Thursday, September 12, 2013

News: Maltby exceeds expectations for Alkane

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Alkane Energy has stated that the acquisition of the coal mine methane (CMM) assets at Maltby Colliery in Rotherham, and the associated fundraising, has exceeded expectations.

The Nottinghamshire company operates mid-sized "gas to power" electricity plants providing both predictable and fast response capacity to the grid. It raised £6m in equity funding to complete a £7.5m deal to buy CMM assets at Maltby earlier this year.

Now the UK's largest generator of electricity from CMM, Alkane posted results for the six months ended 30 June 2013 that showed that revenues more than doubled compared with the same period last year from £5.3m to £11.1m. EBITDA (earnings before tax) rose to £3.3m from £2.1m in the same period in 2012 and group adjusted profit before tax increased to £1.4m from £1.0m.

Underground operations ended in March at the Maltby site that occupies 500 acres and employed over 500 staff and contractors. It is the last coking coal mine left in the UK and produced both high quality coking coal and power station coal.

A decision was made to mothball the mine following no viable alternative solution being found to geological reports that indicated that the risks associated with mining a new panel, called T125, had not significantly reduced and that the panel is not viable on health & safety, geological, and financial grounds.

Alkane's financial results stated that: "Both the acquisition of the Maltby CMM assets and the associated fundraising exceeded expectations. The placing was well supported by existing and new institutional investors and the acquired assets are performing ahead of plan.

"The acquisition of the 11MW CMM facility at Maltby Colliery was completed at the end of May 2013 and has moved into production earlier than plan. We are encouraged by early performance at Maltby and would expect output to be maximised following the full colliery closure which is expected during the summer of 2014."

Maltby's owners and operators, Hargreaves received an initial payment of £5.5m followed by up to a further £2m payable six months after the mine shafts have been filled and capped as part of the planned closure and restoration programme.

Neil O'Brien, CEO of Alkane Energy, said: "I am delighted to report another strong set of results for the Group with a significant increase in installed capacity as well as a 109% increase in revenue and a 54% increase in EBITDA.

"With the very real prospect of a shortfall in energy supply in the UK we will continue with our strategy of growing output and installed capacity. Furthermore our successful acquisition of the Maltby Colliery CMM assets and the £6m fundraising leave us well placed to support the Group's investment plans in its core gas to power activities."

Local residents have expressed concern that the operation could expand into the extraction of shale gas from the area using the controversial method of "fracking."

Alkane Energy website

Images: Alkane Energy

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