Notice of Results and Trading

RNS Number : 2165Z

Alkane Energy PLC

11 January 2011

 



Alkane Energy plc

("Alkane", "the Group" or "the Company")

Notice of Results and Trading Update

Alkane (AIM: ALK), the profitable alternative energy company, today announces an update on trading ahead of the results for the year ended 31 December 2010 which the Company will publish on 9 March 2011.

Trading for the year ended 31 December 2010 has been very encouraging, with output increasing by more than 25% compared to the same period last year. For the period, the Group expects to have delivered an estimated full year electricity output of circa 120GWh (2009: 95GWh). This increase reflects the contribution of the three new sites which became operational during the year, at Florence in Staffordshire, Newmarket in West Yorkshire and Kings Mill Hospital in Nottinghamshire. As at the year end, the Company had 12 operating sites (2009: 9). The average electricity sales price for 2010 is expected to be around £44/MWh (2009: £54/MWh).

The Board expects that the results for the year ended 31 December 2010 will be in line with market expectations. 

The on-going roll out programme is progressing well and Alkane remains confident of opening a further three coal mine methane sites during 2011. Electricity pricing has shown greater strength over recent months and as at 31 December 2010, approximately 65% of the Group's expected 2011 output is now contracted at an average price of £48/MWh.   

Alkane continues to work on a number of new biogas projects. We have secured a contract to supply the gas to power facilities to the TEG Group PLC anaerobic digestion plant at Glenfarg, Scotland in 2011.  During the year we have also worked on municipal food waste projects in collaboration with TEG, and we are working together on ongoing bids for three of the regions in the Welsh Assembly Government's food and green waste treatment programme. 

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

"We have continued to see strong, organic growth in our core coal mine methane business and we are encouraged by our progress in related markets such as biogas. Alkane remains well positioned to capitalise on a strengthening outlook for electricity prices and we continue to see opportunities for further growth."

For more information please contact:

Alkane Energy plc Neil O'Brien, Chief Executive Officer Steve Goalby, Finance Director	01623 827927 01623 827927
Altium Capital Limited Adrian Reed, Financial Advisory Chloe Ponsonby, Corporate Broking	0161 831 9133 020 7484 4040
Hudson Sandler Nick Lyon Kate Hough Alex Brennan	020 7796 4133
www.alkane.co.uk

Background Information

Alkane Energy has the UK's leading portfolio of coal mine methane ("CMM") licences, enabling the Company to extract gas from abandoned coal mines.  Alkane started extracting CMM in 1999 with sites at Shirebrook, Steetley and Markham.  Shirebrook and Markham are still operational today, a decade after they were opened.  Shirebrook is still producing CMM and surplus capacity has been deployed to conventional peak load along with capacity at Markham.  

The Group now generates power from 12 mid-sized (less than 10MW) power plants across the UK and sells this power through the electricity network, using standard modular reciprocating engines to generate the electricity.  The engine units and other plant are designed to be flexible and transportable and this allows additional capacity to be brought onto growing sites and underutilised plant to be moved to new sites to maximise efficiency. 

Alkane's skills and ambitions are not limited to CMM.  The operating model has already been transferred to running peak load plant using conventional gas.  Alkane currently operates 10MW across two sites on conventional gas with our trading partners GDF SUEZ Energy UK. 

The Biogas market also provides a potential new business stream which will require exactly the same power assets and core gas and electricity skills as CMM.

Coal Bed Methane is a longer term opportunity where Alkane has 500km² under licence and contingent resource estimates of circa 350 billion cubic feet. 

 

END

 

 

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