Following the announcement on 30 May 2006 relating to the granting of share options to Russell Harvey, the Chief Executive of Forum, the Board reports the implementation of the Long Term Incentive Plan ("LTIP") that was announced in the Notice of AGM dated 25 May 2006 with which to offer further incentives to Russell Harvey.

On 14 September 2006, the Company granted options to acquire ordinary shares of 10p each for nil consideration to the trustees of the Forum Energy plc Employee Benefit Trust (“EBT”) with an exercise price of 10p per share ('the A Options'). At the same time, options to acquire ordinary shares were granted for nil consideration by the trustees of the EBT to Russell Harvey with an exercise price of 10p per share ('the B Options'). The A and B Options are exercisable between 14 September 2006 and 15 May 2011.

The A and B Options are matched and are exercisable together in eight separate tranches, provided that certain performance criteria, applicable individually to each tranche, are met. These performance criteria relate to the share price performance or the achievement of market capitalisation targets and to the Company’s coal revenue targets for the combined years of 2006 and 2007 and for 2008,

The total number of A and B Options outstanding for each tranche are such number that will deliver the inherent value of the tranche as at the date of grant, and this will be determined by dividing the inherent value of each tranche by the higher of the market value of an ordinary share at the date of exercise and the average market value (measured over 2 days) of an ordinary share at the date that a tranche becomes exercisable. The options became exercisable on 14 September, subject to the performance criteria being met, and the inherent value at the date of grant was 69.5 pence per share.

The conditions and the inherent value for each tranche are set out below.

Tranche Performance Criteria and Inherent Value per Tranche

In addition, the Company announces that on 14 September 2006, a series of options to acquire ordinary shares of 10p each were granted for nil consideration to the trustees of the EBT with an exercise price of 10p per share ('the C Options'). The C Options are exercisable between 14 September 2006 and 15 May 2011. The C Options are exercisable in tranches provided the certain performance criteria referred to above applicable to each tranche, are met.

The total number of C Options outstanding for each tranche are such number that will deliver to the EBT the increase over the inherent value of the shares under the C Options from the date of grant, and this will be determined by reference to the formula (A-B) * (C/A) where:

A = the market value of the shares under option at the date of exercise
B = 69.5p
C = 200,000 (for Tranches 1-6) and 150,000 (for Tranches 7-8)

Further, in conjunction with the granting of the C Options, the trustees of the EBT awarded to Russell Harvey reversionary interests currently represented by the C Options under the company's LTIP. These interests will only vest if all the performance criteria referred to above are met.

The only participant under the LTIP is to be Russell Harvey, although the Board will consider other suitable instances where the LTIP can be used to incentivise other employees in the future. The terms of the LTIP are in place until 15 May 2011.

For further information please contact: