Trading Update and Notice of Results

RNS Number : 9962X

Alkane Energy PLC

20 January 2014

 



20 January 2014

Alkane Energy plc

("Alkane" or "the Group")

Trading Update and Notice of Results

Notice of Results

Alkane Energy plc ("Alkane" "the Group" or "the Company") (AIM: ALK) the independent gas to power producer, today announces an update on trading ahead of the results for the year ended 31 December 2013 (the "period"), which Alkane will publish on 12 March 2014.

Trading Update

Trading for the year ended 31 December 2013 has remained strong with output increasing 15% year on year. For the period, the Group expects to deliver electricity of circa 192 GWh (2012: 167 GWh).  This increase reflects the contribution of the 11MW coal mine methane ("CMM") facility at Maltby Colliery acquired in May 2013 which is performing ahead of plan. Alkane opened its 23rd site at the former Prince of Wales Colliery, Pontefract in December and this 2MW facility is an example of our organic roll out of new capacity from our existing licence acreage.

Electricity pricing has remained stable over recent months with an expected average base load price of circa £53/MWh in the year to 31 December 2013 (2012: £52/MWh). As at 31 December 2013, approximately 59% of the Group's expected 2014 output is contracted at an average price of £53/MWh.

Our Power Response operations, which are connected to mains gas, run peak winter load and offer Short Term Operating Reserve ("STOR") facilities to the National Grid.  The overall STOR market is growing and in response to this we are adding to our engine capacity in this sector.  Alkane has continued to improve its service performance which together with growth in the market has meant that we have seen Power Response revenue more than doubling compared with 2012.

The Board expects that the results for the year ended 31 December 2013 will be in line with market expectations.

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

"Alkane continues to invest in new facilities as the UK Electricity market faces an increased risk of an energy gap over the coming years.  2013 has seen the successful integration of the Maltby acquisition and improved performance from our Power Response sites.  It has been our 10^th successive year of output growth and we remain confident of future prospects."

For more information please contact:

Alkane Energy plc Neil O'Brien, Chief Executive Officer Steve Goalby, Finance Director	01623 827927
Liberum Capital Limited Clayton Bush Tim Graham	020 3100 2000
VSA Capital Limited Andrew Raca	020 3005 5004
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 83MW of installed generating capacity and an electricity grid capacity of 102MW.

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 23 mid-size (up to 10MW) power plants across the UK, 16 CMM only, 5 mains gas only, and 2 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 & 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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