Alkane Energy PLC Notice of Results and Trading Update (5568L)
07 Luglio 2014 - 8:00AM
UK Regulatory
TIDMALK
RNS Number : 5568L
Alkane Energy PLC
07 July 2014
7 July 2014
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 2014 (the "period"),
which Alkane will publish on 10 September 2014.
Trading Update
On 10 June 2014 we announced the completion of the transfer of
our shale rights in certain licences to Egdon Resources plc. This
transaction gave the Group an 18% shareholding in the UK's third
largest shale operator and allowed Alkane to concentrate its
resources on our core electricity generation business. This
transaction will be reflected in the half year accounts and will
lead to a one off exceptional, after costs, pre tax profit of circa
GBP9m.
Trading for the period ended 30 June 2014 has seen electricity
output of circa 85GWh (H1 2013: 94GWh). The Maltby site was
off-line for the majority of the spring period as the planned
closure of the colliery was being completed. However we have now
returned to production at Maltby and the Group as a whole has
generated record weekly baseload output in recent weeks. The
Wheldale site we acquired in February 2014 has made its first time
contribution to our power response output and we would expect the
site to be fully commissioned during Q3 this year. These
improvements and the progress in increasing our power response
capacity over recent months means that we expect H2 production to
be substantially ahead of H1 2014.
As at 30 June 2014, approximately 74% of the Group's expected
2014 base load output is contracted at an average price of
GBP53/MWh (2013: GBP53/MWh). In addition, we have contracted 50% of
the expected output for 2015 at GBP54/MWh.
The project pipeline is progressing with drilling due to
commence in Q3 at Markham Main in South Yorkshire. We continue to
appraise and gain planning and permits on a range of sites for 2015
and beyond.
DECC and Ofgem have recently announced new initiatives to
address the tightening supply of electricity to the UK that is
forecast for the next few years. These capacity initiatives include
Demand Side Balancing Reserve starting from November 2014 in
advance of the full capacity mechanism due to be introduced in
2018. Alkane's embedded generation sites can bid into both capacity
programmes and we are in the process of determining our approach to
this additional income stream.
Commenting on the update, Chief Executive Officer, Neil O'Brien,
said:
"We note Ofgem's capacity appraisal for the UK electricity
market and we believe that our growing fleet of embedded power
plant is well placed to benefit from current market trends. We are
pleased to see progress in the overhaul of the power response fleet
and in the work we have been doing at Maltby and we have been
rewarded in recent weeks with record production for the Group. We
look forward to a strong second half of the year".
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 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 Group has circa 800km(2) of acreage under various onshore
Petroleum Exploration and Development Licences ("PEDLs").
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
END
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