Approval of transfer of onshore shale gas business

RNS Number : 3042J

Alkane Energy PLC

10 June 2014

 



10 June 2014

Alkane Energy plc

("Alkane" or the "Company")

Completion of transfer of onshore shale gas business

Alkane Energy plc (AIM: ALK), is pleased to note the announcement made today by Egdon Resources Plc ("Egdon") in which Egdon stated that it has received approval from DECC in relation to its acquisition of Alkane's onshore shale gas interests (the "Acquisition").

Accordingly, subject only to the admission of the ordinary shares of Egdon issued in connection with the transaction which is expected to occur on 12 June 2014, all conditions relating to completion of the Acquisition have been satisfied and Alkane will be issued 40,000,000 ordinary shares of Egdon as consideration for the Acquisition.

Neil O'Brien, CEO of Alkane Energy commented:

"As a result of this transaction Alkane has become a significant shareholder of one of the largest UK onshore oil and gas companies and has material exposure to over 140,000 acres of prospective shale gas acreage.

The Acquisition has provided immediate value to Alkane, whilst allowing the Company to share in the upside should any of Egdon's licences prove to contain exploitable oil and gas reserves."

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 Joshua Hughes	020 3100 2000
VSA Capital Limited Andrew Raca	020 3005 5004
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 licences which are the subject of the transaction with Egdon include PEDL001, PEDL011, PEDL037, PEDL039, PEDL043, PEDL169 (net 20 per cent), PEDL191, PEDL161-162, PEDL202 and EXL253.

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

 

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