Notice of Results and Trading Update

RNS Number : 1890S

Alkane Energy PLC

06 July 2015

 

6 July 2015

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 2015 (the "period"), which Alkane will publish on 9 September 2015.

Trading Update

Trading for the period ended 30 June 2015 has seen electricity output of circa 106GWh (H1 2014: 85GWh).  Core generation revenue is expected to be circa £8.5m (H1 2014: £5.9m).  These increases are a reflection of the full year impact of the Carron Energy sites bought in 2014 along with encouraging base load production from the portfolio of coal mine methane ("CMM") sites.  Power response activity in short term operating reserve ("STOR") has seen progressive improvement since the start of the year.

As at 30 June 2015, approximately 90% of the Group's expected 2015 base load output is contracted at an average price of £52/MWh (June 2014: £53/MWh). In addition, we have contracted 45% of the expected base load output for 2016 at £50/MWh.

We have commenced the build phase of our 28^th power plant, a base load CMM site at Markham Main in South Yorkshire, which is to start production in H2 2015.

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

"We are delighted with the 25% increase in output and greater than 40% increase in generation revenue, which is a reflection of successful delivery on the Alkane growth strategy.  Supply margins have tightened in the UK power market over recent years and the Board believes that Alkane's flexible and cost effective operating model leaves it well placed to benefit from this industry trend."

Notes to Editors

For more information please contact:

Alkane Energy plc Neil O'Brien, Chief Executive Officer Carl Kameen, Finance Director	01623 827927
Liberum Clayton Bush Josh Hughes	020 3200 2000
VSA Capital 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. Alkane has a total installed generating capacity of 145MW and an electricity grid capacity of 160MW.

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.

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 98MW of power response, one of the UK's largest power response businesses, with contracted STOR revenues extending out to 2025.

Alkane has been awarded 101MW of Capacity Mechanism Agreements starting from October 2018, with 55MW existing sites being secured on one year agreements and 46MW new sites on 15 year agreements over the period to September 2033. 

The Group operates from 27 mid-size (up to 25MW) power plants across the UK, 13 CMM only, seven mains gas only, six using both fuel sources and one using kerosene only. Alkane uses a combination of standard modular reciprocating engines and gas turbines 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.

In June 2014 Alkane transferred its shale gas interests to Egdon Resources plc.  In return it received 40 million Egdon shares making it the largest shareholder in Egdon, the UK's third largest shale operator.

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

 

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