Alkane forecasts strong second half after electricity output falls

Suzie Neuwirth
ALKANE Energy yesterday posted a decline in electricity output for the first half of the year, but said it was looking forward to a strong second half of 2014.

The Aim-listed energy company, which recently sold its onshore shale gas assets to Egdon Resources in return for shares, said its electricity output had fallen to around 85 gigawatt hours (GWh) compared to 94 GWh in the first half of the previous year, as the Maltby plant was offline for the majority of the spring period.

“However, we have now returned to production at Maltby and the group as a whole has generated record weekly baseload output in recent weeks,” it said.

Alkane reported a one-off pre-tax profit of £9m as a result of the deal with Egdon, which will give the firm an 18 per cent stake in the UK’s third largest shale operator.

The company also said it expects its generation sites to benefit from new balancing measures implemented by the government and the regulator Ofgem to address the tightening supply of electricity to the UK.

These include paying mothballed gas power plants to be ready to come back online if needed.

“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,” said chief executive Neil O’Brien.

Shares closed up 1.19 per cent at 42.5p yesterday.