Notice of Results and Trading Update

RNS Number : 8522I

Alkane Energy PLC

09 July 2013

 



9 July 2013

Alkane Energy plc

("Alkane" or "the Group")

Notice of Results and Trading Update

Notice of Results

Alkane Energy plc (AIM: ALK) the independent gas to power producer, today announces an update on trading ahead of the half year results for the six months ended 30 June 2013 (the "period"), which Alkane will publish on 11 September 2013.

Trading Update

Trading for the period ended 30 June 2013 has been encouraging, with output increasing 44% year on year and the Group expects to deliver half yearly electricity output of circa 94GWh (H1 2012: 65GWh). This increase reflects the full contribution of the acquisition of Greenpark Energy Limited which was completed on 26 April 2012, along with ongoing growth from Alkane's portfolio of sites and a first time contribution from the acquisition of the Maltby coal mine methane assets acquired on 24 May 2013.

The Maltby site is in its early changeover phase as mining operations are ceased at the colliery and we are delighted to report that we were able to achieve first production some five weeks ahead of the original plan.  We continue to appraise and gain planning and permits on a range of sites for 2014 and beyond. 

As at 30 June 2013, approximately 89% of the Group's expected 2013 baseload output is contracted at an average price of £53/MWh (2012: £52/MWh).  In addition, we have contracted 17% of the expected output for 2014 at £54/MWh.

The Board has noted recent announcements from DECC and Ofgem over a range of issues including the risk of power cuts as generating capacity shrinks over the coming years. We believe this positions the Company strongly to take advantage of business opportunities that will arise.

In addition on 27 June 2013 the British Geological Survey increased its estimates of UK shale resources.  Although at an early stage we continue to appraise the potential of our licences.

Commenting on the update, Chief Executive Officer, Neil O'Brien, said:

"Our investment strategy has continued to deliver strong growth in our core coal mine methane business and we are encouraged by progress in power response which has seen higher call levels from National Grid. Ofgem has recently again highlighted the risks facing the UK of an energy gap in the electricity market, which underpins our investment plans."

For more information please contact:

Alkane Energy plc Neil O'Brien, Chief Executive Officer Steve Goalby, Finance Director	01623 827927
Altium Capital Limited Adrian Reed Liam May	0845 505 4343
VSA Capital Limited Andrew Raca Liberum Capital Clayton Bush Tim Graham	020 3005 5004 020 3100 2000
Hudson Sandler Nick Lyon Alex Brennan	020 7796 4133

Background information

Alkane Energy is one of the UK's fastest growing independent power generators. The Company operates mid-sized "gas to power" electricity plants providing both predictable and fast response capacity to the grid. Following the completion of the acquisition of the Maltby CMM Asset, Alkane now has a total of 81MW of installed generating capacity and an electricity grid capacity of 100MW.

Alkane's main operations are based 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 or in order to balance the electricity grid. Alkane now operates 25MW of power response on mains gas.

The Group operates from 22 mid-size (up to 10MW) power plants across the UK, 15 CMM only, 5 mains gas only, and 2 using both fuel sources. Alkane use 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 & 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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