News 01 April 2008

Interim Results

Spitfire Oil Limited (“Spitfire” or the “Company”) is pleased to publish its interim results for the six months ended 31 December 2007.

Highlights

Review of Operations

Your directors present their report on the consolidated entity consisting of Spitfire Oil Limited and the entities it controlled at the end of, or during, the half-year ended 31 December 2007.

The following persons were directors of Spitfire Oil Limited during the whole of the half year and up to the date of this report:

Mr. Mladen Ninkov Non-Executive Chairman
Mr. Andrew Woskett Chief Executive Officer (CEO)
Mr. Malcolm Randall Non-Executive Director
Mr. Rupert Crowe Non-Executive Director
Mr. Roger Goodwin Non-Executive Director

Spitfire Oil Limited was admitted to the Alternative Investment market (AIM) on 18 July 2007 under the market code SRO. The initial public offer for Spitfire Oil raised £10 million (before costs of the issue) thereby enabling the subsidiary company Spitfire Oil Pty Ltd. (SOPL) to commit to and to satisfy significant expenditure in a number of operational areas.

Resource Definition and Sampling

The first exploration drilling investigation of the lignite deposit since 2002 was completed in December 2007. A series of 4 PQ sized diamond core samples were taken from the full lignite seam section, including a 21m thick seam intersection. The samples were subjected to a range of laboratory tests for coal chemical analysis and quality assessment.

The first geophysical programme conducted on the tenements was completed late in 2007. This comprised both airborne EM data manipulation using the SkyTem™ system and downhole geophysical interrogation of cased drill holes through the full section of the lignite seam. 1000 line kilometres of aerial EM data were collected and all 2007 drill holes were wireline logged for the full suite of EM tools (such as resistivity and gamma readings). Data acquisition, integration, and compilation was performed by external consultants, resulting in a fully validated database of electromagnetic highs/lows and output of high resolution imagery depicting subsurface sedimentary contours.

An aerial survey was flown in December 2007 using the LIDAR system. A remote digital terrain model (DTM) was completed, covering an area of 105 square kilometers and providing accurate elevation datapoints and orthoimagery, for refinement of the mining model.

Technology Development

A contract with Curtin University of Technology in Perth, Western Australia, for the supply of Research and Development Services was activated. Curtin University’s Centre for Fuels and Energy (CFE) will investigate and optimise Spitfire Oil’s Lignite-to-Value conceptualised process for conversion of lignite into fuel oil products. The ultimate design approach for lignite conversion is called L2V.

Lignite-to-Value represents a low temperature catalytic pyrolysis method suited to the particular chemical characteristics of the Salmon Gums lignite, in particular its variable compositions of sulphur, ash, moisture and salt.

Receipt of core samples enabled CFE to start work on its first and second contractual deliverables and CFE’s report into the first, lignite characterisation, was submitted. This provided valuable new understanding of the chemistry of the lignite and clarified the design approach for the pryloysis reactor, a laboratory scale vessel in which L2V conversions can be simulated and refined. The first stage of the pyrolysis reactor, with a design throughput of 15kg per hour batch basis, was built and cold commissioned.

Environmental Assessment

Project Referral documents were lodged with the Western Australian Environmental Protection Authority (EPA) and the Australian Department of Environment. The EPA determined that the required level of environmental assessment applicable to this project is the Environmental Review and Management Plan. The environmental assessment process was initiated.

This report is made in accordance with a resolution of Directors.

Mr. Andrew Woskett,
Chief Executive Officer & Director
Spitfire Oil Limited
Dated: 31st Day of March 2008.

Chairman's Statement

"This report contains the inaugural results for Spitfire Oil Limited, following its successful admission to AIM. Spitfire Oil has made a strong start towards development of its coal to liquids technology and application of that to its 100% owned lignite deposit in Western Australia."

Mr. Mladen Ninkov
Chairman
Spitfire Oil Limited (AIM : SRO)
Dated: 31st Day of March 2008.

CONSOLIDATED INCOME STATEMENT
FOR THE HALF YEAR ENDED 31 DECEMBER 2007

Consolidated Entity
31 December 2007 31 December 2006
$ $
Revenue
Non-Operational Revenue 740,059 -
Expenses
Mining & Exploration (R&D) (438,849) -
Promotion & investor relations 16,563 -
Impairment of Goodwill (1,120,096) -
Corporate Expenses 116,113 -
Other Expenses (608,931) -
PROFIT/(LOSS) BEFORE INCOME TAX (1,295,142) -
INCOME TAX EXPENSE - -
PROFIT/(LOSS) FOR THE PERIOD (1,295,142) -
Cents Cents
Loss per share for loss from attributable to the ordinary equity holders of the company:
Basic loss per share (3.04) -
Diluted loss per share (3.04) -

The accompanying notes form part of these financial statements.

