Scirocco Energy PLC (AIM:SCIR), which invests in European sustainable energy opportunities, revealed that revenues from its anaerobic digestion asset Greenan Generation Ltd (GGL) were up 34% to £325,000 in the first quarter of 2022, supported by higher power prices.
GGL, in which Scirocco has a 50% interest through its 50% joint venture Energy Acquisitions Group Ltd (EAG), operates anaerobic digestion facilities in the UK that generate electricity from waste. It is EAG's its first cash generative asset, Scirocco said in an investment update.
GGL had earnings before income, tax, depreciation and amortisation (EBITDA) of £158,000 in the first quarter, and at current high power prices, EBITDA in the first year under EAG ownership is set to exceed £600,000.
In the first quarter, EAG completed the replacement and recommissioning of several elements of equipment at GGL's Greenan site for £230,000 funded from operational cash flow. The plant is expected to operate at over 95% efficiency for the foreseeable future, with no further downtime, Scirocco said.
It also said EAG is carrying out due diligence on three additional anaerobic digestion (AD) plants.
"I am delighted with the progress made by the EAG team on all fronts during the first quarter with strong operational performance on EAG's current asset and the development of a very attractive list of follow-on investments,” Tom Reynolds, Scirocco chief executive, commented.
In Tanzania, meanwhile, operational activities under the Ruvuma PSA, where Scirocco owns a 25% working interest, have progressed under the operator ARA Petroleum Tanzania (APT).
APT has further advanced the well planning for the Chikumbi-1 well with all long lead items contracts executed, while a target spud date for the well has been set for November 2022.
"Ruvuma Operator APT continues to move the work programme forward to better characterise and enhance understanding of the potential resource, and we remain excited about the schedule of work on our Tanzanian assets as we approach key operational milestones,” Reynolds added.
The operator (Aminex) of the Kiliwani North Development Licence in Tanzania, in which Scirocco holds an 8.39% working interest, noted any future drilling is dependent upon an improved seismic resolution of the prospective target structure.
Reynolds reiterated that Scirocco is holding talks and and exploring options with interested parties for possible divestment and/or farm-down of its interest in both of its assets, "while maintaining our funding options in the event we retain our 25% interest in Ruvuma at the time of drilling CH-1".
"The priority of management remains to progress the ongoing, material discussions on the sale of the company's interest in Ruvuma, to remove the funding requirement and to achieve our stated strategy to pivot to sustainable energy and circular economy markets, where EAG represents a robust, scalable platform primed for growth in an exciting sector," he said.
"We look forward to providing further updates to the market in due course."