D1 OILS MAKING GOOD PROGRESS

based revenues to fund the existing research and development programme.

D1 also sees a range of positive developments in the Jatropha market with major corporates entering at different points of the Jatropha value chain giving rise to greater opportunities for D1’s core skills. There have also been increases in crude oil and palm oil prices. Further new biofuel policy announcements in India, where the Company has a significant and well

funded Jatropha planting in North East India.

The Company has agreed terms to supply plant science, technology, products and services to a major European oil and gas company which has significant plans to develop Jatropha plantations in sub

Saharan Africa. Additionally, contracts have been exchanged for the sale of the Company’s Bromborough site for £2.6 million, in line with expectations, and at a £0.5million premium to book value. The Company has also successfully completed a feeding trial in relation to its technology for conversion of Jatropha seedcake into high protein content animal feed. As anticipated, at 31 December 2009, the Company had cash in the bank of £9.0 million. The Company continues to achieve cost reductions in line with the Independent Directors’ plans for the Company to be fully funded until late 2011.

Ben Good, Chief Executive, said: "We are making good progress within the business and, with positive developments in our markets, the Independent Directors believe the Company is well positioned to deliver value for shareholders".

Progress against each of the three main areas of the Company’s activities is as follows:

Operations

•Approximately 400 tonnes of Jatropha grain harvested across India, Africa and Indonesia in 2009

•A similar quantity anticipated in Q1 2010, as the harvest season extends into the new year in many areas

•These quantities are in line with Independent Directors’s expectations at the time of preparing the three

year oil targets contained within the 25 November announcement

•Oil production in 2009 was substantially all to inventory, but the Company is currently experiencing strong levels of interest in all its locations at selling prices for crude Jatropha oil in the range of $800

$1,000 per tonne.

•$0.8m contracts secured for government

funded Jatropha planting in North East India. These are the first of several anticipated of this kind, which should generate positive cash margins in the year of planting

Science & Technology

•Excellent progress in the animal feed programme. Successful conclusion of feeding trial with small mammals concluded by an independent laboratory, indicated no deleterious effects with feed ratios of up to 100% Jatropha Kernel Meal compared to the control soybean protein meal. This is a key milestone and the Company is now initiating further trials with poultry, and later in 2010 intends to go on to produce circa 10 tonne batches of animal feed

grade Jatropha Kernel Meal for trials with larger mammals.

•Selection of a third generation of high performing accessions, for use in the breeding programmes and in commercial planting, showing an uplift in yield potential of up to 40

60% based on actual Company cumulative yield data after 44 months from a planting trial. This trial is amongst the longest running and most scientifically documented in the industry. The trial tests 60 randomly collected accessions and confirms the views developed by the Company of achievable medium term yields for Jatropha.

•First indications of the potential for F1 hybrid development. The Company has identified male sterile Jatropha curcas lines which, combined with several pollinators, resulted in fertile F1 hybrid plants (a brief explanation of F1 hybrids is provided below). This is a key step towards development of true, commercial F1 hybrids for release to Jatropha farmers. In several crops where F1 hybrids have been released, farmers have benefited from significantly higher yields through a phenomenon called heterosis. In crops like maize or rapeseed, heterosis has resulted in historical yield gains of 300% and 80

100% respectively. The Company plans to test the first F1 hybrids in the field later this year.

Business development

•D1 Oils has agreed a detailed terms for the supply of plant science technology, products and services with a major European oil and gas company, which has significant plans to develop Jatropha plantations in sub

Saharan Africa.

•D1 will licence on a non

exclusive basis technology acquired through D1’s breeding programme in return for subscription payments from the client. The Company will also sell planting seeds; and the agreement further provides a framework for the sale of technology consulting services. In addition, there is a basis for collaborative breeding activities by the two companies to develop and evaluate improved cultivars of Jatropha curcas for the benefit of both companies, whilst retaining D1’s intellectual property position.

•In addition to this contract, D1 is continuing to develop revenue

generating relationships with a range of other third parties, some of which are at an advanced state of negotiation.

•In line with the Independent Directors’ expectation that initial agreements with third parties have significant potential for follow

on business, the Company is in discussions to expand the scope of

the contract, announced last year, with Bedford Biofuels in support of their extensive project plans for Jatropha operations in Kenya .