CONSOLIDATED BALANCE SHEET
FOR THE HALF YEAR ENDED 31 DECEMBER 2007

Consolidated Entity
31 December 2007 30 June 2007
$ $
Assets
Current Assets -
Cash and cash equivalents 18,709,664 -
Trade and other receivables 76,963 -
Other 56,135 -
Total Current Assets 18,842,761 -
Non-Current Assets
Other Financial assets 10,000 -
Property, plant and equipments 8,412 -
Exploration and evaluation expenditure 883,346 -
Total Non-Current Assets 901,758 -
TOTAL ASSETS 19,744,520 -
LIABILITIES
Current Liabilities
Trade and other payables 207,900 -
Total Current Liabilities 207,900 `-
TOTAL LIABILITIES 207,900 -
NET ASSETS 19,536,620 -
EQUITY
Issued capital 20,570,009 -
Reserves 261,753 -
Accumulated Losses (1,295,142) -
TOTAL EQUITY 19,536,620

The accompanying notes form part of these financial statements.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
AS AT 31 DECEMBER 2007

Consolidated Entity
Issued Capital Reserves Accumulated Losses Total
$ $ $ $
Shares issued net of costs 20,570,009 - - 20,570,009
Translation of Foreign currency - 261,753 - 261,753
Net (Loss) for the period -
- (1,295,142) (1,295,142)
Balance at 31 December 2007 20,570,009 261,753 (1,295,142) 19,536,620

The accompanying notes form part of these financial statements.

CONSOLIDATED CASH FLOW STATEMENT
FOR THE HALF YEAR ENDED 31 DECEMBER 2007

Consolidated Entity
31 December 2007 31 December 2006
$ $
CASH FLOWS RELATED TO OPERATING ACTIVITIES
Payments to suppliers and employees (3,980,202) -
Interest received 457,600 -
Income Tax Returns 277,788 -
NET OPERATING CASH FLOWS (3,244,814) -
CASH FLOWS RELATED TO INVESTING ACTIVITIES
Payment for purchases of plant and equipment (8,913) -
Asset revaluation under IFRS & transition period (893,346) -
NET INVESTING CASH FLOWS (902,259) -
CASH FLOWS RELATED TO FINANCING ACTIVITIES
Proceeds from issues of securities 22,939,791 -
Capital raising costs (344,807) -
NET FINANCING CASH FLOWS 22,594,984 -
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 18,447,911 -
Cash and cash equivalents at the beginning of the half year - -
Effects of exchange rate changes on cash and cash equivalents 261,753 -
CASH AND CASH EQUIVALENTS AT THE END OF THE HALF YEAR 18,709,664 -

The accompanying notes form part of these financial statements.

NOTES TO THE FINANCIAL STATEMENTS

Note 1 – Basis of Preparation

The general purpose financial report for the interim half year reporting period ended 31 December 2007 has been prepared in accordance with the requirements of International Accounting Standard IAS34: Interim Financial Reporting.

This half year financial report does not include all notes of the type normally included in an annual financial report and therefore cannot be expected to provide as full an understanding of the financial performance, financial position and financing and investing activities of the entity as the full financial report.

The accounting policies adopted are consistent with the Admission Document Financial Reports at the time of Spitfire Oil Limited’s admission to AIM. No comparatives have been presented in this financial report as the parent entity, Spitfire Oil Limited, a Bermuda company, was established on 2 July 2007. Spitfire Oil Limited listed on AIM on 18 July 2007.

This half-year report has been prepared on an accruals basis and is based on historical costs modified by the revaluation of selected non-current assets, financial assets and financial liabilities for which the fair value basis of accounting has been applied.

All amounts stated in this interim financial report are represented in Australian Dollars (AUD) unless otherwise stated.

Note 2 - Dividends

The Company did not declare any dividends in the half year ended 31 December 2007. Spitfire Oil Limited (AIM: SRO)

Note 3 – Contingent Liabilities and Assets

There has been no change in contingent liabilities and assets since the last annual reporting date.

Note 4 – Issued Capital

31 December 2007 30 June 2007
No $ No $
Issued and Paid up Capital
Fully Paid Ordinary Shares 43,350,000 20,570,009 - -
Options over Fully Paid Ordinary Shares 3,500,000 - - -
Total Issued Capital 20,570,009 -

Note 5 – Events Subsequent to Reporting Date

No matters or circumstances have arisen since the end of the reporting period, not otherwise disclosed in this report, which significantly affected or may significantly affect the operations of the economic entity, the result of those operations or the state of affairs of the economic entity in subsequent financial years.

DIRECTORS DECLARATION

The Directors declare that are set out herein:

1. The financial statements and notes:

a. comply with International Accounting Standard IAS34: Interim Financial Reporting; and

b. give a true and fair view of the economic entity’s financial position as at 31 December 2007 and of its performance for the half year ended on that date.

2. In the Directors’ opinion there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.

This declaration is made in accordance with a resolution of the Directors.

Mr. Roger Goodwin
Director
Spitfire Oil Limited