Trading Statement (2665E)
29 Maggio 2012 - 8:00AM
UK Regulatory
TIDMALK
RNS Number : 2665E
Alkane Energy PLC
29 May 2012
Alkane Energy plc
("Alkane" or the "Group")
AGM statement and Trading Update
29 May 2012
The Board of Alkane will make the following statement on current
trading at the Group's AGM to be held later today.
Corporate Activity
As part of the Group's strategy for growth, two significant
acquisitions have been made since the last AGM.
In May 2011, Alkane acquired Seven Star Natural Gas Limited,
which holds two onshore gas exploration licences in the Midlands.
Progress is ahead of our acquisition plan and we have started to
prepare a drill site at Nooks Farm, Staffordshire, where we will
re-enter a previously discovered gas reservoir.
In April 2012 we completed the acquisition of Greenpark Energy
Limited ("Greenpark"). This acquisition has brought with it seven
new Coal Mine Methane ("CMM") and Power Response sites. These sites
are currently being integrated within Alkane's operations. We
remain in the early days of this acquisition but the Board is
pleased with progress to date. The acquired CMM sites are
performing in line with our expectations and we now have more
projects to develop in the medium term. In respect of power
response, Greenpark has achieved significantly higher margins than
Alkane, and the potential at the combined sites is of particular
significance. Plans are being put in place to expand this side of
the business.
The Group also has significant exploration opportunities within
the combined licence portfolio. For instance, in February of this
year we announced a farm in deal with Aberdeen Drilling Management
to potentially exploit our non-core Coal Bed Methane licences.
Trading
Following the Greenpark acquisition we have re-appraised our own
project roll out and engine maintenance programme in pursuit of
greater operational efficiencies. We have completed the
refurbishment of our Shirebrook site and have commenced our
Greenpark integration plan by moving certain CMM engines to
optimise their use with additional focus being placed on the power
response activities.
Output from the original Alkane sites for the first four months
to 30 April 2012 reached 40GWh. As the Greenpark acquisition was
completed only on 26 April 2012 it has been excluded from the above
figures. The reduction from 48GWh in the same period last
yearresults from the early initiatives to prepare for the
integration of the Greenpark assets with the installation of new
plant and a planned number of engine moves. It is accordingly is in
line with expectations. Our power response business, providing
short term operating reserve and peak load capacity to the grid,
has been significantly boosted by the acquisition of Greenpark and
we now have 22MW of contracted capacity. This part of our business
has recently moved into the National Grid's spring contract period
and we are seeing encouraging demand with call levels currently
ahead of budget.
Alkane continues to invest in its organic CMM roll out programme
and this week we are due to open a new 3MW facility at Gedling,
Nottinghamshire. Our other planned new site for 2012 at
Pontycymmer, South Wales is in the build phase and is due to be
opened in the coming months.
Average electricity pricing across 2012 is expected to be circa
GBP53/MWh (2011: GBP51/MWh). Following on from the Greenpark
acquisition we have 80% of the Group's 2012 output already
contracted and 18% of 2013 output has been contracted at GBP52/MWh.
Prices remain relatively low due to global factors but remain in
line with our expansionary business plan. Market indications are
for significantly higher energy prices in the future.
Neil O'Brien, Chief Executive Officer, commented:
"I am delighted with the acquisition of Greenpark Energy. We are
now fully engaged on the delivery of new sites and enhancing the
facilities acquired. Power plants are being refurbished and moved
with the intention that all major installation work scheduled will
be completed ahead of the peak winter period. Progress to date is
encouraging and we remain in line with management
expectations."
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
Andy Clarke 0845 505 4343
VSA Capital Limited
Andrew Raca 020 3005 5000
Hudson Sandler
Nick Lyon
Alex Brennan 020 7796 4133
www.alkane.co.uk
About Alkane:
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 acquisition of Greenpark Energy
Limited ("Greenpark"), Alkane has a total of 70MW of installed
generating capacity and an electrical grid capacity of 92MW.
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. Alkane started extracting CMM for direct sales of gas in
1999 with sites at Shirebrook, Steetley and Markham.
As CMM declines at any one site Alkane retains valuable
generating capacity and a grid connection which we move 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 24MW on
conventional gas post the Greenpark acquisition.
The Group operates from 19 mid-size (up to 10MW) power plants
across the UK, 12 CMM, 4 conventional gas and 3 using both fuel
sources, 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.
The biogas market also provides a potential new business stream.
Running on gas generated from the processing of organic waste will
require exactly the same power assets and core gas and electricity
skills as CMM.
Coal bed methane ("CBM") is a longer term opportunity where
Alkane has 605km(2) under licence and contingent resource estimates
of circa 385 billion cubic feet. In February 2012 the Company
signed a partnership agreement with Aberdeen Drilling Management
Limited to explore two of our licences with CBM potential.
More information is available on our website
www.alkane.co.uk
This information is provided by RNS
The company news service from the London Stock Exchange
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