AGM Statement and Trading Update

RNS Number : 9807F

Alkane Energy PLC

01 May 2014

 



1 May 2014

Alkane Energy plc

("Alkane" or the "Group")

AGM Statement and Trading Update

The Board of Alkane Energy plc, the independent gas to power producer, will make the following statement on current trading at the Group's Annual General Meeting to be held at 11.00am today.

Output in the first three months of 2014 has reached 48GWh in comparison to 51GWh in the same period in 2013. Our portfolio of base load coal mine methane ("CMM") sites is producing in line with budget, with the Maltby power plant due to go back into production during May 2014 following the planned decommissioning of the mine in Q1 2014.

Our power response sites are connected to mains gas and produce electricity at times of high electrical demand. We participate in the National Grid's short term operating reserve programme ('STOR') to help meet temporary supply shortages, and activity for the first quarter of the year has been encouraging. Our expansion plans are progressing well with contracted STOR capacity increasing from 21MW at the start of 2014 to 36MW for the coming winter period.

Market selling prices for base load output have remained stable and the Group now has 76% of expected 2014 output contracted at £53MWh and 47% of expected 2015 output contracted at £54MWh. Whilst we have placed only 7% of contracts for 2016, current market prices would be in excess of £55MWh.

Neil O'Brien, Chief Executive Officer, commented:

"Alkane's strategy remains to increase our generating capacity at a time when the UK is facing a much tighter energy market.

Regarding our base load CMM operations, we are planning to drill at Markham Main, Yorkshire during the summer and have a series of other projects progressing through planning and permitting.  On the power response side of our operations, Alkane is on track to deliver on our stated aim to reach an installed capacity of 50MW by Spring 2015 which includes our newest site at Wheldale, Yorkshire, acquired from SSE plc earlier this year"

Notes to Editors

For more information please contact:

Alkane Energy plc Neil O'Brien, Chief Executive Officer Steve Goalby, Finance Director	01623 827927
Liberum Clayton Bush Tim Graham	020 3200 2000
VSA Capital Group Limited Andrew Raca	020 3005 5000
Hudson Sandler Nick Lyon Alex Brennan	020 7796 4133

Background information

Alkane is one of the UK's fastest growing independent power generators. The Company operates mid-sized "gas to power" electricity plants providing both base load and fast response capacity to the grid. Following the acquisition of the Wheldale power response assets, Alkane now has a total of 90MW of installed generating capacity and an electricity grid capacity of 110MW.

Alkane's base load operations, where power is generated 24/7, are centred on a portfolio of coal mine methane ("CMM") sites. Alkane has the UK's leading portfolio of CMM licences, enabling the Company to extract gas from abandoned coal mines.

As CMM declines at any one site, Alkane retains valuable generating capacity and a grid connection which can be redeployed to power response. Power response sites are connected to mains gas and produce electricity at times of high electrical demand through peak running, or in order to balance the electricity grid through participation in the National Grid's short term operating reserve programme ("STOR"). Participants in STOR are paid premium rates when called upon by the Grid to meet temporary supply shortages.  Alkane now operates 43MW of power response on mains gas.

The Group operates from 24 mid-size (up to 10MW) power plants across the UK, 15 CMM only, 6 mains gas only, and 3 using both fuel sources. Alkane uses standard modular reciprocating engines to generate the electricity and sells this power through the electricity network. The engine units and other plant are designed to be flexible and transportable allowing additional capacity to be brought onto growing sites and underutilised plant to be moved to new sites to maximise efficiency.

Alkane has a range of core skills encompassing the entire project development cycle including planning and permitting, sourcing plant and managing the build and commissioning stage. This has enabled Alkane to establish a design, build and operate ("DBO") business for third party clients in the biogas and oil & gas industries.

The Group has more than 800km² of acreage under various onshore Petroleum Exploration and Development Licences ("PEDLs"). Alkane retains a 100% interest in the majority of these PEDLs, which extend to all of the hydrocarbons recoverable from these licence areas. This includes any CMM, natural gas, coal bed methane ("CBM") or shale gas.

More information is available on our website www.alkane.co.uk 

 

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