Alkane Makes Acquisition, Raises Capital

Coal mine methane (CMM) gas to power producer Alkane Energy plc has acquired the issued share capital of Seven Star Natural Gas Ltd.

Seven Star is a wholly owned subsidiary of UK Methane Limited, which is a wholly owned subsidiary of UK Onshore Gas Limited and holds interests in two gas exploration licenses that cover previously identified onshore gas sites.

Seven Star has a 100% operator participating interest in license PL213 and a 50% participating interest in license PEDL141. Egdon Resources is the designated operator and holds a 46% interest. Altwood Petroleum holds the remaining 4% interest in PEDL141. Each of the PL213 and PEDL141 licenses, grants the exclusive right to search, bore for and extract hydrocarbons from the licensed area.

The transaction is pending approval from the DECC in respect to change of control of Seven Star.

Alkane also announced a placing with certain institutional investors to raise, in aggregate, approximately GBP1.12 million (gross).

Neil O'Brien, CEO, commented on the acquisition and placing:

"We are delighted to have completed this transaction which is consistent with our stated strategy to broaden our gas to power activities. The Licenses will be added to our project pipeline and provide us with a mid-case contingent resource of 3.5 bcf for the two Licenses. We believe this opportunity will give us a sound platform from which to develop in the future."

Alkane currently has an installed capacity of 38MW, operating from 12 mid size (up to 10MW) power plants across the UK. Of these, 11 operate on CMM and one wholly on conventional gas. Alkane then sells the gas extracted from the mines or sells electricity through the electrical grid network, using standard modular reciprocating engines to generate the electricity.

Source: Alkane Energy plc