International Financial Reporting Interpretations Committee, and further Standards may be issued by the International Accounting Standards Board. In addition, there is not yet a significant body of established practice on which to draw in forming opinions regarding interpretation and application. Accordingly, practice is continuing to evolve.

At this preliminary stage, therefore, the full financial effect of reporting under IFRS as it will be applied in the Group's first complete set of IFRS financial statements for the year ended 31 March 2006 may be subject to change.

Opinion

Our findings were as follows:

1. With respect to (a) we found the arithmetic accuracy to be correct;

2. With respect to (b) we confirm that the conversion adjustments are in accordance with applicable accounting standards;

3. With respect to (c) we confirm that the further material disclosures are in accordance with applicable accounting standards with the exception of compliance with IAS17, leases, as the Group is currently undertaking a review to determine if any adjustment is required.

MRI Moores Rowland LLP

Chartered Accountants

20 March 2006