Alkane Energy (AIM:ALK), the gas to power energy company, which captures coal mine methane, and uses it as a fuel for electricity generation and industrial heating, announced today a signing of a twelve months tolling contract with GDF Suez UK.
Under the tolling contract, Alkane will ‘rent’ seven megawatts (MW) of capacity to GDF Suez in return for a standard fee, which is expected to generate revenues for Alkane of approximately £300,000.
An additional 12 month agreement with GDF, also announced today, will see Alkane outputting an extra 2MW from its Coal Mine Methane reserves at Shirebrook.
In September, Alkane reported a 9% increase in revenues for the first half of 2009 (period ended 30 June 2009) of £2.85 million (H1 2008: £2.6 million) and reported a cash balance of £3.5 million and £2.6 million of debt, of which £0.65 million was current. Cash from operating activities in H1 2009 was flat on the previous period at £2.2 million.
At the end of March 2009 the largest shareholder in the company was Gartmore Investment with a 27% stake.
"We are very pleased to be working with GDF SUEZ and look forward to developing a long term relationship,” stated Neil O'Brien, Chief Executive of Alkane Energy. “We remain committed to further enhancing the potential of our assets and will continue to evaluate other opportunities to further improve the quality of our earnings."