News 02 November 2007

Subsidiary's results for the year ended 30 June 2007

Spitfire Oil Limited’s (“Spitfire Oil” or the “Company”) wholly owned Australian subsidiary, Spitfire Oil Pty Ltd (“Spitfire Australia”), has published its accounts for the year ended 30 June 2007, a summary of which is attached.

Following its financial year end, Spitfire Australia was acquired by Spitfire Oil on 11th July 2007. Spitfire Oil’s ordinary shares were admitted to trading on AIM on the 18th July 2007 at which time 16,666,667 new ordinary shares were placed to raise £10 million.

SPITFIRE OIL PTY LIMITED
Income Statement For the year ended 30 June 2007
(expressed in Australian dollars)

2007 2006
$ $
Revenue 9,227 8,298
Corporate expenses 809,847 616,397
Other expenses 184,445 36,765
Mining & Exploration (R&D) 571,126 888,964
Promotion & Investor Relations 17,354 -
Loss before income tax (1,573,545) (1,533,828)
Income tax expense - -
Loss for the year (1,573,545) (1,533,828)

Spitfire Oil pty Limited
Balance Sheet As at 30 June 2007
(expressed in Australian dollars)

2007 2006
$ $
ASSETS
Current assets
Cash and cash equivalents 30,999 332,834
Trade and other receivables 17,485 42,859
Other 417 83,575
Total current assets 48,901 459,268
Non-Current assets
Exploration and evaluation expenditure 294,320 10,000
Property, plant and equipment 2,170 -
Total non current assets 296,490 10,000
TOTAL ASSETS 345,391 469,268
LIABILITIES
Current liabilities
Trade and other payables 1,165,054 795,073
Borrowings 290,000 -
Total current liabilities 1,455,054 795,073
Total liabilities 1,455,054 795,073
NET ASSETS (LIABILITIES) (1,109,663) (325,805)
EQUITY
Issued capital 2,024,974 1,235,287
Accumulated losses (3,134,637) (1,561,092)
TOTAL EQUITY (1,109,663) (325,805)

Spitfire Oil Pty Limited
Statement of Changes in Equity For the year ended 30 June 2007
(expressed in Australian dollars)

Share Accumulated
Capital Losses Total
$ $ $
Balance at 1 July 2005 12 (27,264) (27,252)
Shares issued net of costs 1,235,275 - 1,235,275
Net (loss) for the period - (1,533,828) (1,533,828)
Balance at 30 June 2006 1,235,287 (1,561,092) (325,805)
Shares issued net of costs 789,687 - 789,687
Net (loss) for the period - (1,573,545) (1,573,545)
Balance at 30 June 2007 2,024,974 (3,134,637) (1,109,663)

Spitfire Oil Pty Limited
Cash Flow Statement For the year ended 30 June 2007
(expressed in Australian dollars)

2007 2006
$ $
Cash flows related to operating activities
Receipts from customers - -
Payments to suppliers and employees (1,053,429) (889,334)
Interest received 9,227 8,298
Net cash inflow used in operating activities (1,044,202) (881,036)
Cash flows related to investing activities
Payments for purchases of plant and equipment (3,000) -
Other, exploration costs capitalised (284,320) -
Net cash flows used in investing activities (287,320) -
Cash flows relating to financing activities
Proceeds from issues of securities 750,000 1,321,375
Capital raising costs (10,313) (86,100)
Proceeds from borrowings 290,000 (21,600)
Net cash flows from financing activities 1,029,687 1,213,675
Net increase (decrease) in cash and cash equivalents (301,835) 332,639
Cash and cash equivalents at the beginning of the year 332,834 195
Cash and cash equivalents at the end of the year 30,999 332,834

Notes:

This statement has been prepared using accounting policies and presentation consistent with those applied in the preparation of the statutory accounts of the Company.

The summary accounts set out above do not include all the notes of the type normally included in an annual financial report and therefore do not constitute statutory accounts. The summarised balance sheet at 30 June 2007 and the summarised income statement, statement of changes in equity and the summarised cash flow statement for the year then ended have been extracted from Spitfire Oil Pty Limited’s statutory financial statements for the 30 June 2007 upon which the auditors’ opinion is unqualified. The results for the year ended 30 June 2006 have been extracted from the statutory accounts for that period, which contain an unqualified auditors’ report.