Coal, gas and power group Alkane Energy (LON:ALK) is evaluating the shale gas options in its portfolio following the recent upsurge in interest in the UK.
The Department of Energy and Climate Change approved fracking in the exploration of shale gas in December.
Alkane has more than 800 square kilometres of acreage under licence in the Midlands, the North of England and Wales. Most are 100% owned and include coal mine methane, natural gas, coal bed methane and shale gas prospects.
The group added that its electricity output rose by 19% during 2012, with the group producing 167Gwh (gigawatts per hour), up from 140Gwh.
Most of the increase occurred in the second half of the year following the acquisition of Greenpark Energy in April.
Electricity prices also stabilised with an expected average price of circa £52/MWh (megawatts per hour) in 2012 (2011:£51/MWh).
At the end of the year, approximately 68% of expected 2013 output had been contracted at an average price of £54/MWh.
In December 2012, Alkane was granted planning permission to extract natural gas at Nooks Farm, Staffordshire. Preparation for drilling has commenced and the drill programme is expected to be completed in spring 2013.
The Nooks Farm site has estimated contingent resources of 1.5bcf (billion cubic feet) of gas, which is expected to provide 2MW electricity output for up to 15 years.
Alkane also has orders for £4mln worth of new biogas plants and has contracted 21MW of its Power Response capacity to the National Grid up to March 2014.
Neil O'Brien, Alkane’s chief executive, said: "We have continued to see strong growth in our core coal mine methane business and we are encouraged by our progress in related markets such as power response and biogas.“
“The prospect of a shortfall in energy supply in the UK, as highlighted by Ofgem and the National Grid, reinforces our confidence about the continuing opportunities to the group for further growth.
Overall, Alkane added it expects results for 2012 will be in line with market expectations.
Shares rose 0.5p to 27.25p.